What fees should I expect when closing a business loan?

The fee inventory, line by line

A term sheet usually lists the lender's fees in one short paragraph and then adds a sentence that matters more: the borrower will pay all of the lender's out-of-pocket costs, whether or not the loan closes. That sentence covers most of the third-party work below. Read the fee paragraph and the expense sentence together; the term sheet is where both first appear, and the commitment letter is where they become binding.

Two items on that list are really price, not cost. An origination fee and original issue discount are both the lender taking part of its return at the start. A lender that quotes a lower spread with a larger upfront fee has not given anything away; it has moved money from the coupon to closing day.

The costs you owe even if the loan never closes

Most borrowers assume fees are a closing-day event. Many are not. Lenders ask for an expense deposit when a term sheet is signed so they can order appraisals, a field exam or searches, and start their lawyers. If the deal falls apart after that, the deposit pays for the work already done. If the work costs more than the deposit, the expense sentence in the term sheet makes you liable for the rest.

The risk is highest in acquisitions, where a deal can die for reasons that have nothing to do with the loan: the seller walks, diligence finds a problem, the price is renegotiated. A buyer who signs two term sheets to keep options open can end up paying two sets of lawyers and two appraisers. That is a reason to choose one lender early on the strength of a complete file rather than running several half-informed processes in parallel.

• Usually owed if the deal dies: expense deposits already spent, appraisal and field exam invoices, the lender's legal fees to date, a commitment fee once a commitment is signed.
• Usually owed only at closing: the origination fee, original issue discount, title insurance and recording costs, the SBA guaranty fee.
• Owed after closing: unused-line fees, annual or agency fees, periodic field exams on an asset-based line, and any cost of leaving early.

Before you sign a term sheet, ask the lender for the expense deposit amount, what it covers, and what happens to any unspent balance.

SBA loans: the guaranty fee and packaging fees

An SBA 7(a) loan adds a program cost conventional loans do not have. SBA charges the lender an upfront guaranty fee for guaranteeing part of the loan, and lenders typically pass it to the borrower. It is calculated on the guaranteed portion, which is why the guaranty levels matter: SBA guarantees 85% of 7(a) loans of $150,000 or less and 75% above that, and its guaranty to one borrower is capped at $3.75 million. The fee can generally be financed into the loan rather than paid in cash.

SBA also limits what else a 7(a) lender may charge, and it requires disclosure of anyone paid to help with the application. Packaging fees, referral fees and agent fees appear on SBA Form 159, signed by the borrower, the lender and the agent. If a packager or broker is involved in your SBA loan, you should see their compensation on that form before closing.

Third-party costs on an SBA acquisition can be larger than borrowers expect. Where the amount financed, less appraised real estate and equipment, exceeds $250,000, or buyer and seller are related, SBA requires an independent business valuation. From 1 October 2026, under SOP 50 10 8.1, financial due diligence is required on every change of ownership, and a quality of earnings report on acquisitions of $3 million or more excluding real estate. Budget for those alongside the guaranty fee, not after it.

Asset-based lines and private credit: the fees that keep running

A term loan's fees are mostly one-time. A revolving line's are not. An unused line fee is charged on the undrawn part of the commitment for as long as the line is open, so a line sized well above what you draw costs money every month. An asset-based line adds field exams, which recur on a schedule the agreement sets, and sometimes collateral monitoring fees. Those belong in the cost of the facility, not in a footnote.

Private credit and unitranche loans often combine original issue discount with an annual administration fee and call protection. The last is a fee for leaving: a prepayment premium in the early years. It costs nothing if you keep the loan to maturity and a great deal if you refinance or sell early. What private credit costs covers how those pieces fit together, and early termination fees on an ABL covers the same issue on lines.

How to compare offers on total cost

Put every offer on one sheet, over the period you actually expect to keep the loan. Add the upfront fee or discount, the third-party costs the lender requires, the running fees, and the cost of leaving at the point you expect to leave. Then spread the total over that period. The comparison can reverse depending on the hold period, because upfront costs weigh most when a loan is repaid early.

The same logic applies to required third-party work. An offer that needs a full field exam and a fresh appraisal is more expensive than one that does not, even at the same rate, and it also takes longer to close. Interest rate vs all-in cost works through a fuller comparison, including hedging costs and deposit requirements.

What is negotiable

• A cap on the lender's legal fees. Lenders often agree to one on a straightforward loan, especially when the file is clean and the documents follow their standard form.
• Crediting a commitment or deposit at closing. Ask that anything paid before closing be credited against the closing fee rather than added to it.
• Using existing third-party reports. A recent appraisal or a quality of earnings report you already paid for can sometimes be relied on, if the lender accepts the provider.
• Sizing a line to what you will draw. A smaller commitment with an accordion costs less in unused fees than a large one you rarely touch.
• The exit. Prepayment premiums and early termination fees are usually more negotiable than the rate, and matter more if you expect to refinance.

What is rarely negotiable: the SBA guaranty fee, which is set by SBA, and the principle that the borrower pays the lender's costs. What you can control is how much work the lender has to do. A complete file, with the numbers already reconciled, means fewer rounds of questions for counsel and fewer surprises for the underwriter.

Where Transparent's fee fits

Transparent charges nothing before a loan closes: no application fee, no retainer. On SBA loans the lender pays Transparent, not the borrower. Once your documents are in, Transparent builds the full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day, and puts it in front of lenders from a book of 1,800+ that fit the deal. The package is described on the package page, and how lenders are chosen is on lenders.

The practical point for closing costs is that competing offers arrive against the same file, so their fees can be compared on the same assumptions: the comparison above, done for your actual deal rather than an illustration.