The U.S. Small Business Administration announced that it would extend until Sept. 30 two popular programs that waived the borrower fee, and reduce the fee for some other loans.
Mike Ernandes, spokesman for the SBA North Carolina District Office, said that the fees – called upfront guaranty fees – for small business borrowers and for participants in the SBA’s Veterans Advantage program will continue to be reduced to zero through the remainder of the federal fiscal year, which runs from Oct. 1 to Sept. 30. The fee waiver was originally scheduled to end Sept. 30, 2014.
The fee, which basically helps cover administrative costs of lending, is levied only on the portion of a loan that is guaranteed by the SBA, Ernandes explained. SBA 7(a) loans – the most common kind – are made through large and small banks, credit unions and non-bank lenders, with the SBA guaranteeing a portion of the loan.
The fee, normally 2 percent, will be waived for loans whose total amount is $150,000 and under, according to the SBA announcement. It will also be waived for SBA Veterans Advantage loans of $150,000 to $350,000.
“Veterans Advantage borrowers get the blanket fee waiver for loans of $150,000 or less,” Ernandes said.
To qualify for consideration for a Veterans Advantage loan, according to the SBA announcement, a business must be 51 percent or more owned and controlled by an individual or individuals who are veterans; service-disabled veterans; active duty military service members participating in the military’s Transition Assistance Program; the current spouse of any veteran, active duty service member, reservist or National Guard member; or the widowed spouse of a service member who died while in service or who died as the result of a service-connected disability.
Ernandes said the SBA is also reducing by 50 percent the rate of the upfront guaranty fee for non-SBA Express loans of $150,000 to $5 million.
Join The Discussion