BOSTON – Massachusetts small business owners have saved nearly $250,000 in fees since the SBA announced a new policy for FY 2014 setting fees on SBA 7(a) loans for $150,000 and under to zero ($0).
Last year, the SBA determined to eliminate fees on loans of $150,000 or less after conducting a review of the 7(a) Loan Program. As a result, a small business owner obtaining a $150,000 loan can save more than $2,500 in fees that previously would have been charged. The 7(a) Loan Program is the SBA’s primary program to help start-up and existing small businesses obtain financing when they might not be eligible for business loans through normal lending channels.
In addition to this, an SBA fee reduction to zero ($0) for all veteran loans authorized under the SBA Express program up to $350,000 went into effect on January 1, 2014 under a new program called SBA Veterans Advantage. This program is expected to yield significant savings for veterans looking to start or grow a business. Of all SBA loans that go to veterans, 73 percent are $350,000 and below.
These two initiatives are in place through the end of the current fiscal year, September 30, 2014.
“We were waiting to see if small business owners and lenders would respond to the new fee structure, and are delighted to see the program’s initial success,” said SBA Massachusetts District Director Bob Nelson. He added, “These policy changes are making small business loans cheaper for borrowers and are driving increases in low dollar loan activity across the state, with the SBA Massachusetts District Office reporting a year over year increase of 98 loans in the under $150,000 category after just the first full quarter of the year.”
For more information about SBA loan programs and services, or to find an SBA lender, visit our website at www.sba.gov/ma or call the Massachusetts District Office at (617) 565-5590.