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SBA Sets Fees on New Loans Under $150,000 to Zero, Getting Loans Into the Hands of More Entrepreneurs

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SBA Sets Fees on New Loans Under $150,000 to Zero, Getting Loans Into the Hands of More Entrepreneurs

By Jeanne Hulit, Former Acting SBA Administrator
Published: October 30, 2013 Updated: October 30, 2013

At SBA we’re always looking for ways we can better serve our customers—small business owners and entrepreneurs looking to start or grow their business.  And we’re constantly looking for ways we can make it easier and cheaper for small business owners to reinvest in their business, expanding and creating jobs along the way.

That’s why I was excited to announce today at the Woodrow Wilson Center that for all SBA-supported loans under $150,000 made after October 1 –the start of the new fiscal year-- the fees on those loans will be set to zero.

This is good news for a number of reasons.

When you look at the numbers, the most significant credit gap we see is for smaller dollar loans.  This is important because these lower-dollar loans often help finance new startups and entrepreneurs in underserved communities, which can include women, minorities, veterans and others.  In fact, according to the Urban Institute, SBA loans are 3 to 5 times more likely to go to women and minority-owned businesses than conventional loans. 

Setting fees at zero effectively makes these loans cheaper for borrowers, encouraging lending to small businesses that face the most constraints on credit access and will create lending opportunities important for underserved communities.

That’s good for these businesses, it’s good news for their neighborhoods and communities, and it’s good news for our economy.

This initiative to make loans cheaper for the small businesses owners seeking them is the latest in our efforts to make sure we’re reaching more business owners and entrepreneurs with great ideas, vision, and the passion necessary to tackle the next challenge in their business.  Under the Obama Administration, SBA has recommitted our efforts to supporting inclusive entrepreneurship in partnership with the small business lending community--reaching more small business owners in more communities across the country to ensure that our economic recovery and growth is truly “nationwide.”

For example, microlending has continued to increase under the Obama Administration, with SBA supporting more than $49 million in lending to more than 4,600 small businesses in FY 2013.  And since President Obama took office, SBA has supported more than $126 billion in lending to more than 260,000 small businesses and entrepreneurs. This includes two record years of delivering over $30 billion annually in loans in FY 2011 and FY 2012, and over $29 billion in 2013.

We’ve streamlined and simplified our smaller dollar loan programs--significantly reducing paperwork for our Small Loan Advantage program, a key initiative designed to expand access to its 7(a) product for loans under $350,000, and expanding our pool of lenders.  These changes have resulted in a more than 300 percent increase in SLA loans and an over 700 percent increase in the number of lenders using the program.  As of the end of FY 2013, 681 lenders have approved their first SLA loan since we streamlined the program. This is up from only 74 active SLA lenders who participated in the first 16 months of this program.  This streamlined initiative has generated $708 million approved dollars and 4,652 loans.

We also established Community Advantage to open SBA loan products to mission-based and non-profit lenders.

SBA continues to be well-positioned to assist small businesses as they seek opportunities to grow, hire and diversify their business in a growing economy.  And in partnership with our lenders, entrepreneurs in more areas and industries across the country will have the access and opportunity they need to help drive our nation’s economy and increase our global competitiveness.

At SBA, that’s what our work is all about.  This new initiative is another tool as we serve the small business community, who are doing amazing work to strengthen our economy for the long-term.




About the Author:

Jeanne Hulit

Former Acting SBA Administrator

Jeanne Hulit is the Acting Administrator of the U.S. Small Business Administration. The SBA helps both Main Street and high-growth small businesses get access to capital, counseling, federal contracts, disaster assistance and more.


Great news about the fees! My question is if a business already closed their SBA line/loan, during the same period, are the fees they incurred, are they reimbursed by the bank or SBA?
If a loan was closed on or after Oct. 1 but approved before that cutoff date, such business will not benefit from any fee waiver (or the reimbursement of the fees paid). Contact your local SBA district office for more detailed information. 

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