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The SBA Fee Waiver and Reduction

The SBA has recently reduced two fees associated with their SBA 504 Loan Program, according to a recent announcement from the organization made in late September. This is exceptionally good news for anyone with an SBA loan approved on or before October 1, 2015, and a invaluable opportunity to reduce the costs typically associated with a 504 loan.

The rate that has been reduced is the Ongoing SBA Guarantee Fee, which has dropped from 0.9375% to 0.914%. The Ongoing SBA Guarantee Fee is part of the overall effective rate, and now translates to 91.4 basis points per annum of the outstanding balance of the loan.

In conjunction with this, the SBA has also decided to completely eliminate what was previously known as the Upfront SBA Guarantee Fee. This one time fee which covered the administrative costs added to the Net Debenture Proceeds, has been reduced from 0.5% to zero.

What does this mean to you and your small business? Simply put … it means that you’ll be saving money on your next SBA loan. The elimination of the Upfront SBA Guarantee Fee results in thousands of dollars saved in administrative costs on most loans, and pairing that with the Ongoing Fee reduction makes securing a future SBA loan a very attractive option for any business looking to grow.

If you own a small business and are thinking of expanding, now is a great time to consider an SBA Loan. To find out more information about the latest SBA fee waivers and reductions, or for information on how NEDCO can help you to secure an SBA loan, contact us today.

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