SBA Reinstates Guarantee Fees Effective March 27th

In a significant policy shift, the Small Business Administration (SBA) has officially announced the return of guarantee fees for SBA-backed loans, effective March 27, 2025. According to SBA notice 5000-865758, loans that have not received SBA authorization by 11:59 PM EST on March 26th will be subject to the newly reinstated fees, marking the end of the recent fee waiver period for loans under $1 million. The 7(a) program has relied for many decades on guarantee fees to keep itself running so it wouldn't require subsidies from the taxpayers.

What you need to know about the new SBA Guarantee Fee structure:

The adjusted upfront guarantee fees for FY 2025—calculated based on the total approved loan amount (both the SBA-guaranteed and unguaranteed portions)—will now be as follows:

For loans with maturities greater than 12 months:

• Loans of $150,000 or less:

  2% of the SBA-guaranteed portion.

• Loans from $150,001 to $700,000:

  3% of the SBA-guaranteed portion.

• Loans from $700,001 to $5,000,000:

  3.5% on the SBA-guaranteed portion up to $1,000,000, plus an additional 3.75% on the guaranteed portion exceeding $1,000,000.

For short-term 7(a) loans (maturities of 12 months or less):

A flat rate of 0.25% of the SBA-guaranteed portion.

These fees apply to all SBA loan programs, except the Export Working Capital Program (EWCP) and SBA Express loans specifically offered to veteran-owned businesses, which will retain existing fee waivers or exemptions.

This update will impact how small businesses approach SBA-backed financing moving forward. Further details and analysis will be shared in our upcoming weekly newsletter.