7(a) Fee Waivers Coming to an EndSeptember 29, 2021
Last week, on September 24, a lender received an email from the Citrus Heights SBA field office stating that the 7(a) fee waivers from the CARES Act had been exhausted as of the day before:
“PLEASE NOTE – As of 9/23/21 funding from the CARES Act has been exhausted. Therefore, a guarantee fee, as well as the annual servicing fee, will be charged on this loan. The 90% guarantee, however, remains in place through 9/30/21. Please adjust your loan structure to reflect how the guarantee fee will be paid.
Sorry for the inconvenience we may have caused.”
Subsequently, the SBA head office sent an email with a correction stating that the “Fee waiver is still in effect.” The fees are still being waived until September 30 or until the funds run out.
Currently, the SBA recommends lenders to disregard any messages stating that guaranty and servicing fees will be due. It is expected that the CARES Act will be able to finance the 7(a) fee waivers until the end of the fiscal year.
Starting in the new fiscal year, October 1, the 7(a) loan program will start charging gurantee fees and servicing fees. All loans $350,000 or less will have no guarantee or servicing fees. Loans over $350,000 to $1 million will have an annual fee of 0.49%. This fee will increase to 0.55% for loans above $1 million. If the loan has a maturity of a year or less, the guarantee fee will be 0.25%. The guarantee fee will range from 2.77% to 3.75% if the loan’s maturity is more than a year.
More details can be found here.