§ 120.221 - Fees and expenses that the Lender may collect from a loan applicant or Borrower.

§ 120.221 Fees and expenses that the Lender may collect from an Applicant a loan applicant or Borrower.

Cross Reference

Link to an amendment published at 85 FR 80588, Dec. 14, 2020.

Unless otherwise allowed by SBA Loan Program Requirements, the Lender may charge and collect from the applicant or Borrower only the following fees and expenses:

(a) Fees that can be collected from the Applicant for assistance in obtaining a loanService and packaging fees. The Lender may collect a fee from an Applicant (as defined in § 103.1 of this chapter) for assistance with obtaining an SBA-guaranteed loan. The fee may not exceed $3,000 for a loan up to and including $350,000 and may not exceed $5,000 for a loan over $350,000charge an applicant reasonable fees (customary for similar Lenders in the geographic area where the loan is being made) for packaging and other services. The Lender must advise the Applicant applicant in writing that the Applicant applicant is not required to obtain or pay for unwanted services. In cases where the Lender charges any fees to the Applicant in excess of those specified in this part, the Lender must reduce the charge and refund to the Applicant any amount in excess of the permitted fee. If the Lender charges the Applicant a fee for assistance with obtaining an SBA-guaranteed loan, the fee must be disclosed to SBA in accordance with § 103.5 of this chapter and documented in accordance with Loan Program Requirements. The applicant is responsible for deciding whether fees are reasonable. SBA may review these fees at any time. Lender must refund any such fee considered unreasonable by SBA.

(b) Extraordinary servicing. Subject to prior written SBA approval, if all or part of a loan will have extraordinary servicing needs, the Lender may charge the applicant a service fee not to exceed 2 percent per year on the outstanding balance of the part requiring special servicing. For certain revolving lines of credit made under § 120.390 and on Export Working Capital Program loans

(

as allowed under § 120.344(b)), subject to SBA's prior written approval, the Lender may charge extraordinary servicing fees in excess of 2 percent per year on the outstanding balance of the part requiring special servicing, provided the fees are reasonable and prudent.

(c) Out-of-pocket expenses. The Lender may collect from the applicant necessary out-of-pocket expenses such as filing or recording fees.

(d) Late payment fee. The Lender may charge the Borrower a late payment fee not to exceed 5 percent of the regular loan payment.

(e) Legal services. Lender may charge the Borrower for legal services rendered on an hourly basis.

[61 FR 3235, Jan. 31, 1996, as amended at 82 FR 39503, Aug. 21, 2017; 85 FR 7648, Feb. 10, 2020; 85 FR 80588, Dec. 14, 2020]