SBA extends small-loan fee waiver

The Small Business Administration is extending the fee waiver for 7(a) loans of $150,000 or less for fiscal year 2015. The fee waiver program, which was implemented on Oct. 1, 2013 and scheduled to last 12 months, has been extended to Sept. 30, 2015.

“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 under-served communities, who use these small dollar loans more frequently,” said SBA administrator Maria Contreras-Sweet.

Since its implementation, 140 business owners qualified for the fee waiver, collectively saving Vermonters more than $100,000. Vermont small business owners have greater potential to take advantage of the fee waiver than those in other states because the average 7(a) loan made in Vermont is approximately $140,000 whereas the national average 7(a) loan is approximately $368,000. Seventy percent of all 7(a) loans made in Vermont qualified for the fee waiver in FY14.

The 7(a) Loan Program is the SBA’s primary program to help start-up and existing small businesses obtain financing when they might not be eligible for business loans through normal channels. This is the second SBA program to waive fees. In September, the SBA extended the fee waiver for Veterans Advantage loans in the amount of $350,000 or less for fiscal year 2015.

The SBA does not make direct loans, but it guarantees loans made and administered by commercial lending institutions.

Most banks and credit unions in Vermont are SBA participating lenders. For more information about the fee waiver and a list of participating lenders, visit www.sba.gov/vt or call the SBA district office at 802-828-4422.