The Small Business Administration (SBA) has announced an important change to its fee structure for 7(a) loans. Starting March 27, 2025, the SBA will reinstate the Guaranty (Upfront) Fee on 7(a) loan applications. This change will impact small business owners seeking SBA-backed financing and will remain in effect through September 30, 2025.
The SBA funds itself through borrower fees to keep the 7(a) Loan Program at zero cost to taxpayers. The Guaranty Fee was a standard part of SBA loans before 2020, but it was temporarily suspended. Now, the SBA is reinstating the fee to sustain the program and ensure continued access to affordable financing for small businesses. Without these fees, the SBA risks financial losses that could impact the long-term availability of the 7(a) Loan Program.
If you’re applying for an SBA 7(a) loan, you will now be responsible for a Guaranty Fee, which is netted out of your loan proceeds at the time of funding. This is not a good faith deposit or escrow payment, but rather a required fee deducted from your loan amount, calculated based on your loan size:
Here’s a breakdown of the guarantee fee based on common loan amounts:
|
Requested Loan Balance |
Guarantee Fee (% of loan amount) |
Guarantee Fee ($) |
|
$100,000 |
1.7% |
$1,700 |
|
$250,000 |
2.25% |
$5,625 |
|
$500,000 |
2.25% |
$11,250 |
Important Note: The Guaranty Fee can be collected from loan proceeds, meaning borrowers do not need to make an upfront payment or good faith deposit.
For more details on the SBA’s 7(a) Loan Program and fee structure, visit the following resources:
If you have questions about how these changes impact your loan application, please contact your account manager or email support@smartbizbank.com. Our team at SmartBiz is here to help you navigate these updates and secure the funding your business needs.