You know by now that SBA has published the FY 2024 7(a) Fee Schedule in SBA Information Notice 5000-848801. As a refresher, loan fees are recalculated at the end of each fiscal year and applied to loans approved the following fiscal year. So the new fees apply to loans authorized Oct. 1, 2023 thru Sept 30, 2024.

Annual fees are calculated based on a “zero subsidy,” meaning that users of the loan programs (participating financial institutions and borrowers) pay user fees to cover loan losses. The federal budget covers administrative costs of the 7(a) program, such as staff and overhead, but no tax money is to be used to cover loan losses. FY 2024 7(a) Fees in brief:

FY 2024 7(a) Lender’s Annual Service Fee
For loans of $1 million and less: 0.00%.
For loans of $1.1 million to $5 million: 0.55% of the guaranteed portion of the
outstanding balance of the loan.

Note: Something different this time around. Annual Service Fees are usually based on the amount of the SBA guaranty. But for FY 2024, the Annual Service Fees are based on the gross loan approval amount for both the SBA-guaranteed and unguaranteed portions. I’m sure there’s an excellent reason for that difference, but the only one I’ve come up with is that the math just comes out that way. And a not-so-gentle reminder: Lenders aren’t allowed to pass the Annual Service Fee onto the borrower.

FY 2024 SBA Guaranty Fee (Upfront Fee)
The Upfront Fee is based on the gross loan approval amount, including the SBA-guaranteed and unguaranteed portions. Of course there are exceptions for Export Working Capital Program loans and SBA Express loans made to veteran-owned businesses and for 7(a) loans with a maturity of 12 months or less. And the math is more complicated when two or more 7(a) loans with maturities exceeding 12 months are approved for an applicant (including its affiliates) within 90 days of each other, even if the lenders are different.

Additionally, when a 7(a) loan is increased, an additional Upfront Fee is due on that increased amount. The additional fee is based on the rules in effect at the time the loan was originally approved. On loans that have been initially disbursed, the Upfront Fee on any approved increase must be paid, even if the increase is subsequently canceled. Note: This is not a new policy. It’s been around ever since I was a little lender.

I’ve given you a general overview, but I encourage you to read Information Notice 5000-848801 in its entirety, all 3+ pages. Questions? SBA asks that you direct your questions to the Lender Relations Specialist in the local SBA field office.

FY 2024 Fees for 504 loans aren’t published yet. I appreciate that lag. It gives me time to digest one Fee Schedule before moving on to another.

Richard Jeffrey, Senior Associate
Head Underwriter