SBA Form 159 Fee Disclosure & CPA Referral Rules

Under official U.S. Small Business Administration rules, the SBA Form 159 fee disclosure is the mandatory federal compensation agreement that itemizes every dollar paid to agents, packagers, and referring CPAs on an SBA 7(a) or 504 loan. Under 13 CFR § 103 and SOP 50 10, Form 159 requires full transparency before closing, mandating that lender-paid referral fees come entirely from lender yield with zero surcharges or capitalized costs passed to the small business borrower.

SBA Form 159 Fee Disclosure: Criteria, Numbers, and Exceptions

Every commercial lending professional, intermediary, and accounting practice navigating government-guaranteed debt must understand how the federal government audits intermediary compensation. Published guidelines on SBA Form 159 (Fee Disclosure and Compensation Agreement) require explicit accounting of who provided services, what specific assistance was rendered, and who paid the bill.

Mandatory Filing Criteria

An SBA Form 159 disclosure is legally triggered whenever an “Agent” provides loan packaging, referral, or advisory services to an applicant or lender in connection with an SBA 7(a) loan or 504 debenture:

• Referral Agent Identification: Any professional (including a CPA, outsourced financial officer, commercial loan broker, or finder) who introduces a borrower to an SBA Participating Lender for compensation must execute the agreement.
• Itemized Justification: When fees exceed standard thresholds or hourly billing models are used, an itemized schedule of services performed and hours expended must be attached to the form.
• Dual Compensation Ban: An agent cannot collect compensation from both the borrower and the lender on the same financing event. For CPAs, if we or our partner firms earn a lender-paid referral fee, we cannot bill the applicant packaging fees for that same placement.
• Timing: The agreement must be executed by the applicant, the lender, and the agent prior to any disbursement of loan proceeds.

Fee Numbers and Governing Caps

The SBA monitors agent compensation to protect small business applicants from predatory packaging fees and exorbitant charges. While private referral arrangements between lenders and agents are paid out of lender profits, they must remain within customary commercial ranges:

• Typical Referral Ranges: Lender-paid referral fees generally range between 0.50% and 1.00% of the gross loan amount (for example, $10,000 to $20,000 on a $2,000,000 transaction).
• Packaging Fee Caps: Where an agent charges the borrower directly for packaging, total combined packaging and placement fees typically cannot exceed sliding scale maximums (historically ranging from up to $2,500 on small notes under $50,000, sliding down to roughly 1% to 1.5% on multi-million dollar facilities, subject to strict reasonableness tests).
• Full Lender Absorption: Under standard lender-paid referral agreements, 100% of the referral fee must be disbursed from lender origination revenue. Zero dollars can be charged back to the applicant, invoiced at closing, or capitalized into loan principal.

Exceptions to SBA Form 159 Execution

Not every professional interaction requires an executed Form 159. The primary exceptions include:

• Routine Accounting & Legal Work: A CPA preparing standard annual financial statements, tax returns, or routine historical documentation that the client happens to supply to a lender does not need to complete Form 159, provided the CPA receives no compensation tied to loan origination or packaging.
• Direct Full-Time Employees: Salaried employees of the lender or the borrowing operating company do not execute agent disclosure forms.
• Direct Lender Legal Counsel: Closing attorneys retained directly by the lender to draft standard settlement documentation under standard fee arrangements are generally exempt from agent filing.

Venture Debt Lender Referral Agreement: Conditions, Eligibility, and Framework

When high-growth venture-backed companies, tech startups, or middle-market businesses need non-dilutive runway extension, CPAs and corporate advisors frequently evaluate venture debt alongside commercial options. A venture debt lender referral agreement establishes the contractual mechanism under which an advisor introduces a prospective borrower to a specialized venture lender in exchange for a success-based origination or referral fee.

A venture debt lender referral agreement is a formal contract between an institutional capital provider and a referring professional—such as a CPA, outsourced CFO, or financial advisor—establishing referral compensation for originating growth capital. Under AICPA Rule 1.520 and commercial lending standards, professionals can legally earn lender-paid fees (typically 0.50% to 1.50% of funded loan principal) provided they maintain prior written client disclosure and perform no attest services.

Conditions and Eligibility

Entering into a venture debt lender referral agreement requires adhering to both contractual covenants and professional conduct standards:

• Non-Attest Client Status: Under AICPA Rule 1.520, the CPA firm cannot perform financial statement audits, reviews, or certain examinations of prospective financial information for the referred entity. Advisory, outsourced CFO, and tax-only clients remain eligible.
• Written Disclosure & Informed Consent: The CPA or referral partner must provide clear written disclosure to the corporate client prior to introducing the venture debt fund. The document must disclose the nature of the partnership, the anticipated fee calculation, and confirm that the fee will not increase client borrowing spreads or warrant coverage.
• No Broker-Dealer Licensing Trigger: Under SEC guidelines and FINRA regulations, finder activities must be strictly limited to introductions. Referral partners must not negotiate credit agreement terms, advise on warrant pricing, or handle borrower funds unless registered as a broker-dealer.
• Lender Institutional Approval: Venture debt lenders require a formalized agreement executed prior to deal submission, specifying non-circumvention protections, a defined fee schedule, and 12-to-24 month client protection windows.

Evidence: Venture Debt vs. SBA Form 159 Referral Agreement Structures

The operational and legal terms of a venture debt lender referral agreement differ significantly from government-guaranteed SBA 7(a) and 504 financing arrangements. The table below compares the standard parameters we navigate when guiding commercial borrowers and CPA partners:

Parameter	Venture Debt Lender Referral Agreement	SBA Loan Referral Structure (Form 159)
Governing Standard	AICPA Rule 1.520 & Institutional Contract Law	AICPA Rule 1.520 & SBA Form 159 (13 CFR § 103)
Typical Referral Fee Range	0.50% to 1.50% of committed/funded facility	0.50% to 1.00% of gross loan amount
Payment Source	Venture fund management fee or closing revenue	Lender origination proceeds (zero borrower charge)
Warrant Coverage Participation	Rarely permitted without broker-dealer status	Strictly prohibited under federal guidelines
Disclosure Mandate	Prior written disclosure to borrower leadership	Itemized federal disclosure via SBA Form 159
Timing of Disbursement	10 to 30 days post-initial tranche funding	Within 10 business days of final loan settlement
Best Practice Agreement Term	12 to 24 month non-circumvention coverage	Single-transaction or master lender agreement

Worked Example: Fee Modeling for a Growth Debt Facility

Consider an advisory client operating a SaaS enterprise seeking a $5,000,000 venture debt credit facility to extend cash runway between equity rounds. Advisors can help the enterprise determine whether to evaluate traditional structured debt or stay agile with a commercial line of credit.

Under an executed venture debt lender referral agreement providing a 1.00% lender-paid origination fee on funded capital:

• Facility Amount: $5,000,000 total commitment ($3,000,000 funded at closing, $2,000,000 milestone tranche).
• Referral Agreement Fee: 1.00% of funded debt.
• Initial Earned Fee: $30,000 paid to the referring CPA firm upon initial tranche closing, with an additional $20,000 contingent on the milestone drawdown.
• Compliance Trail: Prior written disclosure signed by the client board; AICPA independence checklist verified; zero advisory fee double-dipping.

When clients hold commercial real estate collateral alongside operating entities, consult our insights on commercial mortgage loans to evaluate alternative capital stacking strategies.

Can a CPA Really Accept a Referral Fee for an SBA Commercial Real Estate Loan?

Yes, absolutely. Under the American Institute of Certified Public Accountants Code of Professional Conduct Rule 1.520 and U.S. Small Business Administration regulations, Certified Public Accountants are legally permitted to accept lender-paid referral fees for commercial real estate loans. To stay compliant, the CPA must deliver prior written disclosure to the client regarding the fee arrangement and refrain from performing audit, review, or attest services for that client.

Conditions and Caveats

The rules around CPA referral compensation get specific depending on the type of accounting services provided to the borrower. AICPA Rule 1.520 clearly states that a practitioner cannot accept a referral fee or commission from any client if that practitioner or their firm performs:

• An audit or review of a financial statement.
• A compilation of a financial statement, especially if the member reasonably expects a third party will use it and the compilation report does not disclose a lack of independence.
• An examination of prospective financial information.

If your accounting practice handles tax preparation, assists with entity structuring, acts as an outsourced CFO, or offers advisory services to a business owner—and does not perform attest functions for them—accepting a referral fee is permissible under federal professional standards. However, state boards of accountancy retain ultimate jurisdiction across three regulatory categories:

Regulatory Category	State Accountancy Board Approach	Example Jurisdictions	Mandatory Requirement
AICPA-Aligned States	Adopt AICPA Rule 1.520 as written.	Illinois, Ohio, Pennsylvania	Prior written disclosure for non-attest clients.
Mandatory Consent States	Require formal client signature prior to payment.	New Jersey, Texas	Executed client acknowledgment retained on file.
Restrictive Ban States	Prohibit referral fees regardless of client status.	California (Accountancy Act Sec. 56)	No fee sharing permitted.

Before entering into referral relationships, brokers and intermediaries can also review our guide on the SBA preferred lender list commercial brokers framework to partner with seasoned credit institutions.

Evidence: How the Money Works in a Compliant SBA CRE Referral

Consider an industrial distributor purchasing a $2,000,000 owner-occupied warehouse using an SBA 504 loan structure. The client relies on your firm exclusively for non-attest tax and advisory services.

Transaction Parameter	Metric / Value	Regulatory Baseline
Total Commercial Real Estate Purchase Price	$2,000,000	Meets owner-occupied CRE criteria (>51% occupancy).
Lender Financing Structure	SBA 504 (50% Senior / 40% CDC / 10% Equity)	Standard 90% LTV financing window.
Closing Timeline	45 to 60 Days	Underwriting through SBA debenture authorization.
Lender-Paid Referral Fee Percentage	0.50% to 1.00% of loan amount	Paid from lender yield; zero cost to borrower.
Gross Referral Fee Earned	$10,000 to $20,000	Itemized on SBA Form 159.

Under SBA regulations, the lender pays the referral fee directly from origination revenue. The fee does not appear on the borrower settlement statement, is not added to closing costs, and cannot be capitalized into loan principal. For transactions involving owner-occupied commercial real estate, compare loan programs in our breakdown of SBA 504 vs 7a owner occupied property financing.

How Exactly Does AICPA Rule 1.520 Handle Referral Fee Disclosures and Keep Client Independence Intact?

AICPA Rule 1.520 requires CPAs to disclose referral fee arrangements in writing before introducing clients to lenders or intermediaries. The rule safeguards professional objectivity by strictly prohibiting referral compensation from any client for whom the firm conducts attest engagements.

AICPA Rule 1.520: The section of the AICPA Code of Professional Conduct addressing commissions and referral fees, requiring members paying or receiving a referral fee to deliver advance written disclosure to the client.

Attest Services: Professional engagements—including audits, financial statement reviews, compilations lacking independence disclaimers, and prospective financial examinations—that require absolute mental and regulatory independence.

Conditions and Disclosure Rules

Compliance hinges on two factors: client service classification and disclosure timing. Written disclosure must be delivered before initiating loan applications. The written notice must state:

• The existence and nature of the referral arrangement between the CPA and lender.
• The compensation calculation methodology (e.g., basis points on funded debt).
• Explicit confirmation that the fee is paid by the capital provider and does not increase client financing charges.

When financing commercial real property, understanding equity limits is paramount. Review our breakdown of SBA commercial real estate down payment requirements to verify deal feasibility before initiating introductions.

Step-by-Step Checklist for CPA Referral Fee and Agreement Compliance

Following a structured compliance process ensures complete adherence to state accountancy boards, AICPA conduct codes, and federal SBA Form 159 guidelines:

1. Screen Independence: Confirm the client receives exclusively non-attest services. Exclude all audit and review clients.
2. Review State Statutes: Ensure your state licensing board allows referral fees for non-attest engagements.
3. Deliver Written Client Disclosure: Issue formal written notice outlining fee mechanics and lender payment sources before introducing lenders.
4. Execute Master Referral Agreement: Finalize a venture debt lender referral agreement or SBA partner contract defining fee percentages, non-circumvention terms, and payment schedules.
5. Execute Disclosure Forms Prior to Funding: Complete SBA Form 159 for SBA transactions or retain countersigned client disclosure for venture debt deals.
6. Settle and Archive: Verify fee disbursement within 10 to 30 days of loan funding, and retain documentation for at least 7 years in firm compliance archives.

For complex sponsor transactions involving bridge debt and private placement, discover how our specialists at boutique CRE finance firms structure senior debt facilities.

Frequently Asked Questions

What is the primary purpose of the SBA Form 159 fee disclosure?

The SBA Form 159 fee disclosure is a mandatory federal document requiring small business applicants, participating lenders, and third-party agents to report all fees, commissions, and compensation associated with an SBA loan. It ensures total fee transparency and confirms that referral fees are paid solely by the lender without unauthorized costs charged to the borrower.

What is a venture debt lender referral agreement?

A venture debt lender referral agreement is a legal contract between an institutional capital provider and a referring advisor (such as a CPA, outsourced CFO, or intermediary) detailing referral fees, payment milestones, non-circumvention terms, and client disclosure requirements for sourcing venture-backed debt facilities.

Can a CPA accept a referral fee under AICPA Rule 1.520?

Yes. CPAs can accept referral fees for non-attest advisory and tax clients provided they deliver written fee disclosure in advance. CPAs cannot accept referral fees from clients for whom they perform audits, reviews, or compilations without independence disclaimers.

How do venture debt referral fees differ from SBA Form 159 fees?

Venture debt referral fees are governed by private commercial agreements and AICPA disclosure rules, typically paying 0.50% to 1.50% of funded commitments. SBA referral fees are strictly regulated under federal statute (SBA Form 159 / 13 CFR § 103 / SOP 50 10) and must be paid entirely from lender yield with mandatory itemized federal reporting.

Can an advisor receive warrant coverage through a venture debt referral agreement?

Generally no, unless the referring advisor is a licensed broker-dealer registered with FINRA and the SEC. Unregistered intermediaries accepting equity or warrant compensation risk violating federal securities broker-dealer regulations.