What fees does an SBA 504 loan charge?

A 504 loan carries CDC, SBA, funding and underwriter fees, and most are financed in the gross debenture (SOP 50 10 8.1, Sec. C, Ch. 3, Para. B, p. 283). The allowable fees are listed at Sec. A, Ch. 4, Para. E.2 (Para. E begins p. 80) and 13 CFR § 120.971.

Upfront

• CDC processing fee: up to 1.5% of the net debenture.
• CDC closing fee: up to $10,000 can be financed from debenture proceeds (13 CFR § 120.883).
• SBA guaranty fee: 0.50% for FY2027 (SBA Information Notice 5000-881796).
• Funding fee: 0.25% of the net debenture.
• Underwriter's fee: 0.4% on 20-year and 25-year debentures, and 0.375% on 10-year debentures.

Ongoing

• CDC servicing fee: at least 0.625% a year and no more than 2%. A fee above 1.5% in a rural area or 1% elsewhere needs SBA's prior approval.
• SBA annual fee: 0.203% of the outstanding balance for FY2027.
• Late payment: 5% of the late payment or $100, whichever is greater.

SBA's worked example

A $350,000 net debenture becomes a $362,000 gross debenture. The example adds a $1,750 guaranty feeguaranty feeA fee SBA charges on the guaranteed part of a loan. The lender pays it and may pass it to you. Full definition, $875 funding fee, $5,250 processing fee, $2,500 closing costs and the underwriter's fee (Ch. 3, Para. B).

Other costs

A one-time 0.50% participation fee applies to the senior third party loan (13 CFR § 120.972). The CDC may take a deposit of $2,500 or 1% of the net debenture, whichever is less (13 CFR § 120.935).