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  • Ray Chiamulera

2022 Fee Income

So you weren’t an active SBA lender before PPP, but now your Board Members have gotten used to significant fee income from the program over the last two years. PPP looks to be over, but you can still generate fee income by selling the guaranteed portion of new SBA 7a loans. There is a secondary market for the guaranteed portion of these loans. The premiums for fully priced 10 year loans vary based on loan amount and pricing. Premiums are, in part, impacted by the ongoing SBA servicing fee. Loans of $350,000 or less approved between now and the end of the SBA’s fiscal year, 9/30/22, have no on-going guaranty fees. Loans above $350,000 up to $1,000,000 have an ongoing guaranty fee of 0.49% and loans above $1,000,000 have an ongoing guaranty fee of 0.55% for that same period. Loan sale premiums on fully priced (P+2.75 variable) loans with a term of 10 years with no ongoing servicing fee charged by the SBA are currently at around a 14%. Premiums for fully priced 10 year loans with an on-going servicing fee of 0.49% and 0.55% are around 12% premiums. Loan sale premiums on fully priced loans with a term of 25 years with no ongoing guaranty fee charged by the SBA are currently at around a 19%. Premiums for fully priced 25 year loans with an on-going servicing fee of 0.49% and 0.55% are between 16% and 17%. The SBA shares in the amount of any premium above 10% meaning if a loan sold at a 14% premium the lender would receive 12% and the SBA 2%. Just food for thought for some of you who do not currently sell loans.

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