Yes, SBA has stepped back to what-used-to-be-business-as usual. Concurrent with SBA’s new fiscal year, SBA Information Notice 5000-818641 announces the 7(a) Loan Fee Schedule effective 10/01/2021 for Fiscal Year 2022: Upfront Guaranty Fees and Annual Service Fees are back in the picture.
After a year of unprecedented challenges, SBA lending is doing business with some degree of normalcy. With FY 2021 CARES Act PPP loans, nearly across-the-board fee waivers and higher guarantees, it was a banner year for SBA lending. Now, we’re challenged with keeping the entrepreneurial spirit going, and encouraging small businesses to continue applying for SBA loans.
To Be Continued … Good News for Many Small Business Owners. Although life is slowly getting back to normal, many of America’s small businesses continue to struggle. In an unusual move, but appropriate for the times, SBA has extended key FY 2021 fee waivers for certain 7(a) loans thru the next fiscal year, September 30, 2022. Clearly, the focus is on smaller loan amounts. For these borrowers, the sun didn’t set on October 1, 2021:
“V” For Veterans! SBA loans are proven valuable resources for veterans. And the majority of veteran borrowers are reliable business owners. Additionally, SBA recognizes the specific challenges facing America’s veterans with an extension of the FY 2021 Upfront Guaranty Fee waiver: For all 7(a) Express Loans to veteran-owned small businesses in FY 2022, the Upfront Guaranty Fee will remain at zero. *
Loans of $350,00 or Less. Brighter Days Ahead. The $350,000 loan is the traditional threshold defining the smallest 7(a) loans. These borrowers still need a big boost. SBA has given them two: For all loans of $350,000 or less, Guaranty Fees AND Ongoing Service Fees (aka 1502 Fees) are ZERO!!!!
Express Loans. A Leg Up. In a rare move, the Express Loan amount during the ’21 COVID crisis was temporarily raised from $350,000 to $1 million. Significantly, now the maximum Express Loan amount has been permanently raised to $500,000. The SBA Express Loan guaranty limit has returned to 50%.
Yes, it’s “Back to the Future.” For all other 7(a) loans, the FY 2022 Fee Schedule follows the usual tiered pattern for Upfront Guaranty Fees and Annual Service Fees. I encourage you to read Informational Notice 5000-818641 in its entirety. Share it with your lending team and keep it handy. See SOP 50 10 6, Part 2, Chapter 5, Paragraph C. for guidance on when all 7(a) loan fees are due. Questions? SBA asks you to address questions about the new Fee Schedule to the lender relations specialist at your local SBA Field Office.
And of course, for all things concerning your SBA program, Contact JRB!
*… in accordance with section 7(a)(31)(G) of the Small Business Act (15 U.S.C. § 636(a)(31)(G).