Good news for business owners considering an SBA 504 loan: The U.S. Small Business Administration (SBA) has announced updated fees for fiscal year 2027, including significant fee waivers for businesses in several key industries and locations.
Effective October 1, 2026, qualifying businesses in manufacturing, the food supply chain, and designated rural areas are eligible for a waiver of both the upfront guaranty fee and the annual service fee associated with SBA 504 financing.
These changes could mean meaningful savings for eligible businesses looking to purchase commercial real estate, acquire equipment, expand operations, or refinance qualifying debt.
Which Businesses Qualify for the New SBA 504 Fee Waivers?
The SBA has identified three categories of businesses eligible for the FY2027 fee waivers.
1. Manufacturing Businesses
Businesses classified under NAICS codes 31, 32, and 33 qualify for the fee waivers.
These classifications encompass a broad range of manufacturing operations, including businesses involved in producing machinery, fabricated metal products, electronics, food products, and other manufactured goods.
For manufacturers considering purchasing a facility, expanding production capacity, or investing in equipment, the waivers offer an opportunity to reduce financing costs.
2. Food Supply Chain Businesses
The SBA has also extended the fee waivers to businesses operating within designated segments of the food supply chain.
Eligible operations include certain businesses involved in:
- Agriculture and crop production
- Livestock and animal production
- Fishing and related agricultural services
- Agricultural equipment distribution
- Food and agricultural product wholesaling
- Grocery retail
- Certain specialized transportation and refrigerated trucking operations
- Refrigerated warehousing and storage
Eligibility is determined by specific NAICS classifications, and not every business operating within the broader food industry automatically qualifies.
For example, certain trucking classifications are eligible only when their operations involve refrigerated and frozen transportation, farm products, grain products, or livestock.
Business owners should work with an experienced SBA 504 lender to confirm whether their operations meet the applicable requirements.
3. Businesses Located in Rural Areas
Businesses located in qualifying rural areas may also be eligible for the FY2027 fee waivers, regardless of whether they operate in manufacturing or the food supply chain.
Under the SBA's Standard Operating Procedures (SOP), a rural area is defined as an area located in a county that the U.S. Census Bureau has classified as at least 30% rural.
This means that businesses located in counties meeting the rural population threshold may qualify for these incentives, even if they are not traditionally considered agricultural businesses.
Business owners can review the Census Bureau's geographic classifications to learn more about rural eligibility. Learn more about rural classifications from the U.S. Census Bureau.
How Much Could Businesses Save?
For qualifying businesses, the SBA is waiving two fees normally associated with the SBA 504 portion of a loan.
- Upfront Guaranty Fee: Normally 0.50% of the SBA 504 loan amount, this fee is waived for eligible businesses.
- Annual Service Fee: Normally 0.203% for standard SBA 504 loans in FY2027, this fee is also waived for eligible businesses.
For perspective, on a $2 million SBA 504 debenture, eliminating the 0.50% upfront guaranty fee represents an initial savings of approximately $10,000.
The annual service fee waiver provides additional savings over the life of the loan. Actual savings will depend on the loan amount, repayment schedule, and applicable program requirements.
It's important to note that these waivers apply specifically to the identified SBA fees, not every closing cost or financing expense associated with an SBA 504 loan.
Do the Fee Waivers Apply to SBA 504 Refinancing?
Yes. The FY2027 fee waivers extend beyond traditional SBA 504 financing.
Qualifying businesses may also receive the fee waivers through both SBA 504 refinancing programs:
- SBA 504 Debt Refinance With Expansion: Designed for eligible businesses refinancing existing debt as part of a qualifying expansion project.
- SBA 504 Debt Refinance Without Expansion: Allows eligible businesses to refinance certain existing commercial real estate or equipment debt without requiring a new expansion project.
This creates additional opportunities for qualifying business owners to evaluate their existing financing arrangements and potentially reduce long-term borrowing costs.
What Are the Standard SBA 504 Fees for FY2027?
For businesses that do not qualify for the special fee waivers, the SBA has announced the following fees for loans approved between October 1, 2026, and September 30, 2027.
- Standard SBA 504 Loan: 0.50% upfront guaranty fee, 0.203% annual service fee
- SBA 504 Debt Refinance With Expansion: 0.50% upfront guaranty fee, 0.203% annual service fee
- SBA 504 Debt Refinance Without Expansion: 0.50% upfront guaranty fee, 0.204% annual service fee
The upfront guaranty fee remains unchanged from FY2026.
However, annual service fees have decreased slightly, from 0.209% to 0.203% for standard SBA 504 loans and from 0.2115% to 0.204% for debt refinancing without expansion.
Why These Changes Matter for Small Business Owners
The SBA 504 Loan Program is designed to help small businesses finance major fixed assets, including owner-occupied commercial real estate and long-term equipment.
With benefits that can include as little as 10% down, long-term fixed interest rates, and no balloon payments on the SBA 504 portion, the program is an attractive financing option for businesses investing in their future.
The FY2027 fee waivers add another potential advantage for qualifying borrowers.
Whether you're a manufacturer planning to expand, a food supply chain business investing in new facilities, or a business owner operating in an eligible rural community, these changes could make SBA 504 financing even more cost-effective.
Find Out If Your Business Qualifies
At Business Finance Capital (BFC), SBA 504 financing is all we do.
With more than 35 years of experience helping small businesses secure financing for commercial real estate, equipment, and expansion projects, our team understands the complexities of SBA lending and how to help borrowers take advantage of available opportunities.
If you're considering purchasing commercial property, expanding your business, or refinancing eligible debt, we can help you determine whether your business qualifies for the new FY2027 fee waivers.
Contact Business Finance Capital today to explore your SBA 504 financing options.