This Just In – 7(a) Fees Effective for Fiscal Year 2024 (Starting October 1)

August 31, 2023

Delaney Sexton
Contributing Editor

This Just In – 7(a) Fees Effective for Fiscal Year 2024 (Starting October 1)

7(a) Lender’s Annual Service Fee

The FY 2024 Annual Service Fees will be based on the gross loan approval amount including the SBA-guaranteed and unguaranteed portions. The fees will be the following:

For loans of $1,000,000 and less: 0.00%
For loans of $1,000,001 to $5,000,000: 0.55% of the guaranteed portion of the outstanding balance of the loan

Lenders are not allowed to pass the Annual Service Fee onto the borrower.

SBA Guaranty Fee (Upfront Fee)

Not including the Export Working Capital Program loans and SBA Express loans made to veteran-owned businesses, the FY24 Upfront Fee based on gross loan approval amount (guaranteed and unguaranteed portions) will be:

For loans with a maturity that exceeds 12 months, the Upfront Fees are:

For loans of $1,000,000 or less: 0.00%
For loans of $1,000,001 to $2,000,000: 1.45% of the guaranteed portion of the loan up to and including $1,000,000, plus 1.7% of the guaranteed portion of the loan over $1,000,000.
For loans of $2,000,000 and greater: 3.5% of the guaranteed portion of the loan up to and including $1,000,000, plus 3.75% of the guaranteed portion of the loan over $1,000,000.

For 7(a) loans with a maturity of 12 months or less (Short-term loans):

For loans of $1,000,000 or less: 0.00%
For loans of $1,000,001 and greater: 0.25% of the guaranteed portion

Multiple 7(a) loans made within 90 days of each other:

When two or more 7(a) loans with maturities exceeding 12 months are approved for an applicant (including its affiliates) within 90 days of each other, the loans are considered as one loan for the sake of determining the guaranty and the Upfront Fee calculation. This rule applies whether the loans were made by one lender or different lenders.

Annual Service Fee for multiple 7(a) loans within 90 days: This is set for each loan on a standalone basis and do not have to be combined when determining the fee.

Upfront Fee calculation for multiple 7(a) loans within 90 days: The Upfront Fee will equal the amount of the fee charged if the loans had been combined, less the fee paid or is due to be paid on the first loan approved.

Additional Upfront Fee for Extensions of Short-Term 7(a) Loans

When the maturity of a short-term 7(a) loan greater than $1 million is extended beyond a year, an additional Upfront Fee is due. When an EWCP loan greater than $1 million with an original maturity of two years is extended beyond the original maturity date and up to 36 months, an additional Upfront Fee is due. The fee must be paid to the SBA within 30 days of the lender agreeing to the extension or the total guaranty will be canceled.

Upfront Fee for SBA Express Loans Made to Veteran-owned Small Businesses:

For all SBA Express loans made to businesses owned and controlled by a veteran or spouse of a veteran, the Upfront Fee with be $0.

Upfront Fee for EWCP Loans:

For loans of $1,000,000 or less (regardless of maturity): 0.00%
For loans greater than $1,000,000 (maturity 12 months or less): 0.25% of guaranteed portion
For loan greater than $1,000,000 (maturity 13 up to 24 months): 0.535% of guaranteed portion
For loans greater than $1,000,000 (maturity 25 up to 36 months): 0.80% of guaranteed portion

EWCP loans greater than $1,000,000 with an original maturity of up to 24 months and are extended beyond the original maturity will require an additional fee owed to the SBA. Lenders must pay the difference from the original fee.

Additional Upfront Fee for 7(a) Loan Increases

The additional fee charged for increased amounts is based on the rules in effect at the time the loans were originally approved. The additional Upfront Fee will be based on if the increase was part of the original loan amount minus the amount of the original fee. This fee must be paid within 30 days of the date the increase was approved or the total guaranty will be canceled.

Adjustments to the Annual Service Fee Due to Loan Increases:

The Annual Service Fee will be calculated based on the guaranteed portion of the outstanding balance of the loan. When the loan is increased, the Annual Service Fee will be recalculated based on the revised loan amount.

Source:
SBA Information Notice