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Glossary

What is SBA Form 159?

Also called: Form 159, Fee Disclosure Form and Compensation Agreement

In one sentence: The SBA's Fee Disclosure Form and Compensation Agreement, used in 7(a) and 504 loans to identify any agent involved in a loan and the fees that agent is paid.

Last updated · Precise SBA editorial

In plain English

The SBA wants to know who helped arrange an SBA loan and what they were paid. SBA Form 159, the “Fee Disclosure Form and Compensation Agreement,” is how that’s recorded for 7(a) and 504 loans. It identifies any agent in the transaction, such as a loan packager or a referral agent, and itemizes the fees that agent receives, whether the borrower or the lender pays them.

Why it exists

Federal law requires an applicant to identify anyone engaged to help with the application and the fees paid, and SBA regulations require the applicant, lender and agent to sign a compensation agreement. The SBA uses the information to monitor fees charged by agents and the relationships between agents and lenders. For the borrower, it’s transparency: you see who is involved and how they are paid.

How it works

  • The lender records in the SBA’s system whether an agent was involved, and identifies the agent.
  • Each agent’s services are listed by type (for example, packaging versus referral), with the amounts.
  • Larger amounts of compensation from the same agent must be itemized with supporting documentation.
  • The signed form goes to the SBA with the loan records.

Hypothetical example

A buyer is introduced to a lender by a referral agent that the lender pays. At closing, the lender prepares Form 159 naming the agent and showing the referral fee in the referral-agent section. The buyer, the agent and the lender sign it. The buyer can see exactly who was paid and by whom.

Common mix-ups

  • It’s not a fee. It’s a disclosure of fees.
  • It’s not the loan application. It’s one of several SBA forms in the file; see documents for an SBA loan.

What to do with it

Read it before you sign, and ask about anything you don’t recognize. Our own arrangement is explained on how we get paid.

Common questions

Who signs SBA Form 159?

When an agent such as a loan packager or referral agent is involved and isn't covered by an SBA-reviewed lender service provider agreement, the form is completed and signed by the applicant, the agent and the lender. Each agent gets a separate form.

Is the fee on Form 159 added to my loan?

The form discloses fees; it doesn't decide who pays them. At Precise SBA, we never charge you. If a loan closes, the lender may pay us a referral fee, disclosed on SBA Form 159, and it is not added to your loan.

Does everyone who works on my loan appear on Form 159?

No. The SOP lists people who aren't treated as agents for this purpose, including your accountant preparing ordinary financial statements, the lender's appraiser and business valuator, and attorneys in connection with the loan closing.

Related terms

Personal Financial StatementA signed summary of an individual's assets, liabilities, income and contingent obligations, which SBA lenders collect from owners and guarantors.Personal GuarantyA personal promise by an owner to repay a business loan out of their own assets if the business cannot.

Go deeper

The SBA Loan Underwriting Process, Step by StepUnderwriting is where a lender turns your documents into a decision. Knowing what happens at each step, and what the lender has to write down, tells you what to prepare and where your deal is likely to get questions.Documents You'll Need for an SBA Loan (and How to Get Them Ready)The paperwork is the part most owners dread. It's easier if you know what's coming and gather it once.

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General information, not legal, tax or financial advice. Precise SBA is not affiliated with the U.S. Small Business Administration. Rules and lender policies change. Examples use hypothetical numbers. We never charge you. If a loan closes, the lender may pay us a referral fee, disclosed on SBA Form 159 (how we get paid). Back to the glossary.