# Can I pay the SBA guaranty fee with loan proceeds?

**Short answer:** Yes. The lender pays SBA and may pass the cost to you, and you may use loan proceeds to cover it. The first disbursement cannot be made primarily to pay the fee, under 13 CFR § 120.220(b).

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Last checked: 2026-11-08

The lender owes the Upfront Fee to SBA and may pass the cost to you (SOP 50 10 8.1, Section A, Chapter 4, Para. C.1.a, p. 62). You may use loan proceeds to pay it. If you do, the SBA Terms and Conditions must include a Use of Proceeds category for the fee.

## Limits on timing

- The first disbursement may not be made solely or primarily to pay the fee (13 CFR § 120.220(b)).
- On loans over 12 months, the lender may charge you after the initial disbursement.
- On loans of 12 months or less, the lender may charge you only after it has paid SBA.
- With an escrow closing, the lender may charge you only when all funds have left escrow.

## When the lender must pay SBA

On loans over 12 months, the lender must pay within 90 days of approval. On loans of 12 months or less, it must pay within 10 business days of the SBA loan number. Those dates cannot be waived or extended. The lender must pay even if you have not paid it.

## Refunds

On a loan over 12 months, a refund requires that the loan has not closed or disbursed and the lender cancels the guaranty. After initial disbursement, no refund is permitted (Para. C.1.a.viii, about p. 66).

## Sources

- [13 CFR § 120.220(b), When the guaranty fee is payable](https://www.ecfr.gov/current/title-13/section-120.220)
- [SOP 50 10 8.1, Sec. A, Ch. 4, Para. C.1.a (p. 62); Para. C.1.a.iii (about p. 64); Para. C.1.a.viii (about p. 66)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)