{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/how-does-the-ongoing-servicing-fee-affect-the-annual-percentage-rate-apr-calculation-for-a","api_url":"https://dealroom.so/api/public/questions/how-does-the-ongoing-servicing-fee-affect-the-annual-percentage-rate-apr-calculation-for-a","question":"How does the ongoing servicing fee affect the annual percentage rate (APR) calculation for a 7(a) loan?","topic":"Guaranty fees","audience":"lender","bot_mode":"lender","short_answer":"The ongoing servicing fee (OSF) is a cost of the loan and must be included in the APR calculation, increasing the effective annual cost to the borrower.","rule":"The ongoing servicing fee, paid by the borrower to the lender and then remitted to the SBA, is considered a finance charge. As such, it must be included in the calculation of the Annual Percentage Rate (APR) under Truth in Lending Act (TILA) requirements. This ensures full transparency of the total cost of credit to the borrower.","example":"A $1,000,000 7(a) loan has an interest rate of 8% and an ongoing servicing fee of 0.36% of the guaranteed portion. When calculating the APR, the lender must incorporate both the 8% interest and the equivalent annual dollar amount of the 0.36% servicing fee, which will result in an APR higher than 8%.","what_lenders_check":"Lenders must accurately calculate and disclose the APR, including all applicable fees like the ongoing servicing fee. Miscalculation or non-disclosure can lead to TILA violations, regulatory fines, and reputational damage.","required_facts":["Ongoing servicing fee","APR calculation","Truth in Lending Act","Finance charge","Borrower cost"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","7(a) Fees Effective During Fiscal Year 2026","13 CFR Part 120 - Business Loans"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"7(a) Fees Effective During Fiscal Year 2026","url":"https://www.sba.gov/sites/default/files/2025-08/Info%20Notice%20-%207%28a%29%20Fees%20FY%202026%20%28FINAL%208-28-25%29.pdf"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[{"question":"How is the upfront guaranty fee calculated for a 7(a) loan of $500,000 for FY2026?","url":"https://dealroom.so/for-lenders/questions/how-is-the-upfront-guaranty-fee-calculated-for-a-7-a-loan-of-500-000-for-fy2026"},{"question":"What is the process for a lender to remit the SBA upfront guaranty fee after loan closing?","url":"https://dealroom.so/for-lenders/questions/what-is-the-process-for-a-lender-to-remit-the-sba-upfront-guaranty-fee-after-loan-closing"},{"question":"How does the SBA calculate the 7(a) loan guaranty fee when the loan amount is precisely $1,000,000 for FY2026?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-calculate-the-7-a-loan-guaranty-fee-when-the-loan-amount-is-precisely-1-0"},{"question":"When is the ongoing SBA servicing fee (annual service fee) for a 7(a) loan typically collected from the lender?","url":"https://dealroom.so/for-lenders/questions/when-is-the-ongoing-sba-servicing-fee-annual-service-fee-for-a-7-a-loan-typically-collecte"},{"question":"How do the upfront SBA guaranty fees differ for 7(a) loans between $150,001 and $700,000 for FY2026?","url":"https://dealroom.so/for-lenders/questions/how-do-the-upfront-sba-guaranty-fees-differ-for-7-a-loans-between-150-001-and-700-000-for-"},{"question":"How do the ongoing annual service fees for 7(a) loans impact the lender's accounting and remittance to SBA?","url":"https://dealroom.so/for-lenders/questions/how-do-the-ongoing-annual-service-fees-for-7-a-loans-impact-the-lender-s-accounting-and-re"}],"related_terms":[{"term":"Annual Ongoing Servicing Fee","url":"https://dealroom.so/glossary/annual-ongoing-servicing-fee"},{"term":"Annual Percentage Rate","url":"https://dealroom.so/glossary/annual-percentage-rate"},{"term":"Ongoing servicing fee","url":"https://dealroom.so/glossary/ongoing-servicing-fee"},{"term":"Variable-rate 7(a) loan","url":"https://dealroom.so/glossary/variable-rate-7-a-loan"},{"term":"Servicing fee","url":"https://dealroom.so/glossary/servicing-fee"},{"term":"Ongoing guaranty fee","url":"https://dealroom.so/glossary/ongoing-guaranty-fee"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/for-lenders/questions/how-does-the-ongoing-servicing-fee-affect-the-annual-percentage-rate-apr-calculation-for-a","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}