SBA Broker and Agent Fee Rules: What Agents Can Charge, Fee Caps, Form 159, and What’s Prohibited

SBA Broker and Agent Fee Rules: What Agents Can Charge, Fee Caps, Form 159, and What’s Prohibited

If you’re using a broker, packager, or any other agent to help you get an SBA loan, you need to understand the fee rules — because the SBA regulates them aggressively. Agents who violate these rules face suspension or revocation of their privilege to do business with SBA. Borrowers who don’t understand them get overcharged.

Here’s the complete breakdown from SOP 50 10 8, effective June 1, 2025.

Who Qualifies as an “Agent” Under SBA Rules?

SBA defines an “Agent” broadly under 13 CFR § 103.1(a). An Agent is any authorized representative conducting business with SBA on behalf of an applicant or lender, including:

• Attorneys
• Accountants
• Consultants
• Packagers — agents who prepare the applicant’s application
• Referral Agents — agents who connect borrowers with lenders or vice versa
• Lender Service Providers (LSPs) — agents who carry out lender functions for compensation
• Any other individual or entity representing an applicant or participant

If someone is helping you with your SBA loan and getting paid for it, they’re probably an Agent under SBA rules — and the fee restrictions apply.

What Agents Can Charge: The Fee Structure

Types of Allowable Services

An Agent may charge an applicant for:

1. Packaging services — completing applications, preparing business plans, cash flow projections, and related documents
2. Other services — consulting on the amount and type of financing needed, broker or referral fees

The fees must be reasonable and customary for the services actually performed.

Hourly Rate Billing

Agents can bill on an hourly basis with no maximum cap — but:

• Fees must be reasonable and customary for the services actually performed
• The hourly rate and time spent on each service must be documented
• All fees over $2,500 must be supported by documenting the specific services performed

Percentage-Based Fee Caps

When agents charge based on a percentage of the loan amount, SBA imposes hard caps. If multiple services are provided, the combined fee for all services cannot exceed:

Absolute maximum: The total fee charged on a percentage basis cannot exceed $30,000 in the aggregate, regardless of loan size.

Fee Cap Example

On a $2,000,000 SBA loan:

• First $1,000,000: 2% = $20,000
• Next $1,000,000: 0.25% = $2,500
• Total: $22,500

On a $5,000,000 SBA loan:

• First $1,000,000: 2% = $20,000
• Next $4,000,000: 0.25% = $10,000
• Total would be $30,000 — which hits the cap exactly

What Agents CANNOT Charge: The Prohibitions

SBA explicitly prohibits three types of agent fees:

1. No Flat Fees

An Agent cannot charge a standard or flat fee charged to all applicants. Each fee must be tied to actual services performed for that specific applicant. A “one-size-fits-all” pricing model violates SBA rules.

2. No Contingency Fees

Agents cannot charge fees that are contingent on the loan being approved or closed. This is one of the most commonly violated rules in SBA lending. If your broker says “you only pay if the loan closes” — that’s a contingency fee, and it’s prohibited.

Note: This prohibition applies to packaging and application-related services. The compensation for services through loan closing cannot be contingent upon SBA approval or closing.

3. No Unnecessary Service Charges

Agents cannot charge for services that are not reasonably necessary in connection with the application. Padding the bill with unnecessary “reviews” or “consultations” won’t fly.

SBA Form 159: The Mandatory Fee Disclosure

Section 13 of the Small Business Act requires every applicant to identify all agents involved and all fees paid. The vehicle for this disclosure is SBA Form 159 — the Fee Disclosure Form and Compensation Agreement.

When Form 159 Is Required

For all Agents except LSPs performing duties under an SBA-reviewed LSP Agreement:

• If an Agent is paid by the applicant or the lender, Form 159 must be completed
• Signed by the applicant, the Agent, and the lender
• Separate Forms 159 required for each Agent providing services

What Gets Reported

Lenders must identify in E-Tran:

• Whether any fees were charged and the amounts
• Whether an Agent was involved in the transaction
• Agent’s name, street address, city, state, and zip code

Documentation Requirements

If aggregate compensation for all fees from the same Agent exceeds $2,500, an itemization of compensation received and supporting documentation must be attached to Form 159.

Failure to fully complete and execute Form 159 may result in suspension or revocation of the Agent’s privilege to conduct business with SBA.

The Agent-Lender Relationship Rules

Agents Hired by the Lender

When a lender hires an Agent to help with paperwork, closing, or secondary market preparation:

• The Agent must bill and be paid by the lender
• The lender may not pass these charges through to the applicant
• These costs cannot be paid with SBA-guaranteed loan proceeds

Dual Relationships

The only situation where an Agent can receive compensation from both the lender and the applicant is when the Agent provides different services to each — specifically, packaging services to the applicant AND receiving a referral fee from the lender. Both parties must be aware of both relationships.

If an Agent is performing multiple services for the applicant (packaging + referral), the total fee for all services still cannot exceed the stated maximums.

Lender Service Provider (LSP) Special Rules

LSPs operate under a different framework:

• LSPs perform lender functions (originating, disbursing, servicing, liquidating) for compensation from the lender
• Must operate under a written LSP Agreement reviewed by SBA
• Form 159 is not required for services under an SBA-reviewed LSP Agreement
• Fees paid by the lender to the LSP cannot be passed to the applicant
• The lender and LSP cannot share Secondary Market premiums
• LSP fees related to packaging, processing, or underwriting cannot be contingent on loan approval or closing

What Happens When Fees Are Excessive

SBA can review agent fees at any time. When fees appear unreasonable:

1. Lenders must review services and fees when there’s an indication fees might be excessive or when an applicant complains
2. Unreasonable fees should be reported to the Director of the Office of Credit Risk Management (D/OCRM)
3. If SBA determines a fee is excessive, the Agent must:
   • Reduce the fee to a reasonable amount
   • Refund any excess to the applicant
   • Stop charging the excessive fee going forward

The D/OCRM can also suspend or revoke an Agent’s privilege to conduct business with SBA for “good cause” under 13 CFR § 103.4.

How to Protect Yourself as a Borrower

1. Know that agents are optional. The lender must advise you in writing that you are not required to obtain or pay for unwanted services.
2. Get a written fee agreement upfront. Know exactly what you’re paying for before services begin.
3. Verify the fee against SBA caps. Calculate the maximum percentage-based fee for your loan size.
4. Refuse contingency fee arrangements. They’re prohibited. Any agent proposing them either doesn’t know the rules or is ignoring them.
5. Demand itemization. For any fee over $2,500, the agent must document specific services performed.
6. Review Form 159 carefully. You’re signing it — make sure the fees listed match what was agreed.

Work With a Compliant SBA Loan Specialist

The fee rules exist to protect borrowers from being exploited. But too many agents in the SBA space still charge flat fees, contingency fees, or fees that exceed SBA caps. Don’t be a victim of non-compliant practices.

GoSBA Loans operates in full compliance with SBA agent and fee regulations. Our fees are transparent, documented, and within SBA guidelines — every time. Contact us today to work with a team that knows the rules and plays by them.