SBA Form 159: Everything to Know About Completing This Form
One of those documents might be the SBA Form 159 (commonly known as just SBA 159), a three-page form that only applies to a third of loan applicants.
We know that applying for funding can be daunting and that the various forms needed to secure an SBA loan can be confusing. We’ll review what SBA 159 is and what you need to know to fill it out correctly in this post.
What is SBA Form 159?
The SBA 159 is known as the Fee Disclosure Form and Compensation Agreement. As a small business owner, you’ll need this form if you paid someone to assist you when applying for an SBA Loan.
Filling out paperwork for an SBA loan program is a highly complicated process, something you might not have time to do if you’re also running a business. Instead of burying yourself in stacks of paperwork, you might outsource the documentation to a professional agent. If that agent receives compensation, the SBA needs to know about it: that’s where the SBA Form 159 comes in.
Lenders and agents must disclose their fees so they can’t take advantage of borrowers with unscrupulous charges. If you disclose everything to the SBA, borrowers are protected, and lenders must be honest and forthright.
Who Needs to Complete SBA Form 159?
As we mentioned above, not all SBA loan applicants will be required to complete SBA form 159. Essentially, if you didn’t work with a broker or referral agent, you will be able to skip this step.
The SBA 159 is a disclosure form documenting any paid help you received during the loan application process. This disclosure comes in two basic types of payment:
- Agent Compensation
- Referral Fees
The definition of ‘agent’ can be complicated. Typically, it refers to a broker, lender, or loan packager the business owner pays to help complete the SBA loan application process. In some cases, you might have an agent who refers you to a loan servicer, and that agent often receives a referral fee for sending your business to the agency. Even if you didn’t directly pay the agent for their services, you must list the referral fee you paid in the SBA 159 form.
There are exceptions to this rule: if your accountant prepared financial statements but didn’t help you complete the loan application, you don’t need to disclose such work. Or, if you have property appraised by your lender’s associates (or the government), that also doesn’t meet the requirements for disclosure.
How to Complete SBA Form 159:
You must fill out an SBA 159 for each agent or referral resource used during the loan application process. For example, if three agents helped you secure your business loan, you must fill out three different SBA 159 forms.
Luckily, it shouldn’t take long to complete this form because it’s a relatively short document, and it’s easy to obtain most of the required information.
Below, you’ll find the steps that you’ll need to take to complete and submit SBA form 159:
1. Provide Loan Applicant Name and Business
The first section of the SBA 159 is the easiest to complete; you need to list your full name and business name.
If you applied for the loan under your business name, use that in the applicant name box and leave the business name box blank.
2. Complete the Agent Agreement and Certification
Your agent will need to fill out this part of the form, listing the following information:
- Their job title
- The services provided to you during the loan application process
- The total amount of compensation they received
- An itemized list of services offered, if the payment exceeds $2,500
- Your SBA Loan Number
Finally, the agent’s signature is required.
3. Submit the Applicant and Lender Certification
You’ll need to specify your small business loan certifications in this section, which usually means just a signature from you and another stakeholder in your company.
In addition, you must provide signatures and compensation totals from the SBA lender or Certified Development Companies (CDC) if you’ve applied for a 504 loan.
4. Review the Form Before Submitting It to the SBA
Once you compile all the necessary information, you should thoroughly review it to ensure everything required is included. In addition, check for any errors, such as incorrect compensation amounts. If possible, ask your business partner or another trusted member of your team to review SBA forms. Having additional people check the form will further ensure that the document is ready to be reviewed by the SBA.
Conclusion: Understand SBA Form 159 Before Applying for Financing
The SBA does a tremendous job of getting working capital into the hands of small business owners. However, if you don’t follow their application process correctly, you may not qualify for funding.
When applying for SBA loans, it’s critical not to forget any paperwork that could stall the loan application process. The SBA 159 is often overlooked by applicants, so remember: if a third party got paid for helping you with your SBA loan, you likely need to file an SBA 159.
For more information about completing SBA forms, check out our free resources below:
- The Ultimate Guide to SBA Loan Forms
- SBA Form 413: How to Complete the Personal Finance Statement
- What is SBA Form 912, and Do You Need to Complete It?
- How to Complete SBA Form 355
Editor’s Note: This post was updated for accuracy and comprehensiveness in April 2022.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.