SBA loan basics
Short answer
The initial upfront fee, known as the SBA guaranty fee, is paid to the SBA to cover the cost of the loan guarantee program and to help offset potential losses from defaulted loans, thus sustaining the program.
The SBA charges an upfront guaranty fee, calculated as a percentage of the guaranteed portion of the loan. This fee, typically passed on to the borrower, is mandated by Congress to cover the administrative costs of the 7(a) loan program and to build reserves against future defaults, ensuring its self-sufficiency.
For a $400,000 loan with a 75% SBA guaranty, the guaranteed portion is $300,000. If the upfront guaranty fee is 2.50% for this loan size, the borrower would pay $7,500 to the SBA through their lender at loan closing.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
7(a) Fees Effective During Fiscal Year 2026
SBA 7(a) Loan Guaranty Fee Calculator
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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