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SBA Loan Fee Reductions Help Small Business Owners Nationwide

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SBA Loan Fee Reductions Help Small Business Owners Nationwide

By Ann Mehlum, Former SBA Official
Published: February 14, 2014 Updated: February 14, 2014

In order for small businesses to remain viable in a recovering economy, access to capital must remain an SBA priority.  At the same time, applying for and getting a commercial loan involves certain costs that may make borrowers think twice before making that commitment.

Often times, small businesses that need loans with smaller dollar amounts --$350,000 and under- are usually either just starting or in their early stages. Attention to the bottom line is paramount at this critical time, and a lack of adequate financial resources may become an obstacle to growth.

Mindful of this situation and consistent with our mission to help small businesses start, grow and succeed, SBA recently introduced two initiatives aimed at eliminating certain borrower fees, thus making it cheaper and easier for small businesses to obtain much needed financing.

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, or the SBA District Office nearest you.



About the Author:

Ann Mehlum
Ann Marie Mehlum

Former SBA Official

Ann Marie Mehlum is the Associate Administrator for SBA’s Office of Capital Access.


I am female,62, soon pensioner from germany. Your website is interesting and informative to read. I would like collect small business ideas for pensioners and I wonder in how far it is possible for an american pensioner to get in USA a loan. Thankyou for your respond.
If you want to start a Small Business, then you get loan because of your need. Every person not able to start business due to financial problems. every business can not eligible for loan. So SBA is provide help of people who will start the business. SBA is give support to the people financially.
The key to reducing fees and charges for small business loans is to encourage commercial lenders to lend to small business. The small business market is a highly attractive lending space and market competition is sure to drive down lending rates and fees and charges. The UK government has spent the last 24 months focused on programs to get lenders to provide capital to small business - and the early signs are encouraging. There is some good information on small business lending options at This post was edited to remove a link. Please review our Community Best Practices for more information about how best to participate in our online discussions. Thank you.
It is one of the great and worthy step taken by SBA. The small business owners would be benefited for the business growth. The two initiatives taken to tackle problems of the small business owners are the excellent move by SBA.
It is an another commendable and praise-worthy step taken by SBA. The small business owner and also the medium class business will be greatly benefited by it. And I hope they are definitely looking for such a good opportunity to flourish their business. Great article. Thanks for sharing the information.
This would really serve as a shot in the arm to small businesses looking to avail finances. Kudos to SBA for coming up with this! For many businesses, it may make a difference between surviving and going under on account of financial costs.
SBA is been doing commendable job towards supporting small businesses financially, As every business cannot be eligible for loans, but offering them the loan & trying to make them survive through positive imitative is a great achievement from every angle.

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