SBA 504 Fee Reduction
October 1, 2015 504
504 Fees Reduction Effective on October 1, 2015:
The U.S. Small Business Administration (SBA) has decreased two fees for the SBA 504 Loan Program effective October 1, 2015. The fee reductions include a reduction in the total debenture amount and a reduction in the ongoing interest rate..
- The “up front” SBA Guarantee Fee has been reduced from 0.5% to zero in FY16. This is the one-time fee included in the Administrative Costs added to the Net Debenture Proceeds. Thus, 504 loans will have a reduction in fees from 2.66% to 2.16% for this coming fiscal year!
- Example: $2,000,000 total project cost/ $800,000 SomerCor Loan (40%) = $4,000 savings to the borrower.
- The Ongoing SBA Guarantee Fee (paid annually) is reduced from 0.9375%, or 93.75 basis points per annum, to 0.914% or 91.4 basis points per annum of the outstanding balance of the loan.