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This Form 1244 incorporates 504 Debt Refinancing updates made in the Economic Aid Act and is used to review the Applicant's eligibility for a 504 loan.
The Small Business Administration is waiving fees on certain government-guarantee loans through September 2022. The stimulus funds providing fee relief for certain Small Business Administration-backed loans just ran out at noon on Wednesday, a day before the program was due to sunset on September 30, 2021.
The SBA guarantee fee is 3.5% of $750,000, or $26,250. For a $5 million loan, the SBA will guarantee 75% of the loan, or $3.75 million. The guarantee fee is 3.5% of the first $1 million that is guaranteed, plus 3.75% of the remaining $2.75 million that is guaranteed. That brings the total SBA guarantee fee to $138,125.
A guarantee fee is a sum paid to the issuer of a mortgage-backed security. These fees help the issuer pay for administrative costs and other expenses and also reduce the risk and potential for loss in the event of default of the underlying mortgages. G-fees are also charged by other guarantors for services rendered.
A: Yes. Again, because bonds are sold on the open market to fund the SBA 504 loans, there is a 10-year prepayment penalty associated with all 504 loans with a 20-year or a 25-year term and a 5-year prepayment penalty associated with all 504 loans with a 10-year term. Both are non-negotiable.
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A 504 loan requires no collateral other than the property acquired, but conventional lenders\u2014banks or finance companies\u2014may ask for property in addition to what you are purchasing with the loan in order to secure it, such as your personal residence.
The act eliminates the 0.5% Third Party Lender Participation Fee on loans in senior lien positions in 504 projects and the 1.5% Certified Development Company (CDC) Processing Fee in debenture pricing for all loans approved from the date of enactment of the act (Dec. 27, 2020) and ending on Sept. 30, 2021.
The length of time required for an SBA 504 loan to be approved can vary drastically, but averages between 60 and 90 days. With that being said, it may take up to six months in some situations.

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