Business loans · Fees
Business Loan Fees Explained: Origination, Draw, Prepayment, SBA Guarantee and the Fees Hidden in Factor Rates
The interest rate is the number lenders advertise; the fees are where the same rate becomes two different loans. An origination fee of 4.49% to 10.49% on an online term loan, a 2.5% fee on every draw of a line, a prepayment clause that charges all remaining interest, or a $2,000 “underwriting” charge on a cash advance can move the true cost by five to fifteen points of APR. This guide lists every fee you will see on business financing in October 2026, what is typical, what is negotiable, and how to read a fee into the total cost before you sign.
What Fees Do Business Loans Charge?
The common business loan fees in 2026 are: origination fees of 1% to 5% at banks and online term lenders and 4.49% to 10.49% at some online lenders; draw fees of 1.5% to 3% per draw on online lines of credit; annual or maintenance fees of $0 to $250 on bank lines; SBA guarantee fees of 0% to 3.75% of the guaranteed portion depending on loan size and the fiscal-year schedule, plus packaging fees of $2,000 to $4,000 at some lenders; prepayment penalties on fixed-rate and SBA loans (SBA 7(a) charges 5%, 3%, 1% in years one to three on loans over 15 years); late fees of 5% of the payment or $25 to $50; NSF fees of $25 to $35 per returned payment; and, on revenue-based financing and merchant cash advances, origination, underwriting or “platform” fees of 1% to 5% deducted from the funded amount on top of the factor rate. Appraisal, filing (UCC), monitoring and lockbox fees apply to secured and asset-based facilities. Every fee should appear in the written offer; ten states now require a total-cost disclosure on commercial financing of $500,000 or less.
Business Loan Fees by Product, October 2026
| Fee | Bank loan or line | SBA 7(a) | Online term loan | Online line of credit | Revenue-based / MCA | Equipment financing |
|---|---|---|---|---|---|---|
| Origination | 0% – 2% | 0% – 3% (packaging $2K – $4K at some lenders) | 1% – 5% typical; 4.49% – 10.49% at some | Usually none | 1% – 5% “origination” or “underwriting” | 0% – 3% or $150 – $500 doc fee |
| Draw fee | None | None | n/a | 1.5% – 3% per draw | n/a | n/a |
| Annual or maintenance | $0 – $250 | None | None | $0 – $100/month at some | None | None |
| Guarantee fee | None | 0% – 3.75% of guaranteed portion | None | None | None | None |
| Prepayment | Rarely; some fixed loans | 5%/3%/1% yrs 1 – 3 on 15+ yr terms | Varies: waived to full remaining interest | None (fees already paid per draw) | Full payback owed; discounts only if written in | Often; 1% – 3% or remaining interest |
| Late fee | 5% or $25 – $50 | 5% or $25 – $50 | 5% or $25 – $50 | $25 – $50 | $25 – $100 per missed ACH | 5% or $25 – $50 |
| NSF / returned payment | $25 – $35 | $25 – $35 | $25 – $35 | $25 – $35 | $25 – $35 per return | $25 – $35 |
| Collateral-related | Appraisal $500 – $3,000; UCC $25 – $100 | Appraisal, environmental, UCC | UCC $25 – $100 | UCC $25 – $100 | UCC $25 – $100 | Title, UCC, inspection $100 – $500 |
Typical ranges from lender disclosures and offers seen by RAN Funding in 2026. SBA fee schedules change each fiscal year (October 1); confirm the current schedule with the lender.
What Fees Do to the True Cost
| $100,000 online term loan, 12 months, 18% interest | Fees | Cash you receive | Total cost | APR equivalent |
|---|---|---|---|---|
| No origination fee | $0 | $100,000 | $10,000 | ~18% |
| 3% origination | $3,000 | $97,000 | $13,000 | ~24% |
| 7.5% origination | $7,500 | $92,500 | $17,500 | ~33% |
| 7.5% origination plus full-interest prepayment, paid off at month 6 | $7,500 | $92,500 | $17,500 for 6 months of use | ~60%+ |
APR equivalent of the same 18% loan, by fee structure
Fees deducted from the funded amount raise the true rate most on short terms and early payoffs.
Convert any offer, fees included, in the factor rate calculator and the business loan payment calculator.
SBA Fees in Detail
- Guarantee fee: charged on the guaranteed portion (75% to 85% of the loan), on a schedule the SBA sets each fiscal year beginning October 1; it has ranged from 0% on small loans to 3.75% on the portion of large loans above $1 million. Lenders may pass it through at closing or finance it into the loan.
- Packaging fee: $2,000 to $4,000 at some lenders for assembling the application; capped by SBA rules and must be reasonable.
- Prepayment: on 7(a) loans with terms of 15 years or more, 5% in year one, 3% in year two, 1% in year three if you prepay 25% or more of the balance; none on shorter terms.
- Third-party costs: appraisal, environmental review, title and UCC filings on real estate and equipment loans.
- Not allowed: broker fees charged to you that are not disclosed on SBA Form 159; any lender or agent fee must be disclosed.
Current schedules are in SBA loan fees.
Which Fees Are Negotiable
| Fee | Negotiable? | How |
|---|---|---|
| Origination | Often | Compare offers; ask for a reduction in exchange for autopay or a deposit relationship |
| Draw fee | Sometimes | Larger lines and stronger files get 1.5% instead of 2.5% – 3% |
| Prepayment | Often | Ask for a waiver or a discount schedule in writing before signing |
| Annual fee | Often | Waived for deposit customers at most banks |
| Packaging (SBA) | Sometimes | Lenders compete on it; some charge none |
| Guarantee fee (SBA) | No | Set by the SBA |
| Late and NSF | No | Avoid them with autopay and a buffer |
| Broker fee | Yes | Ask how the broker is compensated and get it in writing |
Share of applicants fully approved, by product (Federal Reserve, 2026)
81% of applicants were approved for at least part of the request. Source: Federal Reserve Banks, 2026 Report on Employer Firms.
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Common Questions
What is a typical origination fee on a business loan?
About 0% to 2% at banks, 0% to 3% on SBA loans (plus a packaging fee at some lenders), 1% to 5% at most online term lenders and 4.49% to 10.49% at some. Online lines of credit usually charge per draw (1.5% to 3%) instead of an origination fee.
Do business loans have prepayment penalties?
Some. SBA 7(a) loans with terms of 15 years or more charge 5%, 3% and 1% in years one to three; some fixed-rate bank and equipment loans charge 1% to 3% or remaining interest; many online term lenders either waive remaining interest or charge all of it, so ask. Factor-rate products owe the full payback regardless unless a discount is written in.
Are business loan fees tax deductible?
Generally yes. Interest and most loan fees are deductible business expenses; origination fees are typically deducted over the life of the loan rather than all at once. Confirm treatment with your accountant.
What is the SBA guarantee fee in 2026?
The SBA sets the guarantee fee schedule each fiscal year beginning October 1, charged on the guaranteed portion of the loan and ranging from 0% on the smallest loans to 3.75% on the portion of large loans above $1 million. Your lender will quote the current schedule for your loan size.
How are fees shown on RAN Funding offers?
Any fee a lender charges appears in that lender’s written offer, and every offer RAN Funding presents shows the total payback before you accept.
Is RAN Funding a lender?
No. RAN Funding is a business financing broker. We present your application to our lender network and show you the offers you qualify for; the funding partner sets the approval, amount, rate, fees and terms.
Sources
- SBA 7(a) fees and prepayment terms — U.S. Small Business Administration
- 2026 Report on Employer Firms: Findings from the 2025 Small Business Credit Survey — Federal Reserve Banks
- H.15 Selected Interest Rates (bank prime loan rate 7.00%) — Board of Governors of the Federal Reserve System
- Commercial financing disclosure laws by state — RAN Funding
See What You Qualify For
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