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The SBA Reduced Guarantee Fees effective October 1st, 2023

The SBA Reduced Guarantee Fees effective October 1st, 2023

SBA 7(a) loan guarantees refer to the assurance provided by the Small Business Administration (SBA) to a lender, such as a bank or credit union, that a significant portion of a small business loan will be repaid if the borrower defaults on the loan. The SBA does not directly lend money to small businesses but rather encourages lenders to offer loans to small businesses by offering a government guarantee.

The guarantee fee is one of the costs associated with obtaining an SBA 7(a) loan and is paid by the borrower. It helps support the SBA’s loan guarantee programs, making it possible for lenders to provide financing to small businesses that might not otherwise qualify for conventional loans due to a lack of collateral from the business assets. The fee can be financed as part of the loan, so borrowers don’t necessarily have to pay it upfront in cash.

Effective October 1st, 2023, for loans under $1MM, the guarantee fee is now 0.00% of the guaranteed portion or $0. For loans over $1MM the fee was 3.5% for the guaranteed portion up to $1MM and 3.75% for the guaranteed portion over $1MM. Under the new rule, the guarantee fee for loans $1MM-$2MM is only 1.45% of the guaranteed portion (up to $1MM) and 1.70% of the guaranteed portion over $1MM. So, the cost for borrowing money with an SBA guaranteed loan to acquire or expand a business is now less expensive when taking all costs into consideration.

In light of higher interest rates and other current challenges, the reduced guarantee fees will make the financing process a little less painful.

If you are considering the acquisition of a business or a business expansion, keep in mind that the Loans4Biz program was established to help buyers obtain financing options and close on a loan as quickly as possible.

The Loans4Biz program saves participants time and money by offering the following benefits:

– Assistance with gathering and completion of documents required by most lenders

– Initial communication with all lenders managed by the Loans4Biz program manager

– Much better chance of finding a lender who is interested in providing a loan

– A number of financing options presented for consideration


Although the Loans4Biz program was created to assist buyers of businesses listed by CBI, the benefits of using the Loans4Biz program are available to anyone who needs assistance with financing…whether or not you are buying a business listed by CBI.

To learn more about the Loans4Biz program, contact Kelly Tivis @ 479-770-8989 or