Glossary · The loan itself
Guaranty fee
In short
A one-time SBA fee, charged on the guaranteed part of the loan — roughly 2–3.5% depending on size. Usually rolled into the loan.
What it means in a deal
The SBA charges lenders a guaranty fee as compensation for backing the loan, and lenders pass it to borrowers. On a $1M loan at 75% guaranty, the fee typically runs $18,750–$26,250 and gets tacked onto the loan balance rather than paid at closing. The good news is that it doesn't come out of your equity injection — the fee rolls in on top. Budget for it in your total project costs and ask your lender what the exact figure will be before you sign the LOI.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
Last checked 2026-06-16. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Guaranty fee
- Are there any other lender-specific fees beyond the SBA guaranty fee and ongoing servicing fee?
- Can the lender charge application fees or underwriting fees in addition to the SBA guaranty fee?
- Beyond the upfront guaranty fee, what other ongoing fees or charges are associated with an SBA 7(a) loan?
- Are there any annual fees I must pay on an SBA 7(a) loan after the upfront guaranty fee?
- What is the purpose of the annual service fee (on-going guaranty fee) for an SBA 7(a) loan?
- What is the typical range for the SBA 7(a) loan processing fee (upfront guaranty fee) for an acquisition loan?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-16 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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