SBA rules · SOP 50 10 8.1
Who pays the SBA annual service fee?
The 7(a) Lender is responsible for paying the SBA annual service fee (ongoing guaranty fee), and it cannot be charged or passed on to the borrower.
Quoted from SBA SOP 50 10 8.1Every quote checked word for word
In detail
- Payment responsibility: The 7(a) Lender is responsible for paying the Lender's Annual Service Fee to SBA in order to obtain and maintain the SBA guaranty.
- Prohibition on borrower charges: The Lender is strictly prohibited from charging the Annual Service Fee to the Borrower or passing it on to the Borrower in any manner.
- 504 program comparison: In the 504 program, the ongoing annual CDC fee of 0.125% paid to SBA must come out of the servicing fees collected by the CDC and cannot be imposed on the borrower, though the separate 504 ongoing annual fee is an allowable borrower charge.
The source
What the SOP says
“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.
“The 7(a) Lender must pay SBA a Lender’s Annual Service Fee.
“This fee cannot be charged to the Borrower.
“Lenders may not pass the Lender’s Annual Service Fee on to the Borrower.
“The fee must be paid from the servicing fees collected by the CDC and cannot be paid from any additional fees imposed on the Borrowers (loans approved by SBA after 9/30/1996).
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This page quotes the SBA's Standard Operating Procedure 50 10 8.1. Lenders can ask for more than the SBA minimum. It is general information, not a loan approval or legal advice.