SBA rules · SOP 50 10 8.1
What fees can a lender charge on an SBA loan?
SBA rules prohibit any fee not expressly authorized, strictly barring lenders from charging origination fees, points, broker fees, and lender prepayment or renewal fees, while permitting itemized packaging, out-of-pocket closing, extraordinary servicing, late, and assumption fees.
Quoted from SBA SOP 50 10 8.1Every quote checked word for word
In detail
- 7(a) allowable fees: Lenders may pass through the upfront guaranty fee and collect reasonable packaging fees (a flat fee up to $2,500 without documentation, or documented fees not exceeding 5% for loans of $150,000 or less, 3% for loans over $150,000, and capped at $30,000), direct out-of-pocket closing expenses including hourly legal fees, extraordinary servicing fees up to 2% per year with SBA approval, late fees up to 5% for payments more than 10 days delinquent, and assumption fees up to 1%.
- 7(a) prohibited fees: Lenders and their associates cannot charge origination, commitment, bonus, broker, commission, referral, renewal, or lender prepayment fees, nor can they charge points, add-on interest, pass through Lender Service Provider costs, or pass on the ongoing Lender's Annual Service Fee.
- 504 allowable fees: CDCs may charge a borrower deposit (up to $2,500 or 1% of net debenture proceeds, whichever is less), a processing fee up to 1.5% of net debenture proceeds, a closing fee up to $10,000, a monthly servicing fee between 0.625% and 2% per year, late fees of 5% or $100 (whichever is greater) after the 15th, an assumption fee up to 1%, and pass through eligible underwriter, CSA, and SBA fees.
- 504 prohibited fees: CDCs are prohibited from passing on fees associated with technology services, fees paid to professional services contractors, or referral fees for locating third-party financing to the borrower.
- Prepayment and recoupment fees: While lenders are prohibited from charging their own prepayment fees, 7(a) borrowers face an SBA subsidy recoupment fee for voluntary prepayments exceeding 25% within the first 3 years on loans with maturities of 15 years or longer, and 504 borrowers must pay statutory repurchase premiums on early debenture payoff.
The source
What the SOP says
“Any fee not expressly permitted in 13 CFR § 120.221 is prohibited.
“Charge the Borrower any commitment, bonus, origination, broker, commission, referral, or similar fees;
“Charge points or add-on interest;
“SBA permits the Lender to charge the Applicant a flat fee of up to $2,500 per loan without documenting the service performed.
“the maximum fee that may be charged to an Applicant on a percentage basis is $30,000.
“Such a fee may not exceed 2% per year on the outstanding balance of the part of the loan requiring special servicing, unless otherwise specified in Section B, 7(a) Loan Program Specific Requirements.
“In accordance with 13 CFR § 120.221(e), charges for legal services must be charged on an hourly basis.
“Lenders may charge the Borrower a late payment fee not to exceed 5% of the regular loan payment when the Borrower is more than 10 days delinquent on its regularly scheduled payment.
“This fee cannot be charged to the Borrower.
“At the time of application, the CDC may require a deposit from the Borrower of $2,500 or 1% of the Net Debenture Proceeds, whichever is less.
“Fees associated with technology services (whether developed internally or purchased from a third party) may not be passed on to the Borrower.
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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.