SBA Updates 504 Loan Program Fees for FY 2020

Money and charts

There’s good news for business owners seeking to finance owner-occupied commercial real estate and our bank partners—fees for the SBA 504 program have been lowered for fiscal year 2020.  The SBA issued an information notice in September with the details and the changes will be applicable to loans approved on or after October 1, 2019 through September 30, 2020. Here’s a helpful summary:

For 504 loans approved during FY20 (other than loans made under the 504 debt refinance without expansion program):

  • The upfront guaranty fee for 504 borrowers will remain at 0.50% (50 basis points) in FY20.
  • The annual service fee is reduced to 0.3205% (32.05 basis points) of the outstanding balance of the loan.

For 504 loans in the 504 debt refinance without expansion program approved during FY20:

  • The upfront guaranty fee for 504 borrowers will remain at 0.50% (50 basis points) in FY20.
  • The annual service fee is reduced to 0.3205% plus 0.0015%, for a total of 0.3220% (32.05 basis points plus 0.15 basis points) of the outstanding balance of the loan.

 These reduced SBA 504 fees mean increased affordability for commercial real estate financing, especially when paired with today’s low, fixed interest rates. Learn more about the SBA 504 loan program today.

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