Prepayment Penalty (Statutory)

SBA mandates a "subsidy recoupment fee" which is paid to SBA - not bank when:

     Loan term is 15 years or greater, and:

     Borrower voluntarily prepays more than 25% of the outstanding loan balance in the 

     first three years of the loan.

Penalties are:

     1st year after disbursement - 5% X amount of prepayment

     2nd year after disbursement - 3% X amount of prepayment

     3rd year after disbursement - 1% X amount of prepayment