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Glossary · SBA

Annual service fee (SBA lender's fee)

Also called: SBA on-going guaranty fee, lender's annual service fee

Defined by the Research desk, The Lender Report · Sources reviewed

A yearly fee a 7(a) lender pays SBA on the outstanding balance of the guaranteed portion of each loan. On a 7(a) loan the lender may not pass it on to the borrower.

For 7(a) loans with an approval date from October 1, 2026 through September 30, 2027, the fee is 0.55 percent of the outstanding balance of the guaranteed portion. A loan whose guaranteed portion is $1,500,000 costs the lender $8,250 in that year, and the fee shrinks as the loan pays down. The rate is set by the year of the loan’s approval date and stays with the loan.

The 504 program has its own ongoing fee, also called the annual service fee. For 504 loans with an approval date in the same fiscal year it is 0.203 percent of the outstanding loan balance, and it is one of the charges a 504 borrower can carry. It is waived for loans to manufacturers, businesses in the food supply chain codes SBA lists, and businesses in a rural area.

How it shows up in the data here

Not in any public file, because it is a cost between the lender and SBA and not a loan term. You can estimate it: take the SBA guaranteed amount in the loan file, multiply by the year's percentage, and let the balance run down. The 7(a) payment calculator shows the first-year amount for your loan.

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Related terms

  • Upfront guaranty fee (SBA 7(a)): The one-time fee a 7(a) lender pays SBA for its guaranty, set by loan size and charged on the guaranteed portion. The lender may pass it on to the borrower.
  • SBA guaranty percentage: The share of a 7(a) loan that SBA guarantees to the lender: up to 85 percent of a loan of $150,000 or less, up to 75 percent of a larger loan, and 50 percent on SBA Express.
  • SBA 7(a) loan: SBA's main business loan program. A lender makes the loan and SBA guarantees part of it: up to 85 percent of $150,000 or less and 75 percent of more, on loans up to $5,000,000.
  • SBA 504 loan: A fixed-asset financing in which a bank lends 50 percent or more, a certified development company funds up to 40 percent through an SBA debenture, and the borrower puts in at least 10 percent.

Sources

  1. SBA Information Notice 5000-881797, 7(a) fees for fiscal year 2027, published .
  2. SBA Information Notice 5000-881796, 504 fees for fiscal year 2027, published .

Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.