SBA SOP 50 10 8, A.Ch4.C.2 — Fees and Expenses the Lender May Collect from the Applicant or Borrower
Verbatim text of SBA SOP 50 10 8 section A.Ch4.C.2 (Fees and Expenses the Lender May Collect from the Applicant or Borrower), effective 2025-06-01. 4 provision(s) quoted from the SOP PDF. SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.
Verbatim regulatory text
Verbatim provisions from SBA SOP 50 10 8, A.Ch4.C.2 — Fees and Expenses the Lender May Collect from the Applicant or Borrower — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
SOP 50 10 8 A.Ch4.C.2
2. Fees and Expenses the Lender May Collect from the Applicant or Borrower In 13 CFR § 120.221, SBA provides specific guidance on the fees a 7(a) Lender or its Associates may collect from an Applicant or Borrower in connection with an SBA-guaranteed loan. Packaging Fees 13 CFR § 120.221(a) i. The Lender may charge an applicant reasonable fees (customary for similar Lenders in the geographic area where the loan is being made) for packaging and other services. “Packaging services” include assisting the Applicant with completing one or more applications, preparing a business plan, cash flow projections, and other documents related to the application. The Applicant may not be charged for the same service by two different entities, and, if the Lender engages the services of a Lender Service Provider (LSP), it may not pass through to the Applicant any fees charged for work performed by the LSP. ii. The Lender must advise the Applicant in writing that the Applicant is not required to obtain or pay for unwanted services. The Lender must itemize for the Applicant in writing any fees charged in association with the 7(a) loan. Itemization means listing the category of fees identified under 13 CFR § 120.221. SBA may review these fees at any time. Lender must refund any such fee considered unreasonable by SBA.
SOP 50 10 8 A.Ch4.C.2.iii
iii. As part of its packaging fee, Lenders may charge fees associated with technology services (whether developed internally or purchased from a third party) for software or technology used in connection with preparing SBA loan documents, underwriting, or closing the SBA-guaranteed loan. Note: Entities providing technology services that include underwriting are considered to be LSPs and must be providing their services to the Lender under an SBA- reviewed LSP Agreement. iv. SBA permits the Lender to charge the Applicant a flat fee of up to $2,500 per loan without documenting the service performed. The Lender must disclose any amounts charged to the Applicant by the Lender in E-Tran. v. For fee amounts in excess of $2,500, the Lender must complete an SBA Form 159 in accordance with Paragraph D.8., Disclosure of Fees – SBA Form 159, in this Chapter. a) For fees charged on an hourly rate, the fees must be reasonable and customary for the services actually performed and consistent with fees charged on an hourly rate for the Lender’s similarly-sized non-SBA guaranteed commercial loans. b) For fees charged based on a percentage of the loan amount, the fee may not exceed what the Lender charges on a percentage basis for the Lender’s similarly-sized non-SBA guaranteed commercial loans or the following, whichever is less: i) 5% for loans $150,000 or less; ii) 3% for loans in excess of $150,000; iii) the maximum fee that may be charged to an Applicant on a percentage basis is $30,000. vi. The Lender may not split a loan into two loans for the purpose of charging an additional fee to the Applicant. Even if there is a legitimate business need for the Applicant’s loan request to be split into two loans (e.g., a term loan and a line of credit), the Lender may only charge the Applicant one fee within the maximums set forth above, based on the combined loan amounts. However, it is not SBA’s intention to restrict a Lender from charging a new fee if an Applicant subsequently returns to the Lender to apply for a new loan for a different project or purpose. (Loans approved more than 90 days apart are considered to be for a different project or purpose.) Extraordinary Servicing Fee. 13 CFR § 120.221(b) i. A Lender may not charge the Borrower a servicing fee on an SBA-guaranteed loan unless the servicing fee is to cover expenses for extraordinary servicing requirements connected with the loan. Such a fee may not exceed 2% per year on the outstanding balance of the part of the loan requiring special servicing. Examples of extraordinary servicing fees include amounts to service construction loans or monitor accounts receivable and inventory collateral in asset-based lending. In addition, if the Lender charges an extraordinary servicing fee on its similarly-sized, non-SBA guaranteed commercial loans, it may not charge a higher fee on its SBA-guaranteed loans. If the Lender does not charge an extraordinary servicing fee on its similarly-sized, non-SBA guaranteed commercial loans, it may not charge an extraordinary servicing fee on its SBA-guaranteed loans. ii. A Lender may charge extraordinary servicing fees in excess of 2% for EWCP or Working Capital CAPLine loans that are disbursed based on a Borrowing Based Certificate. The fees charged must be reasonable and prudent based on the level of extraordinary effort required and must not be higher than the fees charged on the Lender’s similarly-sized, non-SBA guaranteed commercial loans. iii. Lenders must obtain SBA’s prior written approval for the fees in Subparagraph b.i. and b.ii. above and must include the extraordinary servicing fees to be charged to administer the loan/line in its credit memorandum. Lenders submitting applications under delegated authority must enter the amount of the fee to be charged in E-Tran and certify in the credit memorandum that the fee is reasonable and prudent based on the level of extraordinary effort required. SBA’s issuance of a loan number will constitute its prior written approval of the fees, subject to SBA’s subsequent review of the fees for reasonableness. SBA will review such fees when conducting Lender oversight activities and at time of guaranty purchase. If SBA determines the fee is excessive, the Lender must reduce the fee to an amount SBA deems reasonable, refund any sum in excess of that amount to the Borrower, and refrain from charging or collecting from the Borrower any funds in excess of the amount SBA deems reasonable. SBA’s guaranty does not extend to extraordinary servicing fees and, at time of guaranty purchase, SBA will not pay any portion of such fees. iv. The following actions do not qualify as extraordinary servicing and therefore a participating Lender is prohibited from collecting fees for these services: a) Changing the installment amount to avoid circumstances where the required payment amount will not be sufficient to pay the loan in full by the maturity date; b) Changing the installment amount after a deferment; c) Providing the release or exchange of collateral (standard out-of-pocket expenses such as recordation fees are permitted); or d) Any modification to the repayment terms of the note. Out-of-Pocket Expenses. 13 CFR § 120.221(c) i. The Lender may collect from the Applicant necessary out-of-pocket expenses such as filing or recording fees, photocopying, delivery charges, collateral appraisals and environmental investigation reports that are obtained in compliance with SBA policy, and other direct charges related to loan closing. These costs must be itemized and kept in the loan file for SBA’s review.
SOP 50 10 8 A.Ch4.C.2.iii.ii
ii. Fees charged for legal services must be for services performed by an attorney licensed in the project state, regardless of whether the attorney is in-house or outside counsel. a) Lenders may be reimbursed by the Applicant for the direct costs (including reasonable overhead) of legal services performed by the Lender’s in-house counsel in connection with an SBA-guaranteed loan, but in no event may the Lender be reimbursed for an amount that would exceed the cost of outside counsel. b) In accordance with 13 CFR § 120.221(e), charges for legal services must be charged on an hourly basis. The Lender or its Associate may not pass on to the Applicant/Borrower any cost of legal services not calculated on an hourly basis for services provided in connection with the Applicant/Borrower’s transaction.
SOP 50 10 8 A.Ch4.C.2.iii.iii
iii. Direct costs associated with out-of-pocket expenses described in this section in connection with the loan closing should not be reported on SBA Form 159, but must be available for SBA review when conducting lender oversight activities. Late Payment Fee. 13 CFR § 120.221(d) Lenders may charge the Borrower a late payment fee not to exceed 5% of the regular loan payment when the Borrower is more than 10 days delinquent on its regularly scheduled payment. The fee is the property of the Lender and is not shared with the investor if the loan is sold into the Secondary Market. SBA’s guaranty does not extend to late fees and, at time of guaranty purchase, SBA will not pay any portion of such fees. Assumption Fee. Lenders should review SBA’s SOP 50 57, 7(a) Loan Servicing and Liquidation, for procedures to process an assumption request. i. In the case of an assumption of the loan by another entity, SBA does not require a new guaranty fee, and lien positions are often maintained eliminating the need for recording fees. As an incentive for a 7(a) Lender to retain an existing loan, SBA allows a 7(a) Lender to charge an assumption fee that is consistent with its assumption fee the 7(a) Lender charges on its non-SBA guaranteed loans. The fee must be reasonable in relation to services provided and cannot exceed 1 percent of the principal balance outstanding at time of assumption. SBA’s guaranty does not extend to assumption fees and, at time of guaranty purchase, SBA will not pay any portion of such fees. ii. This fee may be paid by the seller or the assumptor.
Operationalizing SBA SOP 50 10 8, A.Ch4.C.2 — Fees and Expenses the Lender May Collect from the Applicant or Borrower
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Source of record: https://claudeforcompliance.com/regs/sba-sop-a-ch4-c-2/
· register sba-sop-a-ch4-c-2 · Claude for Compliance. Free to read and download;
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