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7(a) Fees Rise, Piggyback Banned
Earlier this month, SBA raised 7(a) loan application
fees and banned the use of piggyback deals. Fees for
smaller loans double, and the loan maximum has fallen
back to $1 million.
Effective October 1, a number of changes occurred
to the 7a loan program:
Here are the key changes:
• The 7(a) maximum guarantee limit is now back to
$1 million. The $1.5 million limit is no longer available
• Piggyback financing is no longer available
• The SBA Express loan maximum is decreased from $2
million to $250,000
• Guaranty fees for loans under $150,000 are doubled
to 2%
• Guaranty fees for loans between $150,000 and $700,000
rise from 2.5% to 3%
• The ongoing fee rises from .36% to .5%
None of these changes apply to the 504 loan program,
which actually saw a decline in loan fees (see related
article in this issue).
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