Rates / SBA guaranty fee
The SBA guaranty fee
SBA charges an upfront fee for guaranteeing a 7(a) loan. It is figured on the guaranteed portion, not the whole loan, and the rate is set by the gross amount. Here is the FY26 schedule, what it costs on a real loan, and who actually pays it.
What the fee is charged on
The guaranty fee is not a percentage of your loan. It is a percentage of the guaranteed portion, the slice of the loan SBA stands behind. SBA guarantees 85% of a loan at or under $150,000 gross and 75% above that. So on a $1,000,000 loan the guaranteed portion is $750,000, and the fee rate applies to that figure, not the full million.
The rate itself is chosen by the gross loan amount, on a tiered schedule SBA resets each fiscal year. These are the FY26 figures, effective October 1, 2025, as carried in our rate file (as of September 28, 2026).
The FY26 guaranty fee schedule
| Gross loan amount | Fee on guaranteed portion |
|---|---|
| At or under $150,000 | 2% |
| $150,001 to $700,000 | 3% |
| $700,001 to $5,000,000 | 3.50%, then 3.75% on guaranteed dollars over $1,000,000 |
| Maturity 12 months or less | 0.25% |
Source: SBA Information Notice 5000-872051, 7(a) fees effective October 1, 2025 for FY2026, as carried in the site's rate file (as of September 28, 2026).
What it costs on a real loan
The two-step calculation, gross to guaranteed portion to fee, is easier to read as worked examples than as a formula. Each row below takes a gross loan over 12 months, applies the guaranteed share, and charges the tier rate on it.
| Gross loan | Guaranteed portion | Upfront guaranty fee |
|---|---|---|
| $150,000 | $127,500 | $2,550 |
| $500,000 | $375,000 | $11,250 |
| $1,000,000 | $750,000 | $26,250 |
| $3,000,000 | $2,250,000 | $81,875 |
Figured with the same schedule the 7(a) calculator uses. Enter your own loan there to see the fee beside the payment.
When the fee is reduced or waived
A few exemptions cut the guaranty fee or zero it out. Two apply under the current FY26 schedule; the rest are set year to year, so a buyer who might qualify should confirm the current fiscal-year fee notice with their lender.
- Small manufacturers pay nothing. A manufacturer in NAICS 31-33 with a gross loan at or under $950,000 pays a 0% upfront guaranty fee in FY26 (MARC loans excluded). The sector comes from the first two digits of the business activity code on the tax return.
- Short-maturity loans pay 0.25%. A loan maturing in 12 months or less is charged 0.25% of the guaranteed portion instead of the standard tiers. Acquisitions rarely run that short, so this mostly affects short-term working-capital loans.
- Veterans may qualify on SBA Express. SBA's Veterans Advantage has, in most recent years, set the upfront fee to zero on SBA Express loans, a faster 7(a) variant capped at $500,000, for businesses majority-owned by veterans, eligible service members, reservists, or their spouses. Standard 7(a) acquisition loans, which are usually larger, are not covered by that specific waiver, and the relief is renewed year to year, so confirm it is active before counting on it.
There is no general small-loan waiver in FY26. SBA has zeroed the fee on small loans in some past fiscal years, and may again, but the fee is reset annually by SBA's fee notice and this year only the exemptions above apply. When none of them fits, the figure the calculator shows is what you pay.
Who pays it, and can you finance it
SBA bills the lender for the guaranty fee, but the lender is allowed to pass the upfront fee to the borrower, and almost always does. It is a real closing cost you should expect to carry. The good news is that it can be financed into the loan rather than paid in cash, so it adds a little to the balance and the payment instead of the amount you bring to closing.
Do not confuse it with the 0.55% annual service fee. That one is charged on the outstanding guaranteed balance every year, it is a lender cost, and SBA rules bar the lender from passing it to you. It never appears in your fee math.
Frequently asked questions
What is the SBA guaranty fee?
It is a one-time, upfront fee SBA charges the lender for guaranteeing a 7(a) loan, which the lender passes on to the borrower. It is charged on the guaranteed portion of the loan, not the full amount, and the rate is set by the gross loan size. It is separate from interest and from the 0.55% annual service fee.
How much is the SBA guaranty fee?
Under the FY26 schedule, for maturities over 12 months: 2% of the guaranteed portion at or under $150,000 gross, 3% through $700,000, and 3.50% above that up to $1,000,000 of guaranteed portion, then 3.75% beyond. On a $1,000,000 loan the fee works out to about $26,250.
Who pays the SBA guaranty fee, the borrower or the lender?
SBA bills the lender, but the lender is permitted to pass the upfront fee to the borrower, and in practice almost always does. The separate annual service fee is a lender cost that may not be passed on to you.
Can the guaranty fee be financed into the loan?
Yes. The upfront fee is commonly rolled into the loan amount and amortized rather than paid in cash at closing. Our 7(a) calculator has a checkbox that models exactly that.
Is there a small-loan guaranty fee waiver?
There is no general small-loan waiver in FY26. The only 0% upfront fee is for manufacturers in NAICS 31-33 at or under $950,000 gross, excluding MARC loans. SBA has zeroed the fee on small loans in some past fiscal years, and the schedule is reset annually, so a small-loan discount can return in a later year.
Are veterans exempt from the SBA guaranty fee?
SBA's Veterans Advantage has in most recent years set the upfront guaranty fee to zero on SBA Express loans (a faster 7(a) variant capped at $500,000) for veteran-owned businesses and eligible family members. Standard 7(a) acquisition loans are usually larger and fall outside that specific waiver, and the relief is renewed year to year, so a veteran buyer should confirm the current fiscal-year status with their lender.
What is the difference between the guaranty fee and the guarantee fee?
Nothing, they are two spellings of the same thing. SBA's documents use "guaranty fee"; "guarantee fee" is the common variant. Both refer to the upfront fee on the guaranteed portion of a 7(a) loan.