The FY 2027 fee schedules take effect October 1, 2026, and a separate policy already lets eligible borrowers combine 7(a) and 504 financing. What each change does — and what it does not do.
Planning an acquisition, a building purchase, new equipment or working capital? Two questions decide most of the cost: how much financing the business can qualify for, and which fees apply. Recent SBA news moves both.
New fee schedules take effect this October, and a separate policy already in force lets eligible businesses combine financing across the SBA's two major lending programs. The distinction between those two changes matters, because one of them is routinely misreported.
The FY 2027 fee schedules for the 7(a) and 504 programs take effect October 1, 2026, and qualifying manufacturers, specified food-supply-chain businesses and rural businesses may receive fee relief. Separately, since July 4, 2026, eligible businesses can combine up to $5 million of 7(a) financing with up to $5 million of 504 financing. That is not a single $10 million SBA 7(a) loan — the individual 7(a) maximum remains $5 million.
| Update | Effective date | Who it affects | What it means |
|---|---|---|---|
| FY 2027 7(a) fee schedule | October 1, 2026 | 7(a) borrowers and lenders | New upfront guaranty fee tiers; 0% upfront fee for qualifying loans of $700,000 or less in certain categories. |
| FY 2027 504 fee schedule | October 1, 2026 | 504 borrowers and CDCs | Upfront guaranty fee and annual service fee waived for qualifying categories; 0.50% and 0.203% otherwise. |
| Combined 7(a) + 504 financing | July 4, 2026 (already in force) | Eligible borrowers needing both working capital and fixed assets | Up to $5M under each program, subject to each program's rules. Not a single $10M 7(a) loan. |
| 7(a) maximum loan amount | Unchanged | All 7(a) applicants | The individual 7(a) maximum remains $5 million. |
Two separate things changed, on two separate timelines, and conflating them produces bad budgeting.
The U.S. Small Business Administration published its fiscal year 2027 fee notices for the 7(a) and 504 programs on September 3, 2026. Both schedules become effective October 1, 2026. As of this article's update date, these are upcoming schedules — not the fees already in effect.
Separately, a policy effective July 4, 2026 already allows eligible borrowers to combine 7(a) and 504 financing up to $5 million under each program. That one is in force now.
The FY 2027 notice provides a 0% upfront guaranty fee on qualifying loans of $700,000 or less for manufacturers, specified food-supply-chain businesses, and businesses in rural areas. Specialized working-capital products and certain SBA Express loans have separate provisions.
For ordinary, non-exempt loans with repayment terms longer than 12 months, the schedule is as follows.
| Gross loan amount | SBA upfront guaranty fee |
|---|---|
| Up to $150,000 | 2% of the guaranteed portion |
| $150,001 – $700,000 | 3% of the guaranteed portion |
| $700,001 – $5 million | 3.5% of the first $1 million of the guaranteed portion, plus 3.75% above that amount |
Three categories are identified for the 0% upfront guaranty fee on qualifying loans of $700,000 or less: manufacturers, specified food-supply-chain businesses, and businesses located in rural areas.
Qualifying is a determination about the business and the transaction, not a box the borrower ticks. Ask the lender to confirm the classification in writing before the fee saving is built into a budget, and do not reshape a closing timeline around a waiver without comparing the total cost either way.
The fee tier depends on the full loan amount, but the fee is calculated on the SBA-guaranteed portion — not the whole loan. Those are different numbers, and the difference grows with loan size.
A separate 0.55% annual lender service fee cannot be passed to the borrower. These are program fees, not interest rates, and not a complete closing-cost estimate. Ask for an itemized quote rather than treating a waived fee as a cost-free loan.
The FY 2027 504 notice waives the upfront guaranty fee and the annual service fee for qualifying manufacturers, specified food-supply-chain businesses, and businesses located in rural areas. The notice also includes qualifying refinancing transactions within this relief.
| Transaction | Upfront guaranty fee | Annual service fee |
|---|---|---|
| Qualifying manufacturers, specified food-supply-chain businesses, rural businesses (including qualifying refinancing) | Waived | Waived |
| Other standard 504 loans | 0.50% | 0.203% of the outstanding loan balance |
| Non-exempt refinancing without expansion | 0.50% | 0.204% of the outstanding loan balance |
The same three categories carry through: manufacturers, specified food-supply-chain businesses, and rural businesses. The 504 notice extends the relief to qualifying refinancing transactions as well, which is the meaningful difference from the 7(a) treatment.
Before building these figures into a budget, ask your Certified Development Company (CDC) to confirm the transaction's classification and provide a full cost breakdown.
The 504 annual service fee is charged on the outstanding balance, so it declines as the debenture amortises. The upfront guaranty fee is a one-time charge at the front of the transaction.
Because a 504 project is financed through more than one piece — a third-party lender loan alongside the CDC debenture — the SBA fee is only one line in the total cost. The third-party lender's own fees and rate sit outside the SBA schedule entirely.
An eligible business may be able to reach $10 million in combination, but not through a single 7(a) loan.
Under a policy effective July 4, 2026, eligible borrowers can obtain up to $5 million through the 7(a) program and $5 million through the 504 program, creating a combined financing opportunity of up to $10 million.
The sequence matters. The policy describes approving the 7(a) loan first, followed by the 504 transaction. It also preserves program-specific limits and the rules concerning affiliated businesses.
Certain manufacturing and eligible energy projects have separate 504 provisions, so the headline figure is not a universal ceiling for every financing structure.
For example, an eligible business could explore 7(a) financing for working capital alongside a 504 transaction for its facility. The policy explicitly recognises this type of combination. Your lender and CDC should confirm the structure before you make commitments based on the maximum advertised amount.
Start with what the money has to accomplish, not with which program sounds cheaper.
| SBA 7(a) | SBA 504 | |
|---|---|---|
| Permitted uses | Broader: working capital, equipment, real estate, eligible debt refinancing, complete or partial changes of ownership | Major fixed assets: buildings, land improvements, qualifying long-term machinery and equipment |
| Working capital / inventory | Eligible | Not eligible |
| How you apply | Through participating lenders, not directly to SBA | Through a Certified Development Company within the 504 structure |
| Individual maximum | $5 million | Subject to program rules; separate provisions for certain manufacturing and energy projects |
A business purchasing premises while also funding day-to-day operations should discuss each need separately rather than assume one loan covers everything.
SBA 7(a) financing offers the broader set of permitted uses: working capital, equipment, real estate, eligible debt refinancing, and complete or partial changes of ownership. Applications are made through participating lenders rather than directly to the SBA.
That breadth is why 7(a) is the usual route for a business acquisition where the buyer also needs operating cash on day one.
SBA 504 financing focuses on major fixed assets: buildings, land improvements, and qualifying long-term machinery and equipment. It cannot be used for working capital or inventory.
Businesses access the program through CDCs working within the 504 financing structure. For how a CDC and its lender read a projection-based file, see our note on what CDCs and lenders require in a 504 feasibility study.
The individual 7(a) maximum remains $5 million. The combined-financing policy does not raise that ceiling; it allows a second, separately governed 504 transaction alongside it.
Program-specific limits and the affiliation rules continue to apply, which means existing SBA borrowings elsewhere in a group of related businesses can reduce what is actually available for a new request.
Guarantee fees are not interest. They are a separate government charge, and quoting them as though they were part of the rate produces a misleading comparison.
SBA loan pricing is negotiated within program parameters and varies by lender, structure and term, so there is no single published “SBA rate” that applies to every borrower. Ask the lender for the rate, the index and adjustment frequency where variable, and the fees, as three separate figures.
The guarantee fee is the headline number, but it is rarely the whole cost of getting to closing. Depending on the transaction, a borrower should expect to account for third-party reports, closing and packaging charges, and the lender's own fees.
Request an itemized estimate showing interest, applicable guaranty fees, other charges, and the cash required at closing. Compare that against the business's expected cash flow — not just against the headline loan amount.
Use the first financing conversation to settle three things.
Ask the lender to review business activity, ownership structure, existing borrowing and repayment capacity. Access to a higher financing ceiling does not replace the programs' eligibility and credit requirements.
Get the itemized estimate described above, in writing, before committing to a structure.
Ask which fiscal-year fee schedule would apply and whether any exemption is available. The FY 2027 notices apply to loans approved from October 1, 2026 through September 30, 2027. Have the lender compare the applicable costs before changing a timeline simply to chase a waiver.
Cost is only one side of the decision. Whether a projection survives underwriting also depends on the conditions the project is being built into — growth, prices, construction costs and demand. See what the 2026 economic data mean for project projections.
What changed with SBA loans in 2026?
FY 2027 fee schedules for the 7(a) and 504 programs were published September 3, 2026 and take effect October 1, 2026. Separately, a policy effective July 4, 2026 allows eligible borrowers to combine 7(a) and 504 financing.
Can I get a single $10 million SBA 7(a) loan?
No. The individual 7(a) maximum remains $5 million. The $10 million figure concerns eligible borrowers combining 7(a) and 504 financing, subject to each program's rules.
What is the SBA 7(a) maximum loan amount?
$5 million, subject to SBA rules and the affiliation provisions.
When do the FY 2027 SBA fees take effect?
October 1, 2026. They apply to loans approved through September 30, 2027. They were not in effect as of September 6, 2026.
Who may qualify for SBA 7(a) fee relief?
The FY 2027 notice provides a 0% upfront guaranty fee on qualifying loans of $700,000 or less for manufacturers, specified food-supply-chain businesses, and businesses in rural areas.
Are SBA 504 fees being waived?
For qualifying manufacturers, specified food-supply-chain businesses and rural businesses, the FY 2027 504 notice waives both the upfront guaranty fee and the annual service fee, including for qualifying refinancing. Other standard 504 loans carry a 0.50% upfront fee and a 0.203% annual service fee.
Can SBA 7(a) and SBA 504 loans be combined?
Yes, for eligible borrowers under the policy effective July 4, 2026, with the 7(a) loan approved first and program-specific limits and affiliation rules preserved.
What is the difference between SBA 7(a) and 504?
7(a) permits broader uses including working capital and changes of ownership. 504 is for major fixed assets and cannot fund working capital or inventory.
Are SBA guarantee fees the same as interest?
No. A guarantee fee is a separate government charge, not a component of the interest rate.
Which SBA loan is best for real estate?
504 is structured for major fixed assets including buildings and land improvements, though 7(a) also permits real estate. The right answer depends on the whole financing need, not the asset alone.
Which SBA loan can fund working capital?
7(a). The 504 program cannot be used for working capital or inventory.
Does qualifying for a fee waiver guarantee loan approval?
No. A fee waiver concerns a particular borrowing charge. The business must still satisfy the relevant eligibility requirements and demonstrate ability to repay.
Primary sources for this article
How we verified this article. Program details were checked against official U.S. Small Business Administration program pages, the FY 2027 SBA fee notices, and applicable SBA policy notices current as of the date shown above. Fiscal-year fees and program rules can change, so borrowers should confirm transaction-specific requirements with their lender or CDC.
This article provides general information, not individualized financial or legal advice. Confirm current requirements and transaction-specific terms with your lender or CDC.
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