SBA SOP 50 10 8, C.Ch3.B — STEPS TO CALCULATE THE GROSS DEBENTURE
Verbatim text of SBA SOP 50 10 8 section C.Ch3.B (STEPS TO CALCULATE THE GROSS DEBENTURE), effective 2025-06-01. 1 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 SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.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, C.Ch3.B — STEPS TO CALCULATE THE GROSS DEBENTURE — 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 C.Ch3.B
B. STEPS TO CALCULATE THE GROSS DEBENTURE Use the following step by step pricing model procedures to determine the administrative costs and the Gross Debenture amount. Except for the underwriting fee and closing costs, each administrative cost is based on the amount of the Net Debenture. For more information, see Ch. 1, Para. C.12 of this Section, Eligible Administrative Costs. Also see Section A, Ch. 4, Para. E., 504 Loan Program Fees and Use of Agents. Net Debenture Determine the Net Debenture: $350,000 SBA Guaranty Fee (.5%) multiply $350,000 by 0.005 = $1,750 Funding Fee (.25%) multiply $350,000 by .0025 = $875 CDC Processing Fee (1.5%) multiply $350,000 by .015 = $5,250 Eligible Closing Costs* = $2,500 Gross Debenture Amount To calculate the Gross Debenture, add items 1 through 5 above and divide the total by 0.996 for 20 or 25-year debentures (for 10-year debentures, this number would be 0.99625). This step adds the Underwriter’s Fee to the total debenture. Round this number up to the next even thousand. Net Debenture Proceeds $350,000 SBA Guaranty Fee $1,750 Funding Fee $875 Section C, Ch 3 Debenture Pricing and Funding CDC Processing Fee $5,250 Closing Costs $2,500 Total $360,375 Divide by 0.99600 (0.99625 for 10-Year Debenture) $360,065 Round up to the next even thousand $362,000 The Gross Debenture in this example is $ 362,000. Note: The Gross Debenture is calculated first because the Underwriter’s Fee is based on the Gross Debenture, not the Net Debenture. Underwriter’s Fee To determine the exact amount of the underwriter’s fee, multiply the 20 or 25-year Gross Debenture by .004 (for 10-year debentures, this number would be .00375). Multiply $362,000 by .004 = $1,448 Balance to Borrower. The difference between the Gross Debenture amount ($362,000.00) and the sum of Net Debenture proceeds ($350,000.00), processing and closing fees ($8,625.00), and Underwriter’s fee ($1,448.00) goes to the Borrower. In this example, the Balance to Borrower is: $362,000 – ($350,000 + $10,375 + $1,448) = $931.
Operationalizing SBA SOP 50 10 8, C.Ch3.B — STEPS TO CALCULATE THE GROSS DEBENTURE
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