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SBA Sets Fees on New Loans $150,000 and Under to Zero
District Borrowers save $11,000 collectively due Zero Fees
HARLINGEN, TX- The Small Business Administration (SBA) regularly looks for and develops initiatives designed to better serve pioneering entrepreneurs looking to start or grow a business. Access to capital is one area frequently studied. Fortunately for the small business community, in September the SBA announced a loan initiative that made access to capital cheaper and easier.
The program which began October 1, 2013 specified all 7(a) loans approved for $150,000 or less in FY 2014 will have a zero fee for both the yearly fee (also known as the ongoing servicing fee charged to the lender) and the upfront guaranty fee to the borrower on such loans.
“Setting fees at zero encourages lending to small businesses that face the most constraints on credit access,” stated Sylvia Zamponi, District Director, Lower Rio Grande Valley District Office. “It will also create lending opportunities important for underserved communities,” she continued. In the Lower Rio Grande Valley District, recent statistics reveal 19 loans under $150,000 have been approved during the first quarter of FY 2014, saving borrowers an estimated $11,000 collectively due to “zero fees”.
When loan numbers are reviewed, the most significant credit gaps seen are the 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.
Locally, the Lower Rio Grande Valley District closed FY 2013 with more than 25 lenders making 166 loans through the U.S. Small Business Administration's guaranty program. Of those loans almost 60% were approved for $100,000 or less.
For more information about the program call Maria G. Perez, Lender Relations Specialist, at 956-427-8533 ext. 242 or email at: firstname.lastname@example.org or in the Coastal Bend Counties call Rick Sturtevant at 361-879-0017 ext. 302 or email at: email@example.com. Or visit the SBA website at www.sba.gov.
The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise, to maintain and strengthen the overall economy of our nation and to help families and businesses recover from national disasters.