The Small Business Administration (SBA) Fee Disclosure Form and Compensation Agreement is a vital document that outlines the fees and compensation structure that an SBA lender will receive for providing financial assistance and services to a small business. This form is designed to provide transparency and clarity on the costs and charges involved in securing SBA loans.
The fee disclosure form is usually included with the loan application package and should be reviewed carefully by businesses before signing it. It is important to understand what fees and charges are associated with the loan and how they will affect your business`s finances.
The SBA`s fee structure is designed to help cover the costs of administering the loan program, which include processing applications, underwriting, closing, and servicing the loan. The fees vary depending on the size of the loan and the type of SBA loan program. The most common fees include the SBA guarantee fee, which is a percentage of the loan amount, and the lender`s fees, which can include origination fees, servicing fees, and closing costs.
The compensation agreement outlines the commission or compensation that the lender will receive for providing financial assistance to the small business. This agreement is a legal document that specifies the compensation structure, how it will be paid, and any conditions that must be met before payment is made.
The SBA lender`s compensation is usually a percentage of the loan amount or a flat fee, depending on the size of the loan and the lender`s policies. It is important to understand how the compensation agreement works, as it can impact the total cost of the loan and the borrower`s ability to repay it.
In conclusion, the SBA Fee Disclosure Form and Compensation Agreement is an essential document for small businesses seeking financial assistance through an SBA loan program. It provides transparency and clarity on the fees and charges associated with the loan and outlines the compensation structure for the lender. As a business owner or manager, it is crucial to review and understand this document thoroughly to ensure that you are making an informed decision about your organization`s financial future.