For those applicants that meet the SBA’s credit and eligibility standards, the Agency can guaranty up to 85 percent of loans of $150,000 and less, and up to 75 percent of loans above $150,000 (generally up to a maximum guaranty amount of $1,000,000). This standard applies to most variations of the 7(a) Loan Program. However, SBAExpress loans carry a maximum guaranty of 50 percent guaranty. The Export Working Capital Loan Program carries a maximum of 90 percent guaranty.
Fees Associated With Sba Loans
To offset the costs of the SBA’s loan programs to the taxpayer, the Agency charges lenders a guaranty and a servicing fee for each loan approved. These fees can be passed on to the borrower once they have been paid by the lender. The amount of the fees are determined by the amount of the loan guaranty.
Effective October 1, 2002, when the loan amount is $150,000 or less, the guaranty fee will be 1 percent of the guaranteed portion. Lenders are permitted to retain 25 percent of this fee (25 basis points). This is only applicable to loans of $150,000 or less. For loans more than $150,000 but up to and including $700,000, a 2.5 percent guaranty fee will be charged. For loans greater than $700,000, a 3.5 percent guaranty fee will be charged. This is a temporary reduction that is in effect for a two year period for all loans approved on or after October 1, 2002.
The annual on-going servicing fee for all 7(a) loans approved during the 2-year period beginning October 1, 2002, shall be 0.25 percent of the outstanding balance of the guaranteed portion of the loan. The legislation provides for this fee to remain in effect for the term of the loan.
Processing fees, origination fees, application fees, points, brokerage fees, bonus points, and other fees that could be charged to an SBA loan applicant are prohibited. The only time a commitment fee may be charged is for a loan made under the Export Working Capital Loan Program.
Effective for all loans where the applications were received by the lender on or after December 22, 2000, a new pre-payment charge paid by the borrower to SBA ("subsidy recoupment fee") has been added for those loans that meet the following criteria:
- have a maturity of 15 years or more where the borrower is prepaying voluntarily;
- the pre-payment amount exceeds 25 percent of the outstanding balance of the loan; AND
- the pre-payment is made within the first 3 years after the date of the first disbursement (not approval) of the loan proceeds.