Glossary
Guaranty fee
The upfront fee the SBA charges a lender for guaranteeing part of a loan. The lender may pass it to you, and it is calculated on the guaranteed portion rather than on the whole loan.
Guaranty fee: The upfront fee the SBA charges a lender for guaranteeing part of a loan. The lender may pass it to you, and it is calculated on the guaranteed portion rather than on the whole loan.
How it is calculated
Two things confuse borrowers here. The fee is charged on the guaranteed portion, not the full loan amount — but the size band that sets the percentage is based on the gross approval amount. So a loan's band and its fee base are different numbers.
| Loan amount (gross) | Upfront fee (FY2027) |
|---|---|
| $150,000 or less | 2.00% of the guaranteed portion |
| $150,001 to $700,000 | 3.00% of the guaranteed portion |
| $700,001 to $5,000,000 | 3.50% of the guaranteed portion up to $1,000,000, plus 3.75% of the guaranteed portion above $1,000,000 |
The relief most lenders will not volunteer
For fiscal year 2027 the upfront fee is 0% on loans of $700,000 or less made to manufacturers in NAICS 31-33, qualifying food supply chain businesses, and businesses located in a rural area — rural status determined from the project address.
There are two further exceptions: any 7(a) loan with a maturity of 12 months or less pays 0.25%, and SBA Express loans to businesses owned and controlled by a veteran or a veteran's spouse pay nothing.
What you actually pay
- The fee is usually financed into the loan rather than paid from pocket — which means you pay interest on it for the life of the loan.
- The lender also pays SBA an annual service fee of 0.55% of the outstanding guaranteed balance. That one may not be passed to you, so it should never appear in your costs.
- 504 loans have their own schedule: an upfront guaranty fee of 0.50% and an annual service fee of 0.203%, both waived for the same manufacturer, food supply chain and rural categories.