SBA SOP 50 10 8, A.Ch4.C.1 — Fees the Lender Pays SBA
Verbatim text of SBA SOP 50 10 8 section A.Ch4.C.1 (Fees the Lender Pays SBA), effective 2025-06-01. 4 provision(s) quoted from the SOP PDF. SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.
Verbatim regulatory text
Verbatim provisions from SBA SOP 50 10 8, A.Ch4.C.1 — Fees the Lender Pays SBA — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
SOP 50 10 8 A.Ch4.C.1
1. Fees the Lender Pays SBA SBA Guaranty Fee (also known as Upfront Fee) and the 7(a) Lender’s Annual Service Fee (also known as the SBA On-Going Guaranty Fee). (13 CFR § 120.220) The 7(a) Lender is responsible for payment to SBA of the Upfront Fee and the Lender’s Annual Service Fee in order to obtain and maintain the SBA guaranty. SBA Guaranty Fee (Upfront Fee). The Upfront Fee is the fee a 7(a) Lender must pay to SBA for each loan guaranteed under the 7(a) program. The 7(a) Lender is permitted to pass the cost of the Upfront Fee to the Borrower. The Agency automatically calculates the Upfront Fee for each individual loan. This calculation is modified in SBA’s loan accounting system and E-Tran to include changes to the fee that are necessary due to other loans approved within the past 90 days. Short-term loans are not included in this calculation. For more information, see below or contact the processing center or Lead District Office. The Borrower may use loan proceeds to pay the Upfront Fee; however, the first disbursement may not be made primarily for the purpose of paying the Upfront Fee. If the Borrower plans to use loan proceeds to pay the Upfront Fee, the E-Tran Terms and Conditions must include a Use of Proceeds category for this purpose. Note: When an escrow closing is used, the 7(a) Lender may charge the Borrower the Upfront Fee only when all loan funds have been disbursed to the Borrower from the escrow account.
SOP 50 10 8 A.Ch4.C.1.i
i. Calculation of the Upfront Fee. The total loan amount determines the percentage that is used to calculate this fee. However, the Upfront Fee is based on the guaranteed portion of the loan and not the total loan amount. The chart below describes the applicable fees. MAXIMUM UPFRONT FEE CHART (See Note 1) Gross Loan Size Maximum Fees (See Note 1) Loans of $150,000 or less (Maturity more than 12 months) (See Note 2) 2% of guaranteed portion 7(a) Lender is authorized to retain 25% of the fee. $150,001 to $700,000 (Maturity more than 12 months) 3% of guaranteed portion $700,001 to $5,000,000 (Maturity more than 12 months) (See Note 3) 3.5% of guaranteed portion up to $1,000,000 PLUS 3.75% of the guaranteed portion over $1,000,000 Short-Term Loans – up to $5 million (Maturity of 12 months or less) 0.25% of the guaranteed portion Note 1: The above table describes the maximum Upfront Fees as authorized by 13 CFR § 120.220. However, SBA may announce temporary changes for a specific fiscal year through an Information Notice. Note 2: For example, the Upfront Fee on a $100,000 loan with an 85% guaranty would be 2% of $85,000 or $1,700, of which the 7(a) Lender may retain $425. Note 3: For example, the Upfront Fee on a $5,000,000 loan with a 75% guaranty ($3.75 million guaranteed portion) would be 3.5% of $1,000,000 ($35,000) PLUS 3.75% of $2,750,000 ($103,125), which totals $138,125. For SBA Express only : The Upfront Fee is waived for loans to businesses owned and controlled by a veteran (other than a veteran who received a Dishonorable or Bad Conduct Discharge), Service-Disabled Veterans; Active Duty military service member participating in the military’s Transition Assistance Program (TAP); or spouse of a Veteran, Active Duty service member, or widowed spouse of a service member who died while in service or of a service-connected disability. ii. Upfront Fee Calculation for Multiple 7(a) Loans Within 90 Days. a) If more than one 7(a) loan (with maturities exceeding 12 months) is approved for an Applicant, including loans approved to its affiliates, within 90 days of each other, the loans are considered as one loan for the purpose of determining the percentage of guaranty and the Upfront Fee calculation. This rule applies regardless of whether the loans were approved by the same or different 7(a) Lenders. b) When two or more 7(a) loans are approved within 90 calendar days of each other, the applicable fee for the subsequent loans is equal to the Upfront Fee that would have been charged had all the loans been combined into one loan. The applicable fee for the subsequent loan(s) will equal the amount of the fee that would have been charged had the loans been combined, less the amount of the fee from the first loan approved. c) When the Applicant receives both a short and long term 7(a) loan, the percentage of guaranty is calculated as if the loans are combined, but the Upfront Fee is based solely on the maturity of each loan. d) If a short-term 7(a) loan that was made within 90 days of a long term 7(a) loan is renewed and the maturity is extended beyond 12 months, the Upfront Fee calculated at the time of renewal would equal the fee that would have been charged if both 7(a) loans were originally long term. The amount owed SBA at the time of renewal would equal the recalculated Upfront Fee less the amount paid at the time of original approval. e) This rule also applies to any subsequent increases to either of the 7(a) loans made within the 90 day period, even if one of the loans subsequently is paid in full. iii. When the Upfront Fee Must be Paid (13 CFR § 120.220(b)): The 7(a) Lender must pay the Upfront Fee to SBA as follows: a) Short-term loans (maturities of 12 months or less): i) The 7(a) Lender must pay the Upfront Fee through www.pay.gov within 10 business days from the date the SBA Loan Number is assigned. If the fee is not received within 10 business days after issuance of the SBA Loan Number, SBA will cancel the guaranty. ii) For EWCP loans re-issued after 12 months, each time the loan is re- issued it is a new loan, and another Upfront Fee is due. SBA earns the short-term Upfront Fee when the SBA loan number is issued. iii) The 7(a) Lender may only charge the Upfront Fee to the Borrower after the 7(a) Lender has paid the Upfront Fee. b) Loans with maturities in excess of 12 months: i) The 7(a) Lender must pay the Upfront Fee to SBA within 90 days of the date of loan approval. If the Upfront Fee is not paid within 90 days, the guaranty will be cancelled. The 7(a) Lender may charge the Upfront Fee to the Borrower after initial disbursement; however, the first disbursement may not be made solely or primarily for the purpose of paying the Upfront Fee. ii) Notification of Fee Due: When SBA issues an SBA loan number, this is the Lender’s notification that an Upfront Fee is due and payable within 90 days. SBA may, but is not required to, inform the 7(a) Lender when the Upfront Fee has not been received by SBA within the required time frame. Neither the issuance by SBA of any notice of non-payment nor the receipt of any notice of non-payment by the 7(a) Lender waives the 7(a) Lender’s obligation to pay the fee within 90 days of approval. In addition, the obligation to pay the Upfront Fee to SBA is not contingent upon the Borrower having paid the fee to the 7(a) Lender. c) THE DUE DATE FOR UPFRONT FEE PAYMENT MAY NOT BE WAIVED OR EXTENDED EVEN IF THE DISBURSEMENT PERIOD IS EXTENDED.
SOP 50 10 8 A.Ch4.C.1.i.iv
iv. Additional Upfront Fee for Loan Increases. a) When a 7(a) loan is increased, additional appropriations are committed, and an additional Upfront Fee is due. The additional fee is based on the rules in effect at the time the loan was originally approved. Therefore, the amount of the additional Upfront Fee due for an increase will equal what the Upfront Fee would have been if the increase was part of the original loan amount, less the amount of the Upfront Fee (if already remitted). b) The additional Upfront Fee associated with the increase must be paid electronically within 30 days from the date the increase was approved, or the total loan guaranty will be cancelled. c) On loans that have been initially disbursed, the Upfront Fee associated with any increase approved by SBA must be paid to SBA, whether or not the increase is subsequently cancelled. v. Additional Upfront Fee for Extensions of Short-Term Loans. a) When the maturity of a short-term 7(a) loan is extended beyond 12 months, an additional Upfront Fee is due. The 7(a) Lender may contact the appropriate SBA CLSC for assistance. The additional fee must be paid electronically within 30 days from the date the 7(a) Lender agrees to the extension, or the total loan guaranty will be cancelled. The 7(a) Lender may charge the additional fee to the Borrower after the 7(a) Lender has notified SBA that the maturity has been extended and has paid the additional Upfront Fee. b) No additional Upfront Fees will be owed for loans extended beyond their original maturity date when SBA determines the extension is to effect collection and no new funds are disbursed, regardless of the original maturity.
SOP 50 10 8 A.Ch4.C.1.i.vi
vi. Method of Upfront Fee Payment. The 7(a) Lender must electronically pay the Upfront Fee either by using their existing SBA-approved bulk ACH method or through www.pay.gov. When using www.pay.gov, select “form type 1544” and select “guaranty.” The loan must have been approved and an SBA Loan Number issued in order to use www.pay.gov. Any questions regarding this requirement can be emailed to [email protected]. vii. Reinstatement of Guaranty After Cancellation. If SBA cancelled its guaranty because the 7(a) Lender did not pay the Upfront Fee, the 7(a) Lender may request that SBA consider reinstating its guaranty. The 7(a) Lender must submit a written request to either the LGPC or the appropriate SBA CLSC in accordance with Section B, Ch 5, “E-Tran Terms and Conditions through Disbursement for all 7(a)Loans”. If SBA reinstates the guaranty, the required Upfront Fee must be electronically paid within 30 days from the date of reinstatement, or the guaranty will be cancelled. The request must include the following: a) SBA Loan Number and the SBA Loan Name; b) A certification that there has been no unremedied adverse change in the financial condition, organization, operations, or fixed assets of the Borrower or Operating Company since the date of application for guaranty; c) If the loan has been disbursed in whole or in part, a certification that the loan is current, the 7(a) Lender has been reporting the loan on all SBA Form 1502 monthly reports since the loan was disbursed, and the 7(a) Lender has been paying the Lender’s Annual Service Fee in a timely manner on this loan; and d) A complete written explanation as to why the 7(a) Lender failed to pay the Upfront Fee and what the 7(a) Lender has done to correct any deficiencies in its procedures. viii. Upfront Fee Refunds (13 CFR §120.220(c)). The Upfront Fee is based on the amount that SBA has approved prior to the loan being closed and initially disbursed. Any request by the 7(a) Lender to decrease the approved amount must be approved by SBA prior to the date the loan is closed and initially disbursed by the 7(a) Lender in order for the Upfront Fee to be reduced. The 7(a) Lender must submit a request to the appropriate SBA CLSC via E-Tran for an adjustment to the approved amount of the loan and Upfront Fee. Refer questions on guaranty fees to the appropriate SBA CLSC. a) Full refund: The Upfront Fee may be refunded only for a loan with a maturity of more than 12 months and when the loan has not been closed and initially disbursed and the 7(a) Lender submits a request to SBA via E-Tran to cancel the guaranty. Once a loan has been initially disbursed, no refund is permitted. For loans with a maturity of 12 months or less, once the SBA loan number has been issued, no refund will be given. b) Partial refund: If SBA approves the cancellation of a portion of the loan prior to the loan being closed and initially disbursed, SBA will adjust the Upfront Fee payable to reflect the new loan amount and refund the excess amount if the fee has already been paid. If the loan has been closed and initially disbursed, no refund is permitted. 7(a) Lender’s Annual Service Fee (Lender’s Annual Service Fee) (13 CFR § 120.220(f)). The 7(a) Lender must pay SBA a Lender’s Annual Service Fee. The fee is based on the outstanding principal balance of the guaranteed portion of the loan at the time of SBA Loan approval. SBA specifies the amount of the fee each fiscal year for all loans approved during that year through an Information Notice. This fee cannot be charged to the Borrower. When multiple 7(a) loans are made within 90 days of each other, the Lender’s Annual Service Fee is set for each loan on a standalone basis without respect to any other loans made (i.e., the loans are not aggregated). The 7(a) Lender pays this fee on a monthly basis with submission of SBA Form 1502, “Guaranty Loan Status and Remittance Form.” SBA may charge the 7(a) Lender a late fee if the on-going guaranty fee is not paid timely. For EWCP payment options, see Section B, Ch. 4, Para. B.5.e., Payment Options for EWCP Ongoing Guaranty Fee. Note: The fee will be listed in the E-Tran Terms and Conditions, and it is the 7(a) Lender's responsibility to ensure that the E-Tran Terms and Conditions includes the correct fee.
Operationalizing SBA SOP 50 10 8, A.Ch4.C.1 — Fees the Lender Pays SBA
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