September 18, 2018
By Bob Coleman
Editor, SBA Hot Topic Tuesday
SBA Hot Topic Tuesday — SBA Eliminates Standardized $2,500 SBA 7(a) and 504 Loan Packaging Fees
The significant change to new form 159, “Fee Disclosure and Compensation Agreement,” is SBA no longer will allow the lender to charge a flat fee for all SBA loan packages. This eliminates the common industry practice of charging a flat $2,500 packaging fee.
Currently, SBA does not require documentation for loan packaging fees less than $2,500.
New rule. SBA has added the requirement, “SBA, in its discretion,may request an itemization and supporting documentation for any fee charged in connection with an SBA loan application, regardless of the amount.”
Coleman’s best practice takeaway? Beginning November 1, 2018 lenders should document all SBA 7(a) and 504 loan packaging hours at an assigned hourly rate, regardless of the amount of the fee. (Note lenders may still opt not to disclose itemization for fees less than $2,500, but it needs to be in the file.)
To aid in establishing industry benchmarks, take the poll. We’ll publish results next week.
What do you believe is a reasonable hourly rate to charge the borrower for your in-house SBA 7(a) and 504 loan packager? (Include overhead)
How many hours should it take to package a…
$1 million loan
Over $3 million loan