SBA loan fees: what an SBA loan costs beyond interest

What fees come with an SBA loan?

Beyond interest, an SBA loan’s cost comes from four places:

1. SBA program fees. The upfront guaranty fee on 7(a) loans, or the upfront and annual fees on 504 loans. Fee amounts are set for each federal fiscal year; the figures in this guide are for fiscal year 2027, which runs from October 1, 2026, through September 30, 2027.
2. Lender and CDC fees, such as packaging, closing and servicing fees.
3. Third-party costs, such as appraisals, environmental reviews, title work and legal fees.
4. Prepayment fees, if you pay off certain loans early.

Most of these can be financed, so the main question is usually how much they add to the loan, not how much cash you need on day one.

How much is the SBA guaranty fee on a 7(a) loan?

The guaranty fee is what the SBA charges for guaranteeing part of your loan. It’s a percentage of the guaranteed portion, not the full loan. The SBA guarantees 85% of 7(a) loans of $150,000 or less and 75% of larger loans, up to a maximum guaranteed amount of $3.75 million.

SBA Express loans pay the same fee schedule, but the SBA guarantees only 50% of an Express loan. A smaller guaranteed portion means a smaller fee in dollars than on a standard 7(a) loan of the same size.

Which SBA loans have lower or waived fees?

Some loans pay less, or nothing, upfront:

• Short-term 7(a) loans. Loans with short maturities, as noted under the table, pay just 0.25% of the guaranteed portion.
• Manufacturers, food-supply-chain businesses and rural businesses. For fiscal year 2027, the SBA waives the upfront 7(a) fee on their loans up to the size shown in the table notes, and waives the 504 upfront fee for these businesses too.
• Veteran-owned businesses using SBA Express. For fiscal year 2027, Express loans to veteran-owned businesses have no upfront fee.

Fee schedules and waivers follow the date the loan is approved, not the date you applied, so ask your lender to confirm which schedule applies to your loan.

Who pays the SBA’s annual service fee?

The lender does. Each year, the lender pays the SBA an annual service fee of 0.55% of the guaranteed balance. It’s the lender’s cost rather than a fee you pay directly, though like any cost it’s part of what a lender weighs when it prices your loan.

What fees does an SBA 504 loan have?

A 504 loan has its own fee structure:

• An upfront SBA fee of 0.50% of the debenture, waived for manufacturers, food-supply-chain businesses and rural businesses in fiscal year 2027.
• An annual SBA fee of 0.203% of the outstanding debenture balance, built into your monthly payment. The rate is slightly higher for refinancing without an expansion.
• CDC fees for processing, closing and servicing the loan, plus the costs of selling the debenture to investors.
• Bank fees on the bank’s portion of the project, set by the bank.

Most of the SBA and CDC fees are financed into the debenture rather than paid in cash. Because the annual fees are built into your payments, CDCs often quote an effective rate that includes them. Ask both the CDC and the bank for a written estimate of all fees.

What closing costs should you expect on an SBA loan?

Closing costs depend on what the loan pays for and what secures it. Common ones include:

• Appraisals of real estate and, sometimes, equipment.
• A business valuation for purchases above $350,000, from an independent, credentialed appraiser.
• A Quality of Earnings report for business purchases of $3 million or more.
• Environmental reviews on commercial real estate.
• Title insurance, recording and lien search fees.
• Legal fees, including the lender’s closing attorney in many cases.
• Insurance the lender requires, such as property coverage and, in some cases, life insurance on key owners.
• Lender packaging fees, which lenders may charge within SBA limits.

If you hire a loan broker or packager, get their fee in writing before you sign anything. SBA rules require fees paid to these agents to be disclosed on SBA Form 159.

We don’t list typical dollar amounts because they vary widely by property, deal size and region. Ask every lender for a written estimate of all costs before you choose.

Is there a prepayment penalty on an SBA loan?

Some SBA loans have one. If you pay down a large share of a long-term 7(a) loan early, the SBA charges a prepayment fee:

• Fee: 5%, 3% and 1% of the amount prepaid, stepping down each year.
• When it applies: Prepayment fee in years 1, 2 and 3 on 7(a) loans with terms of 15 years or more, when more than 25% of the balance is prepaid in a year.

Shorter-term 7(a) loans don’t carry this SBA fee, but read your loan note for any other prepayment terms. On a 504 loan, the CDC portion has its own prepayment penalty that declines over the early years of the loan, and the bank may have separate terms. If you might sell or refinance early, ask for each schedule up front.

Can you finance SBA loan fees?

Usually, yes. Most SBA and closing costs can be included in the loan:

• The 7(a) guaranty fee can be financed into the loan amount.
• Most 504 SBA and CDC fees are financed into the debenture.
• Many closing costs are eligible uses of loan proceeds.

Financing keeps cash in your business at closing, which can matter when you’re also making a down payment. The trade-off is that you pay interest on those costs for the life of the loan. Some third-party costs, such as an appraisal, may be due before closing even if they’re later reimbursed from the loan. Use the SBA loan calculator to see how a larger loan amount changes your payment, and compare fees alongside SBA loan rates.

How do you find the right lender for your SBA loan?

The SBA’s fee schedule is the same at every lender, but packaging fees, closing costs and rates are not. Lenders that regularly fund loans like yours tend to know which third-party reports your deal needs, which can mean fewer surprises at closing.

SBA Loan Connect ranks lenders using the SBA’s public 7(a) and 504 loan records, so you can see which lenders actually fund businesses like yours. Partner lenders are labeled, and getting matched is free with no credit check. See how we rank lenders or get matched with lenders.