Loan Fees Waived For Veterans Who Use SBA Express In 2014
Attention Veteran Owned Business Members (information provided by the VA and SBA):
Veterans will get a break on Small Business Administration (SBA) loans beginning January 1, 2014.
Exempting Veterans from paying fees on these loans “is part of SBA’s broader efforts to make sure that Veterans have the tools they need to start and grow a business,” said Acting Administrator Jeanne Hulit.
The SBA announced it will charge no upfront borrower fees on loans of up to $350,000 made to Veterans through its SBA Express program. This program is a popular source of smaller SBA 7(a) loans because of its streamlined paperwork and quick turnaround times.
In fiscal 2013, the agency backed $1.9 billion in loans to 3,094 Veteran-Owned businesses.
Veteran-Owned Small Businesses won more than $12.2 billion in federal contracting business in fiscal 2012. And for the first time ever, the federal government exceeded the 3 percent goal to contract with Service Disabled Veteran-Owned Small Businesses.
But Veterans aren’t the only ones who received a break from the SBA this year. The agency also is charging zero fees on all loans of less than $150,000. Small businesses will save more than $2,500 in fees.
SBA Express
SBAExpress features an accelerated turnaround time for SBA review; a response to an application will be given within 36 hours.
| Maximum Loan Amount: | $350,000 (See SBA’s October 8, 2010 press release for more information about the temporary increase to $1,000,000) |
| Maximum SBA Guaranty %: | 50% |
| Interest Rate: | Lenders and borrowers can negotiate the interest rate. Rates can be fixed or variable and are tied to the prime rate (as published in The Wall Street Journal), LIBOR, or the optional peg rate (published quarterly in the Federal Register) and may be fixed or variable, but they may not exceed SBA maximums: lenders may charge up to 6.5 % over the base rate for loans of $50,000 or less, and up to 4.5 % over for loans over $50,000. |
| Eligibility Decision: | By SBA; qualified lenders may be granted authorization to make eligibility determinations. |
| Revolving Lines of Credit: | Up to seven years with maturity extensions permitted at the outset. |
| SBA Turnaround Time: | Within 36 hours |
| Forms: | Lender primarily uses own forms and procedures, plus SBA Form 1919, Borrower Information. |
| Collateral: | Lenders are not required to take collateral for loans up to $25,000; may use their existing collateral policy for loans over $25,000 up to $350,000. |
| Credit Decision: | By lender. |
| Purchase: | May request expedited SBA purchase on small loans or in situations where liquidation may be delayed. |
Loans made under this program generally follow SBA’s standards for the 7(a) Loan Program.
Eligibility
A lender may be eligible to participate in SBAExpress if:
- It is currently an SBA partner lender and meets certain portfolio performance standards.
- There are no minimum SBA loan volume requirements to begin making SBAExpress loans.
- It is currently a non-SBA lender that makes a reasonable number of commercial loans of $50,000 or less.
For More Information
For more information and a complete description of the application process, consult SBA’s SOP 50 10 5(A).
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