One of the initiatives, launched at the end of fiscal year 2013, set borrower fees to zero (0) on all 7(a) loans $150,000 and under originated on or after Oct. 1, 2013. This initiative is among SBA’s latest efforts to make sure we’re reaching more business owners and entrepreneurs to help them to tackle the next challenge in their businesses.
The 7(a) Loan Program is the SBA’s primary program to help start-up and existing small businesses obtain financing when they may not be eligible for conventional business loans . In just three months after its implementation, fee elimination on loans $150,000 and under have saved small businesses nationwide more than $5 million. A small business obtaining a $150,000 loan now saves more than $2,500 in fees, which can be used for other business expenses.
The SBA has begun a similar effort to help small business owners who are veterans. Beginning Jan. 1, 2014, SBA launched the SBA Veterans Advantage initiative, which has zero borrower fees on all loans $350,000 and under made through this program. This program is expected to yield significant savings for veterans looking to start or grow a business. Of all SBA loans made to veterans during the last 5 years, 73 percent were below $350,000.
In the first 10 days (Jan 1 – Jan 10) this initiative saved veterans business owners almost $179,000.
While it is still too early to gauge the impact these initiatives will have on the success of small businesses, the initial numbers seem to indicate that savings will be significant.
These two initiatives are in place through the end of the current fiscal year, Sept. 30, 2014.
For more information about SBA loan programs and services or to find an SBA lender, visit www.sba.gov, or the SBA District Officenearest you.