SBA Information Notice 5000-20048
Summary
SBA Information Notice, control no. 5000-20048, effective September 22, 2020, addressed to SBA employees and Lenders, announcing 7(a) fees for loans approved October 1, 2020 through September 30, 2021 (FY2021) and the fee exceptions authorized for that year. It sets the annual service fee at 0.55% (55 basis points) of the guaranteed portion of the outstanding balance, which lenders must manually adjust in the Authorization Wizard. It explains that the upfront guaranty fee continues to depend on loan amount and maturity, except for Export Working Capital Program (EWCP) loans and SBA Express loans to veteran-owned businesses.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
SBA Information Notice
TO: All SBA Employees and Lenders CONTROL NO.: 5000-20048
SUBJECT: 7(a) Fees Effective October 1, 2020 EFFECTIVE: September 22, 2020
Each year SBA reviews certain fees payable to SBA by 7(a) Lenders (“Lenders”) and borrowers
to determine the appropriate fees to manage the estimated costs of the 7(a) loan program. 1
This Notice announces (1) the annual service fee (also known as the “on-going guaranty fee”)
and the upfront guaranty fee for 7(a) loans for fiscal year 2021 (FY2021), and (2) the exceptions
to those fees authorized for FY2021 for the 7(a) loan program.
FY2021 Annual Service and Upfront Guaranty Fees for 7(a) Loans
The following fees are effective for all 7(a) loans approved October 1, 2020 through September
30, 2021:
1. Annual Service Fee: The annual service fee will be 0.55% (55 basis points) of the
guaranteed portion of the outstanding balance of the loan. Lenders must manually adjust this
fee in the current Authorization Wizard.
2. Upfront Guaranty Fee: Except for Export Working Capital Program (EWCP) loans and
SBA Express loans made to veteran-owned businesses, as defined in the attachment to this
Notice, the upfront guaranty fee will continue to depend on the loan amount and the maturity
of the loan.
a) For loans with a maturity that exceeds 12 months, the fees are:
i) For loans of $150,000 or less: 2% of the guaranteed portion. The Lender may retain
no more than 25% of the fee (i.e., at least 1.5% must be remitted to SBA).
ii) For loans of $150,001 to $700,000: 3% of the guaranteed portion.
iii) For loans of $700,001 to $5,000,000: 3.5% of the guaranteed portion up to
$1,000,000, plus 3.75% of the guaranteed portion over $1,000,000.
1 Fees are effective for the entire fiscal year to maintain the estimated costs of the program unless subsequent Congressional acts
modify the program’s effective subsidy costs.
PAGE 1 of 5 EXPIRES:
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
b) For loans with a maturity of 12 months or less, the fee remains 0.25% of the guaranteed
portion.
When two or more SBA-guaranteed loans are approved within 90 days of each other, the
guaranty percentage and guaranty fee are determined based on the aggregate amount of the
loans. Lenders are not permitted to split loans for the purpose of avoiding fees. This represents
no change to current policy.
For guidance on when all 7(a) loan fees are due, see SOP 50 10 6, Part 2, Chapter 5, Paragraph
C.
3. Upfront Guaranty Fee for EWCP Loans of any Size (up to $5 million maximum):
a) For EWCP loans with a maturity of 12 months or less, the upfront guaranty fee remains
0.25% of the guaranteed portion;
b) For EWCP loans with a maturity between 13 months and 24 months, the upfront guaranty
fee is 0.525% of the guaranteed portion;
c) For EWCP loans with a maturity between 25 months and 36 months, the upfront guaranty
fee is 0.80% of the guaranteed portion.
When an EWCP loan with an original maturity of up to 24 months is extended beyond
the original maturity date and up to 36 months, an additional guaranty fee is due to
SBA. The Lender must pay SBA the difference in the upfront guaranty fee originally
paid and what the fee would have been if initially approved at the longer maturity.
For example, if an EWCP loan is originally approved at a 12 month maturity on or after
October 1, 2020, and the maturity is extended to 36 months, the guaranty fee due to SBA is
then increased from 0.25% of the guaranteed portion to 0.80% (guaranty fee for EWCP
loans with maturities of 25 months up to 36 months) of the guaranteed portion of the EWCP
Loan. Therefore, the lender must remit to SBA the additional guaranty fee due of 0.55%, or
the updated guaranty fee due of 0.80%, less the 0.25% for the guaranty fee already paid.
4. Upfront Guaranty Fee for SBA Express Loans Made to Veteran-owned Small
Businesses: For all SBA Express loans made to veteran-owned small businesses, the upfront
guaranty fee will be zero in accordance with section 7(a)(31)(G) of the Small Business Act
(15 U.S.C. § 636(a)(31)(G)).
Lenders must document in their loan file the veteran eligibility for fee relief using the
documentation in the Attachment to this Notice and must include a copy of that
documentation with any guaranty purchase request.
5. Additional Guaranty Fee for Extensions of Short-Term Loans
When the maturity of a short term 7(a) loan is extended beyond 12 months, an additional
guaranty fee is due. In addition, as stated in paragraph 3 above, when an EWCP loan with an
PAGE 2 of 5 EXPIRES:
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
original maturity of up to 24 months is extended beyond the original maturity date and up to
36 months, an additional guaranty fee is due. Lenders may contact the appropriate SBA
CLSC (or the Office of International Trade for EWCP loans) for assistance. The additional
fee must be paid electronically to SBA within 30 days from the date the Lender agrees to the
extension or the total loan guaranty will be cancelled. The Lender may charge the additional
fee to the Borrower after the Lender has notified SBA that the maturity has been extended
and has paid the additional guaranty fee.
There is no additional fee relief available for 7(a) loans approved in FY2021.
Questions concerning this Notice may be directed to the Lender Relations Specialist in the local
SBA Field Office. Local SBA Field Offices can be found at https://www.sba.gov/tools/local-
assistance/districtoffices.
Dianna L. Seaborn
Director
Office of Financial Assistance
Attachment
PAGE 3 of 5 EXPIRES:
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
Attachment to SBA Information Notice 5000-20048
SBA Veteran Qualifications
In order to qualify for the fee relief, set forth in section 7(a)(31)(G) of the Small Business Act, as
discussed in this Notice, businesses must be 51% or more owned and controlled by an individual
or individuals in one or more of the following groups:
• Veterans (other than a veteran who received a Dishonorable or Bad Conduct Discharge);
• Service-Disabled Veterans;
• Active Duty Military service member participating in the military’s Transition Assistance
Program (TAP);
• Reservists and National Guard Members; or
• Current spouse of any Veteran, Active Duty service member, or any Reservist or
National Guard member; or widowed spouse of a service member who died while in
service or of a service-connected disability.
SBA Veteran Documentation Requirements
• Veteran: Copy of Form DD 214, which is provided for other than dishonorably
discharged veterans.
• Service-Disabled Veteran: Copy of Form DD 214 or documentation from the DVA that
the veteran has been determined as having a service-connected disability.
• Transitioning Active Duty Military Member: DD Form 2, "U.S. Armed Forces
Identification Card (Active)," or DD Form 2, "Armed Forces of the United States Geneva
Conventions Identification Card (Active)" and DD Form 2648 (Active Duty Military
member) or DD Form 2648-1 (Reserve Component member ).
• Reservists and National Guard: DD Form 2, Armed Forces of the United States
Identification Card (Reserve).
• Current Spouse of Veteran: The veteran’s Form DD 214 and evidence of status as a
current spouse.
• Current Spouse of Transitioning Active Duty Military Member or Current
Reservist/National Guard Member: DD Form 1173, Department of Defense Guard
Reserve Family Member Identification Card, and evidence of status as the current spouse.
• Widow of Active Duty Service Member who died in service or Widowed Spouse of
Veteran who died of a service-connected disability: Documentation from DOD or from
DVA clearly showing this to be the case.
PAGE 4 of 5 EXPIRES:
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
Acceptable Alternatives
If the veteran’s Form DD 214 is unavailable, a “Certification of Military Service” (NA Form
13038) is an acceptable equivalent.
For any category listed above that requires a photocopy of a military ID, as an alternative to
photocopying the military ID, the service member may provide a “statement of service” signed
by, or by the direction of, the adjutant, personnel office, or commander of the unit or higher
headquarters they are attached to. There is no one unique form used by the military for a
statement of service. While statements of service are typically on military letterhead, some may
be computer-generated. The statement of service must clearly show:
1) The Service member’s full name;
2) The Service member’s Social Security Number (SSN) or the last 4 digits of SSN;
3) The entry date on active duty or the entry date of applicant’s Reserve/Guard duty, as
applicable (depending on whether the applicant is on active duty or is a current member
of the Reserves or National Guard);
4) The duration of lost time, if any (for active duty); and
5) The name of the command providing the information.
Note for Current Reserve/Guard Members: The statement must clearly indicate that the applicant
is an “active” reservist and not just in a control group (inactive status).
PAGE 5 of 5 EXPIRES:
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
File and source
- File
- 2020-09_SBA-Information-Notice-5000-20048_7-a-Fees-Effective-October-1-2020-508.pdf
- Size
- 169,635 bytes
- SHA-256
- 928bb16a2e159785e72a0cea04521f2b1526258d510ecaf8f6b8a04363068353
- Original
- www.sba.gov