Some SBA 7(a) fees dropped on October 1
The U.S. Small Business Administration (SBA) said some 7(a) loan program fees will be reduced, beginning on October 1.
According to the agency, a yearly fee of 0.52% of the guaranteed portion of the outstanding balance of the loan will be assessed for 7(a) loans of $150,000 or more that are approved in the 2014 fiscal year. The SBA currently charges a service fee of 0.55% of the outstanding balance of the guaranteed portion of the loan.
Yearly fees and guaranty fees will not be charged on 7(a) loans of $150,000 or less that are approved in that year, the SBA added.
Credit unions may participate in 7(a) loans, and the SBA-guaranteed portion of a 7(a) loan is not counted against a credit union's business lending cap. There were 347 credit unions with over 8,100 SBA loans outstanding, totaling $921 million in funds, at the end of 2012.
The Credit Union National Association (CUNA) earlier this year urged the SBA to facilitate credit union loans to small businesses by supporting legislation that would increase the 12.25%-of-assets member business lending (MBL) cap. Separate House (H.R. 688) and Senate (S. 968) MBL bills were introduced earlier this year. Both bills would increase the MBL cap from 12.25% of assets to 27.5%. CUNA has estimated that lifting the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.
H.R. 688 has 115 House co-sponsors, and S. 968 is co-sponsored by 17 senators.