Fees

SBA 504 Debenture Pricing

SBA 504 Loan fees are financed as part of the debenture. The fees are calculated as a percentage based on the SBA portion of the project (the net debenture amount). The fees are described as follows

*The Underwriters fee is based on the gross debenture amount. The rate is 0.40% for 20 and 25 year debentures, and 0.375% for 10 year debentures.

Servicing Fees

Servicing fees are included in the effective interest rate and reflected in the monthly payment amount. These servicing fees are allocated to SBA, TCM, and the loan servicing agent. At inception, these servicing fees are based on the total loan amount (gross debenture); the fees are then reduced at each five-year interval, at which time they are based on the new outstanding loan balance.

Lender Participation Fee

A one-time fee is paid by the Participating Lender. This fee is equal to one-half percent (0.5%) of the principal amount of the senior mortgage and/or lien associated with the 504 Loan.

Closing Costs

Borrower shall pay all expenses and closing costs including but not limited to recording costs, filing fees, title insurance premiums, hazard insurance premiums, and flood insurance premiums (if applicable) which are required by the U.S. Small Business Administration Terms and Conditions document, as well as attorney fees incurred, if borrower elects to obtain legal representation.

Prepayment Premium

The Borrower may repay the entire outstanding loan balance prior to the maturity date, but may not make partial prepayments. The Borrower prepayment premium is in place for 10 years on 20 and 25 year loans and 5 years for 10 year loans. This premium is equivalent to one year of interest in the first year of the loan term, declining by 10% each year for 20 and 25 years loans and declining 20% each year for 10 year loans. A Schedule of the precise dollar amounts of the premium for each loan is provided after the sale of the debenture.