What closing costs are included in a business loan?

Business Loan Closing Costs: The Complete List

Unlike consumer mortgages, commercial loan closing costs vary widely depending on loan type, size, and whether real estate is involved. Here is every cost category you should budget for before closing.

• Origination fee: 0.5–3% of the loan amount, paid to the lender at closing
• SBA guarantee fee: 2% of the guaranteed portion for loans of $150,000 or less, 3% for $150,001–$700,000, and 3.5–3.75% above $700,000 (FY2026 schedule, effective October 1, 2025; set by SBA annually)
• Lender's legal fees: $1,000–$10,000 depending on deal complexity — borrower pays lender's counsel in most commercial deals
• Appraisal: $500–$5,000 for commercial real estate; required for SBA 504 and real estate-secured 7(a) loans
• Environmental Phase I Site Assessment: $2,000–$4,000 for commercial real estate transactions (required by most lenders)
• Title insurance: required for commercial real estate deals; premium varies by property value and state
• UCC filing fees: $50–$500 per filing per state for lien perfection on personal property collateral
• Documentation / processing fees: $200–$2,000 for administrative preparation of loan documents
• Escrow and recording fees: $200–$1,000 for recording mortgage/deed of trust with county recorder

SBA Guarantee Fee — The Largest Variable Cost

For SBA 7(a) loans, the guarantee fee is the largest variable closing cost and is set annually by SBA policy. For FY2026 (effective October 1, 2025), the fee on the guaranteed portion is tiered by loan size: 2% for loans of $150,000 or less, 3% for $150,001–$700,000, and 3.5–3.75% for loans above $700,000. The SBA can waive or reduce guarantee fees by congressional action (this occurred during COVID relief periods), so always confirm the current fee with your lender rather than assuming a waiver applies. The fee is paid by the lender but almost always passed to the borrower — budget for it explicitly. For an SBA 7(a) loan with $500,000 guaranteed at 75%, the guaranteed portion is $375,000 (loan size falls in the $150,001–$700,000 tier) — meaning the fee is $11,250 at 3%.

Tax Deductibility of Closing Costs

Under IRS Section 162, most business loan closing costs are deductible as ordinary and necessary business expenses — either immediately (if treated as a current business expense) or amortized over the life of the loan as loan origination costs. The IRS generally requires that loan origination fees and points be amortized over the loan term rather than deducted in full in year one. Legal fees paid for business loan documentation are separately deductible as professional services. Consult a CPA for the specific treatment of your transaction — real estate closing costs, SBA guarantee fees, and appraisal fees each have different deductibility timelines.

Your Rights on Costs Already Paid Before Closing

If a lender requires a commercial real estate appraisal, that cost is typically paid out-of-pocket before closing — and it's non-refundable even if the loan is later declined. Under Regulation B (Equal Credit Opportunity Act, ECOA), lenders must provide applicants a free copy of the appraisal and any other written valuation promptly, and no later than 3 business days before closing, regardless of the loan's final outcome. Separately, eleven states — California, New York, Virginia, Utah, Georgia, Connecticut, Florida, Kansas, Louisiana, Missouri, and Texas — have enacted commercial financing disclosure laws (CFDL) requiring providers to disclose the total cost of capital and an APR-equivalent rate before you sign, which lets you audit whether the closing costs actually charged match what was quoted.

Confirm the Numbers Before You Pay Anything Non-Refundable

Before authorizing a lender's counsel, appraiser, or environmental consultant to begin work — each a non-refundable cost if the deal falls through — request a written, itemized closing cost estimate. Federal Reserve survey data on commercial and industrial loan pricing shows origination and closing fees vary widely by lender type and loan size, so a written estimate lets you compare offers on equal footing; the underlying data is published in the Federal Reserve's Survey of Terms of Business Lending. If you're using an SBA-guaranteed loan, confirm the guarantee fee schedule directly with your lender rather than relying on a verbal quote — the fee is set by federal rule, not lender discretion. For a full list of currently deductible loan-related closing costs, the authoritative reference is IRS Publication 535. And if a lender's disclosed cost estimate changes materially between application and closing without a documented reason, that's a fair question to raise in writing — the CFPB's guidance on Regulation B and the FTC's commercial financing disclosure resources both exist precisely so borrowers can hold lenders to what was quoted.