Many SBA lenders have built a successful SBA portfolio by getting referrals and paying 1-3% referral fees for this business. It is a common practice.
We attended the Mid-America Lenders Conference in San Antonio last week and this topic came up several times. Linda Rusche, SBA Director of Office of Financial Assistance and Brent Ciurlino, SBA Director of Office of Credit Risk Management did not directly say but seem to infer that the payment of referral fees falls within the SOP guidelines also related to agents and lender service providers. Specifically, the SOP may limit these fees to the current caps of 3% up to the first $50,000, 2% on the first $1 million and ¼% for each one million thereafter, to a maximum of $30,000. This, I believe is not the practice of most referrals paid within this program and was voiced during one of the question/answer sessions.
Brent Ciurlino did say they are now only collecting information via submission of Form 159 and the intent is not to “get the lender” but determine the level of fees paid and to insure they are not unreasonable or excessive.
It sounds like an area of SBA lending that will soon be re-evaluated in the months to come. Where do you stand on referral fees?