The Small Business Administration (SBA) has announced that it will extend the fee relief on 7(a) loans of up to $150,000 through fiscal year 2015. The original date for the expiration of the relief measures was September 30, the end of the 2014 fiscal year, but the SBA has decided to give borrowers an additional year. The SBA has also extended the zero upfront guarantee fee on loans up to $350,000 granted under the Veterans Advantage program.
"We zeroed out fees on loans of less than $150,000 to any 7(a) borrower because we don't want SBA fees to be an impediment to getting capital out to communities where it can make a game-changing difference, especially to our underserved communities, who use these small dollar loans more frequently," said SBA Administrator Maria Contreras-Sweet in a press release. "We also owe a debt of gratitude and so much more to our service men and women, and veterans who are the cornerstone of small business ownership."
According to SBA data, the Administration guaranteed 28,806 loans of $150,000 or less in FY 2014, totaling over $1.74 billion in value, 30 percent more than last year. Borrowers saved almost $19 million thanks to fee relief measures in 2013. As for small business loans that are granted to veterans, 70 percent are worth less than $350,000.
These measures are good news for small business owners, who will see some of their financial pressure eased. Commercial loan software can help lending institutions determine ideal installments and terms when considering a small business loan. This tool allows lenders to set amortization schedules, ensuring automated, on-time payments and reducing the risk of default.