Glossary · The loan itself
Service fee(Ongoing servicing fee)
In short
A recurring charge paid to a lender for managing and administering your loan. As a buyer, this is an ongoing cost that impacts your loan's effective interest rate and overall debt service.
What it means in a deal
For SBA 7(a) loans, the lender charges a monthly service fee, typically a percentage of the outstanding principal balance. This fee is separate from the interest rate and the SBA's upfront guaranty fee. Factor it into your global cash flow projections to understand the true cost of borrowing.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Service fee
- When is the annual service fee waived for a 7(a) loan?
- What is the purpose of the annual service fee (on-going guaranty fee) for an SBA 7(a) loan?
- What is the process for a lender to remit the upfront guaranty fee and annual service fee to the SBA?
- When is the ongoing SBA servicing fee (annual service fee) for a 7(a) loan typically collected from the lender?
- How does a lender calculate the ongoing servicing fee (annual service fee) due to the SBA for a 7(a) loan?
- How is the ongoing annual service fee for an SBA 7(a) loan determined?
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 2026-06-15 · 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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