# What happens if you miss a payment on an SBA loan?

**Short answer:** A lender may charge up to 5% of the regular payment when more than 10 days late. After more than 29 days unpaid, the loan is not current under SBA rules. Sources: 13 CFR 120.221(d); SOP 50 10 8.1, Sec. A, Ch. 1, Para. E.

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Last checked: 2026-11-09

A late fee can come first. A 7(a) lender may charge up to 5% of the regular payment when more than 10 days late. See 13 CFR 120.221(d) and SOP 50 10 8.1, Sec. A, Ch. 4, Para. C.2.d. The fee belongs to the lender, and SBA's guaranty does not cover it.

## When a loan stops being current

SBA treats a loan as not current when a required payment stays unpaid for more than 29 days (Sec. A, Ch. 1, Para. E). While it is not current:

- Your business cannot get a new 7(a) or 504 loan number.
- Refinancing needs a debt current for at least the last 12 months or the life of the loan, whichever is less (Appendix 14, Para. A).

## Credit reporting

Lenders are required to report to credit agencies when they extend credit on an SBA loan. They should keep reporting servicing, liquidation and charge-off activity (Sec. B, Ch. 6, Para. D.7).

## If the default continues

Once an installment is more than 60 calendar days in default and uncured, a lender may ask SBA to honor its guarantee. Business personal property securing the loan must be liquidated first (13 CFR 120.520(a)(1)).

## On a 504 loan

Payments received after the 15th may carry a late fee. It is 5% of the late payment or $100, whichever is greater (13 CFR 120.971(a)(4)).

## Call before you miss

Talk to your lender early. SBA permits deferments and other changes, and your lender can explain which apply to your loan.

## Sources

- [13 CFR § 120.221](https://www.ecfr.gov/current/title-13/section-120.221)
- [13 CFR § 120.520](https://www.ecfr.gov/current/title-13/section-120.520)
- [13 CFR § 120.971](https://www.ecfr.gov/current/title-13/section-120.971)
- [SOP 50 10 8.1, Sec. A, Ch. 4, Para. C.2.d (about p. 69)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, Sec. A, Ch. 1, Para. E, existing SBA loans (about p. 27)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, Appendix 14, Para. A (p. 355)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, Sec. B, Ch. 6, Para. D.7 (about p. 213)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)