[abfunders]

Are we allowed to charge fees?
Take a look at the email I got from SmartBiz last week:
https://share.streak.com/4JuzJyTxOk8cPug3mZYBGM

[WestCoastFunding]

Are we allowed to charge fees?
Take a look at the email I got from SmartBiz last week:
https://share.streak.com/4JuzJyTxOk8cPug3mZYBGM

3. PERMISSIBLE FEES THAT A LENDER OR AGENT MAY COLLECT FROM AN APPLICANT OR BORROWER IN CONNECTION WITH AN SBA-GUARANTEED LOAN
SECTION 120.221 FEES AND EXPENSES THAT THE LENDER MAY COLLECT FROM AN APPLICANT OR BORROWER
SBA proposed revisions to paragraphs (a) and (b) of this section. SBA proposed to amend § 120.221(a) to limit the total fees an Applicant can be charged by a Lender for assistance with obtaining an SBA-guaranteed loan. Regardless of what the fee is called (e.g., a packaging fee, application fee, etc.), the Lender would be permitted to collect a fee from the Applicant of no more than $2,500 for a loan up to and including $350,000, and no more than $5,000 for a loan over $350,000. With the exception of necessary out-of-pocket costs, such as filing or recording fees permitted in § 120.221(c) and legal fees that are charged on an hourly basis permitted in § 120.221(e), this is the only fee that a Lender may collect directly or indirectly from an Applicant for assistance with obtaining an SBA-guaranteed loan.

SBA recognizes that some Lenders may need to revise their policies, procedures or documentation in order to comply with the new limits on fees in § 120.221(a). In order to minimize the impact of the change on affected Lenders, SBA is not requiring compliance with revised § 120.221(a) until October 1, 2020. Until that time, Lenders are to continue to comply with the requirements in § 120.221(a) as published in the 2019 edition of the Code of Federal Regulations, and the guidance in SOP 50 10 5(K). However, considering the benefits that the new fee limits offer, SBA expects that many Lenders will want to comply with them before October 1, 2020. They are permitted to do so. SBA recommends that these Lenders document in each loan file their decision to use the new fee limits.

[WestCoastFunding]

Seems to me the lender will be capped at those amount to collect a fee, but I don’t see any reason you as a broker can’t have your own fee agreement in place. Just seems that on the backend you’d be at the mercy of the lender. With guys like Wells Fargo, you probably won’t be able to have them disperse however many points you agreed to with the borrower at closing docs. You’d have to have the borrower send you the fee directly. Other lenders would have to pay you the referral fee directly, rather than having the lender charge the borrower your 1-2% which is then given to you.

So, to me it’s reasonable to collect a $2500 upfront or at term sheet, and then collect a fee direcrly from the lender, or have a separate agreement in place with the borrower that calls for a success fee after closing — which the borrower would have to wire to you. Hopefully they honor it.

Regardless, this isn’t totally in effect until OCT.