News Alerts from

March 5, 2020


Effective March 11, 2020, the Small Business Administration (SBA) enacted a significant change in the way guaranteed loan fees are charged by lenders to their borrowers. Previously, Holtmeyer & Monson (H&M) operated under the “Two Master Rule,” whereby we charged a comprehensive borrower fee for services rendered to the borrower, and one comprehensive lender fee for services rendered to the lender. The upcoming SBA change eliminates this arrangement. As your Lender Service Provider, we can no longer charge any fees to the borrower; we can only charge one comprehensive fee to the lender.

With this change in effect, your institution, as the lender, is now allowed to charge the borrower an origination fee or application fee. The SBA has established ceilings for the borrower fees that lenders may charge, as follows:

  • Maximum fee of $3,000 for loan up to $350,000
  • Maximum fee of $5,000 for loan of $350,001 and greater

What do these changes mean for your institution? The answer is – not much. The lender will need to disclose the borrower fee on SBA Form 159. However, the SBA’s loan application, closing and servicing processes will not change. Holtmeyer & Monson will deliver the same high level of services to successfully originate, close and service your SBA loans.

In summary, H&M can no longer charge the borrower. The lender is now allowed to charge an origination fee subject to the maximum amount allowed by the SBA. We here at Holtmeyer & Monson appreciate your attention to this critical matter, and we will keep you advised of additional changes or developments. Please contact your H&M Account Executive with any questions or clarifications.

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