SBA 504 Debenture Pricing
SBA 504 Loan fees are financed as part of the debenture. The fees are calculated as a percentage based on the SBA portion of the project (the net debenture amount). The fees are described as follows
Servicing fees are included in the effective interest rate and reflected in the monthly payment amount. These servicing fees are distributed to three entities: SBA (0.368%), TCM (0.625%) and the CSA (0.1%). At inception, these servicing fees are based on the total loan amount (gross debenture); the fees are then reduced at each five-year interval, at which time they are based on the new outstanding loan balance.
Lender Participation Fee
A one-time fee is paid by the Participating Lender. This fee is equal to one-half percent (0.5%) of the principal amount of the senior mortgage and/or lien associated with the 504 Loan.
Borrower shall pay all expenses and closing costs including but not limited to recording costs, filing fees, title insurance premiums, hazard insurance premiums, and flood insurance premiums (if applicable) which are required by the Authorization For Debenture Guarantee, as well as attorney fees incurred, if borrower elects to obtain legal representation.
The Borrower may repay the entire outstanding loan balance prior to the maturity date, but may not make partial prepayments. If the Borrower prepays during the first half of the term, there will be a prepayment premium. This premium is equivalent to one year’s interest in the first year of the loan term, declining to zero at the midpoint of the loan term. A Schedule of the precise dollar amounts of the premium for each loan is provided after the sale of the debenture.