September 2019
Commercial Lending
SBA 504 Loan Fees Cut for FY 2020

Each year, the Small Business Administration (SBA) reviews certain fees payable to the Agency by 504 borrowers to determine if any of those fees need to be adjusted to cover the estimated subsidy costs of the 504 loan program.

SBA Cuts Fees on 504 Loans for FY 2020Program fees paid on 504 loans will decrease for fiscal year 2020, according to a recent announcement by the SBA.  These changes are applicable only for loans approved on or after Oct. 1, 2019, through Sept. 30, 2020.

Upfront SBA Guarantee Fee:

The Upfront SBA Guarantee Fee will remain at 0.50% (50 basis points) for both standard and refinance 504 loans. (Note: this is not the bank fee, which is paid on the first mortgage amount.)

Ongoing SBA Borrower Fee:

The Ongoing SBA Borrower Fee for 504 standard loans (paid annually) is reduced from 0.368% (36.8 basis points) to 0.3205% (32.05 basis points) of the outstanding balance of the loan.

The Ongoing SBA Borrower Fee for 504 refinance loans (paid annually) is reduced from 0.395% (39.5 basis points) to 0.322% (32.2 basis points) of the outstanding balance of the loan.

The SBA 504 Loan Program provides up to 90% financing at below-market, fixed interest rates and long amortization terms up to 25 years for the purchase of major fixed assets, such as owner-occupied commercial real estate, energy efficient “green” initiatives and/or fixed heavy duty machinery and equipment.

504 loans are paired with private-sector commercial loans and provide up to $5 million of aggregate SBA eligibility on standard 504 projects; up to $5.5 million per 504 energy efficient green project not exceed $16.5 million in the aggregate; and up to $5.5 million per eligible small manufacturing project with no limit on total SBA dollars available.  These are SBA 2nd mortgage loan portions only; there is no limit on overall project dollar size.

For more information about SBA 504 loans in Alabama, Florida or South Georgia, contact a Florida First Capital Loan Officer or email us at  Phone: 850.681.3601 or toll-free at 800.504.LOAN.