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Important fee updates to the SBA 7a loan program that could impact your small business’s finances

The U.S. Small Business Administration recently announced that it is reinstating the Guaranty (Upfront) Fee for all 7(a) loan products. These fees were previously suspended during the previous administration to assist small businesses during the pandemic. For small business owners, this means new fees on all new loans made after March 27, 2025. To assist you in navigating these changes and selecting the appropriate SBA loan product for your financing needs, we have compiled a list of key updates to know about.

  • The 7(a) program and 7(a) working capital pilot loans have a 0.55% annual service fee on the guaranteed portion of the outstanding balance. 
     
  • Loans under $150,000, with a maturity exceeding 12 months, have a 2% fee on the guaranteed portion.
     
  • Loans from $150,000 to $700,000, with a maturity exceeding 12 months, have a 3% fee on the guaranteed portion.
     
  • Loans of $700,001 to $5 million have fees of 3.5% of the guaranteed portion,up to $1 million, plus 3.75% of the guaranteed portion over $1 million. 
     
  • Upfront fees for Express Loans made to businesses owned and controlled by a veteran or spouse of a veteran are now based on the total maturity of the loan. Fees start at 0.25% and go up to 0.8%.

Upfront fees for the Working Capital Pilot Program have increased to 0.25% for loans that are 12 months or less and under $1 million. For loans of 49 months to 60 months, fees are based on the total length of the loan, starting at 0.25% up to 1.35%. 

Read the Small Business Administration's official information notice here to learn more.

Starting on June 1, 2025, the following standards will take effect:

 

  • The cap for small-dollar loans will return to $350,000, a change from the previous $500,000 cap that was in place last year. 
  • Collateral is now required for all loans. Previously, collateral requirements were waived for loans beyond a business’s assets.
  • Small businesses that are less than two years old need to provide a 10%  equity injection when applying for a 7(a) loan. The injection is seen as a guarantee for lenders in which an entrepreneur would post 10%of a project’s cost from their own funding without reducing the loan principal. 
  • Businesses seeking 7(a) loans are required to verify the citizenship status of all beneficial owners. This is an increase from previous standards requiring 51%of a company’s ownership to be U.S. citizens or have permanent green cards.