SBA has announced lower fees for the SBA 504 Loan Program during Fiscal Year 2020 that will become effective October 1, 2019.
Ongoing SBA Borrower Fee
- The Ongoing Borrower Fee for standard 504 loans is decreasing from 0.368% to 0.3205% of the outstanding balance of the loan.
- The Ongoing Borrower Fee for refinance 504 loans is decreasing from 0.395% to 0.3220% of the outstanding balance of the loan.
This Means Lower Fees and Lower Effective Rates:
- The decrease in the Ongoing Borrower Fee results in a reduction in the overall effective interest rate by 4.75 bps (or 7.3 bps for refi)
Beginning October 1, 2019, the SBA 504 Loan Program will see lower fees. Each year, SBA reviews the fees payable to the Agency by 504 borrowers and determines if any of those fees need adjusted to ensure the estimated subsidy costs of the program are being covered. These changes are applicable only for loans approved on or after October 1, 2019, through September 30, 2020.
Reference Charts – What to Expect and When: 504Loan-Timeline
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