SBA extends small loan fee cut deal, fee reduction on larger loans

WASHINGTON – The U.S. Small Business Administration has extended its fee-reduction program that was set to have expired at the end of fiscal year 2014.
Through the end of fiscal 2015, Sept. 30, 2015, the SBA will:

  • Continue to charge no upfront guaranty fee and annual servicing fee for 7(a) loans of $150,000 and less (7 (a) loans are the most common program provided by the SBA, designed to help businesses in a general sense)
  • For 7(a) loans larger than $150,000, the annual servicing fee will be 0.519 percent of the guaranteed portion of the outstanding balance of the loan, while the upfront guaranty fee will still depend on the amount and maturity of the loan
  • The zero upfront guaranty fee for SBA Express loans to veterans (also known as SBA Veterans Advantage loans) of $150,000 to $350,000 that went into effect on Jan. 1, 2014, will continue through the end of fiscal 2015.
  • Effective immediately, the upfront guaranty fee for non-SBA Express loans of $150,000 to $5 million will be reduced by 50 percent, although there is no reduction in the annual servicing fee for loans of greater than $150,000

“We don’t want SBA fees to be an impediment to getting capital out to communities where it can make a game-changing difference, especially to our underserved communities, who use these small dollar loans more frequently,” said SBA Administrator Maria Contreras-Sweet. “We also owe a debt gratitude and so much more to our service men and women, and veterans who are the cornerstone of small business ownership.”
In fiscal 2014, through Sept. 12, the SBA had guaranteed 28,806 loans of $150,000 or less with a total value of more than $1.74 billion, an increase in the number of loans of 23.4 percent and 30 percent in the value of the loans on a year-over-year basis. The fee reductions in place totaled nearly $19 million in fiscal 2013.

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