Donna Genie breaks down temporary SBA 504 fee cuts running through September 2024. Loans up to $1 million now have zero upfront guarantee fee. Loans between $1 million and $2 million see fees cut by more than half. Banks still charge a 0.5% first-mortgage fee.
October 1, 2023 through September 30, 2024.
0% (fee removed).
The fee is reduced by over half (relative to prior levels).
50 basis points (0.5%).
Hey there, small business owners and entrepreneurs. We've got some great news from the sba. This could be a game changer if you're looking at getting a loan with the SBA with their business financing and their 504 loans. Now, 504 loans, just a fancy term. It's basically for expanding business and buying equipment, buildings, and getting into business. So the SBA has just announced that they have a decrease in their program fees for the 504 loans. Now, many times people look at 504 loans and say, oh, my gosh, the interest rate is high and there are all these fees tacked on top. Well, the good news for you is that up to $1 million in SBA loans on a 504, the fee has been removed completely. If you are looking at loans between a million and 2 million, the fee has been reduced by over half. Great news. So if we break down these changes, effective October 1, 2023, through September 30, 2024, so one year, the fees are reduced to zero. The upfront SBA guarantee fee will be 0%. Good job. And there's no extra percent on top for these loans. So keep in mind that the bank fee still is 50 basis points, or 0.5% that gets applied to the first mortgage. There are a lot of technical issues with the percentages and things, but what you need to know is that the SBA504 program just got a little cheaper and a little more beneficial. They want to encourage people to take advantage of that program. So if you're in the lineup for an SBA loan, check with your banker now and see what changes have occurred since October 1st to see if those fees will help you out.
