Congress Extends Small Business Administration (SBA) Loan Incentives
Through April 30, the SBA will guarantee 90% of the amount of its flagship 7(a) loans for startups and small businesses as well as reduce or totally eliminate the fees on 7(a) and 504 loans. The 90% guarantee on SBA loans, up from the usual 75% guarantee, enables bankers to make loans that they would otherwise reject. These incentives were first funded by $375 million in an economic stimulus bill and have now been extended three times. According to SBA Administrator Karen Mills, the new program led average weekly loan approvals to increase by 87 percent compared to the weekly average before passage of last year’s American Recovery and Reinvestment Act.
Have a non-Recovery Act 7(a) or 504 loan and wondering about cancelling or resubmitting to take advantage of better terms? You can’t do it. Nor can you have your fees waived retroactively.