The Small Business Administration removed another speed bump in its Express Loan Program for veterans this month. The agency announced that it was waiving the fee on loans up to $350,000.
Gone now is a fee of up to 3 percent charged to first-time borrowers who obtain loans through the program. The loans are actually originated by financial institutions, but are backed by the SBA.
The SBA’s waiver more accurately represents a raising of a cap on the amount of a no-fee loan.The SBA had previously moved to waive initial borrowing fees from loans up to $150,000 starting in 2014. The cap has now been raised another $200,000.
In a prepared statement, SBA acting administrator Jeanne Hulit said the waiver “is part of the SBA’s broader efforts to make sure that veterans have the tools they need to start and grow a business.”
A vast majority of the agency’s loans to veterans — about 75% — are made for $350 or less, meaning the fee waiver will impact most loans to veterans originated through the SBA starting next year. And that means the veteran entrepreneurs will not just save money on their loans, they can put that savings into their businesses.
The Express Loan program, which started in 2004, guarantees as much as 50 percent of a loan originated by a credit union, bank or other lending institution through the SBA. It features a streamlined paperwork process and a short approval window. In most cases, decisions are made on loan applications within 36 hours.
For a third straight year, the SBA backed nearly $30 billion in loans to veteran-owned businesses in fiscal 2013. Hulit said the agency is committed to continuing that course. “As we honor our veterans and thank them for their service and sacrifice, let’s continue to identify ways to support them when they come home.”
Hulit made her announcement as the finishing touch to the SBA’s National Veteran Small Business Week. The annual event featured officials fanning out across the country to conduct workshops and counsel veterans who have started a business, or are considering going into business for themselves.
Harrison, J.D. “Small Business Administration eliminates loan fees for military veterans“. Washington Post. 11-10-13.