For an SBA 7(a) loan approved between October 1, 2026 and September 30, 2027, the upfront guaranty fee is 2%, 3%, or 3.5% to 3.75% of the guaranteed portion, not the full loan amount. On a $2,000,000 loan, that's $53,750. Loans of $700,000 or less to manufacturers, certain food supply-chain businesses and rural-area businesses pay no upfront fee. (Figures as of October 2026.)
Dominick Prevete of Blue Sky Capital Advisors arranges SBA 7(a) loans for owner-occupied commercial real estate. The fee is one of the first numbers he works out for an owner, because it's a real closing cost and it changes every October 1. This article walks through the math at the loan sizes owners actually ask about.
How is the SBA 7(a) guaranty fee calculated in FY2027?
The SBA 7(a) upfront guaranty fee is a percentage of the guaranteed portion, which is the share of the loan SBA guarantees to the lender. SBA guarantees 85% of loans of $150,000 or less and 75% of larger loans. So on a $2,000,000 loan the guaranteed portion is $1,500,000, and the fee is figured on that $1,500,000.
For FY2027, SBA Information Notice 5000-881797 (September 3, 2026) sets these tiers for 7(a) loans with maturities over 12 months:
SBA 7(a) upfront guaranty fee tiers, loans approved October 1, 2026 – September 30, 2027 (as of October 2026)
| Loan amount | SBA guaranty | Upfront fee (on the guaranteed portion) |
|---|---|---|
| $150,000 or less | 85% | 2% |
| $150,001 – $700,000 | 75% | 3% |
| $700,001 – $5,000,000 | 75% | 3.5% on the first $1,000,000 guaranteed, plus 3.75% on any guaranteed amount above $1,000,000 |
The tier is set by the loan amount. The percentage is applied to the guaranteed portion. Mixing those two up is the most common reason an owner's own fee estimate comes out wrong.
What does the SBA guaranty fee come to at $500,000, $2 million and $5 million?
Here's the FY2027 SBA 7(a) upfront guaranty fee worked through at five loan sizes. All examples are hypothetical.
Worked FY2027 SBA 7(a) upfront fees, hypothetical loans (as of October 2026; source: SBA Information Notice 5000-881797)
| Loan amount | Guaranty | Guaranteed portion | Upfront fee | Fee as a share of the loan |
|---|---|---|---|---|
| $150,000 | 85% | $127,500 | $2,550 | 1.7% |
| $500,000 | 75% | $375,000 | $11,250 ($0 if waiver-eligible) | 2.25% |
| $700,000 | 75% | $525,000 | $15,750 ($0 if waiver-eligible) | 2.25% |
| $2,000,000 | 75% | $1,500,000 | $35,000 + $18,750 = $53,750 | 2.69% |
| $5,000,000 | 75% | $3,750,000 | $35,000 + $103,125 = $138,125 | 2.76% |
How the two larger rows work:
- $2,000,000 loan. The guaranteed portion is $1,500,000. The first $1,000,000 guaranteed is charged 3.5% ($35,000). The remaining $500,000 is charged 3.75% ($18,750). Total: $53,750.
- $5,000,000 loan. The guaranteed portion is $3,750,000. The first $1,000,000 is charged 3.5% ($35,000). The remaining $2,750,000 is charged 3.75% ($103,125). Total: $138,125.
The SBA 7(a) maximum is $5,000,000 per borrower and its affiliates combined (as of October 2026), so $138,125 is the most a standard FY2027 7(a) upfront fee can be.
What does the guaranty fee cost on a typical SBA real estate loan?
A typical SBA 7(a) real estate loan sits well above the $700,000 waiver cap, so most owners buying or refinancing a building pay the 3.5% tier.
According to Dominick Prevete's analysis of SBA 7(a) loan-level data (data as of June 30, 2026), the median real-estate-term 7(a) loan (a 7(a) loan with a term of 20 years or more) was $1,200,000 in New Jersey, $1,305,000 in Florida and $1,245,000 nationally, over the 12 months to June 30, 2026. Here's what the FY2027 fee comes to at each median:
FY2027 SBA 7(a) upfront fee at the median real-estate-term loan size, 12 months to June 30, 2026 (fee schedule as of October 2026)
| Market | Median loan | Guaranteed portion (75%) | Upfront fee (3.5%) |
|---|---|---|---|
| New Jersey | $1,200,000 | $900,000 | $31,500 |
| Florida | $1,305,000 | $978,750 | $34,256 |
| United States | $1,245,000 | $933,750 | $32,681 |
All three medians land just under the point where the 3.75% tier kicks in. That happens when the guaranteed portion passes $1,000,000, which is a loan above about $1,333,333. So for the typical owner-occupied building loan, the fee is about 2.6% of the loan amount.
Where are the cliffs in the SBA 7(a) fee schedule?
The FY2027 SBA 7(a) fee schedule has two cliffs. At each one, a dollar more of loan moves the whole guaranteed portion into a higher tier. Both examples are hypothetical (fee schedule as of October 2026):
- $150,000 vs. $150,001. At $150,000 the guaranty is 85% and the fee is 2%: $2,550. At $150,001 the guaranty drops to 75% but the fee rises to 3% on all of it: $3,375. One more dollar of loan costs $825 more in fees.
- $700,000 vs. $700,001. At $700,000 the fee is 3% of $525,000: $15,750. At $700,001 it's 3.5% of $525,001: $18,375. That's $2,625 more. For a business that qualifies for the FY2027 waiver, the jump is bigger. $700,000 costs $0 in upfront fees, and $700,001 costs $18,375.
None of this means an owner should borrow less than the building needs. It means that when a request lands just over a line, it's worth asking whether a slightly smaller loan (with a bit more equity) gets the job done. Dominick Prevete flags those cases when he sizes an SBA 7(a) file, and the lender makes the final call on the loan amount.
Who pays no SBA upfront guaranty fee in FY2027?
For FY2027, the SBA 7(a) upfront guaranty fee is waived (0%) on loans of $700,000 or less to three groups, under SBA Information Notice 5000-881797 (as of October 2026):
- Manufacturers, meaning businesses classified in NAICS sectors 31–33. NAICS is the federal industry code on your tax and registration records.
- Certain food supply-chain businesses, limited to the specific NAICS codes the notice lists.
- Businesses located in rural areas.
What the waiver is worth (hypothetical, as of October 2026):
Dollar value of the FY2027 SBA 7(a) fee waiver
| Loan amount | Guaranteed portion | Fee without the waiver | Fee with the waiver | Savings |
|---|---|---|---|---|
| $500,000 | $375,000 | $11,250 | $0 | $11,250 |
| $700,000 | $525,000 | $15,750 | $0 | $15,750 |
Your lender confirms eligibility against your NAICS code and your business location during underwriting.
How does the SBA 90-day rule change the guaranty fee on a second loan?
Under the SBA 90-day rule, 7(a) loans to the same borrower and its affiliates that are approved within 90 days of each other are treated as one loan for the guaranty percentage and the upfront fee. An affiliate is a company under common ownership or control with the borrower. The rule covers 7(a) loans with maturities over 12 months. Working capital lines under SBA's WCP and EWCP programs follow their own fee rules, according to SBA Information Notice 5000-881797 (as of October 2026).
A hypothetical example: an owner's business is approved for a $600,000 7(a) loan, and a related company is approved for a $400,000 7(a) loan within 90 days of the first approval.
SBA 90-day rule, hypothetical $600,000 + $400,000 loans (FY2027 fees, as of October 2026)
| Loan amount | Guaranteed portion | Upfront fee | |
|---|---|---|---|
| Priced separately | $600,000 + $400,000 | $450,000 + $300,000 | $13,500 + $9,000 = $22,500 |
| Combined under the 90-day rule | $1,000,000 | $750,000 | $26,250 |
The guaranty is 75% either way, so the whole $3,750 difference comes from the fee tier. Combined, the loans total $1,000,000, which pushes the fee from 3% to 3.5%. Together the two loans pay $26,250 in upfront fees, not $22,500.
Two planning points follow from this. First, splitting one project into two loans doesn't drop either one under the $700,000 waiver cap if both are approved within 90 days. Second, an owner planning two buildings should map out the timing before the first application goes in. Dominick Prevete builds that sequencing into the plan when an owner has more than one location in view.
Does the borrower pay the SBA annual service fee?
No. The SBA 7(a) annual service fee is a lender cost. Under SBA Information Notice 5000-881797, it's charged on the guaranteed portion of the outstanding balance, and it can't be passed to the borrower (as of October 2026). The upfront guaranty fee is the SBA fee that shows up in a borrower's closing costs. The annual service fee shouldn't appear anywhere in your loan documents as a borrower charge.
When does the SBA 7(a) fee schedule change?
SBA resets 7(a) fees every October 1, at the start of the federal fiscal year. The FY2027 schedule above applies to loans approved October 1, 2026 through September 30, 2027 (as of October 2026). The schedule that applies is set by the approval date, not the closing date. A loan approved in September and closed in November keeps the schedule in effect at approval.
That matters most for owners working against a deadline, like a bridge loan coming due. If that's you, see Your Bridge Loan Is Maturing. Here's the SBA Takeout. for the timeline. SBA published the FY2027 schedule on September 3, 2026, four weeks before it took effect.
FAQ
How much is the SBA 7(a) guaranty fee on a $1 million loan in FY2027? On a $1,000,000 SBA 7(a) loan approved between October 1, 2026 and September 30, 2027, the guaranteed portion is $750,000 (75%), and the upfront fee is 3.5% of that, or $26,250 (as of October 2026).
Is the SBA guaranty fee charged on the full loan amount? No. The SBA 7(a) upfront guaranty fee is charged on the guaranteed portion: 85% of loans of $150,000 or less, 75% of larger loans. The loan amount only decides which tier applies (as of October 2026).
Which businesses qualify for a 0% SBA 7(a) fee in FY2027? For loans of $700,000 or less, the FY2027 upfront fee is waived for manufacturers (NAICS 31–33), certain food supply-chain businesses, and businesses in rural areas, under SBA Information Notice 5000-881797 (as of October 2026).
Can I split one SBA loan into two to lower the fee? Not if both loans are approved within 90 days. SBA combines 7(a) loans to the same borrower and its affiliates approved within 90 days for both the guaranty percentage and the upfront fee (as of October 2026).
Do I pay the SBA annual service fee? No. The SBA 7(a) annual service fee is paid by the lender and can't be charged to the borrower (as of October 2026).
Does the FY2027 fee apply if my loan was approved in September 2026? No. The fee schedule is set by the loan's approval date. A 7(a) loan approved before October 1, 2026 uses the FY2026 schedule, even if it closes after October 1.
Talk to Dominick Prevete about an SBA 7(a) loan for your building. Dominick Prevete of Blue Sky Capital Advisors packages SBA 7(a) files for owner-occupied commercial real estate and places them with lenders active in your market. See how SBA 7(a) financing works for your building →
Blue Sky Capital Advisors arranges financing through third-party lenders and is not a lender. SBA loans are subject to lender approval, SBA eligibility requirements, and current program rules, which change periodically. Information is general and not a commitment to lend. Blue Sky is not affiliated with or endorsed by the U.S. Small Business Administration.