Alan Bussey
Member
The Recovery Act (the 'Stimulus Act'), which became effective in February 2009, in part increased the SBA loan guarantee percentage and instituted SBA fee waivers. The 90% guarantee, up from the usual 75%, and the fee waivers have tremendously increased small business borrowing under the SBA program when compared to the disastrous 2008, up more than 80%. (Loan volume is still well off the pace of 2007.)
For refinancing, buying, or building, the fee waivers often save car wash loan applicants $20,000 or more. That's real dollars saved. This is also dollars saved compared to non-SBA loans that have an origination fee. Since the SBA guarantee fee and other fees are customarily financed into the loan, the fee waivers also lower the monthly payments.
For SBA the Recovery Act officially ended on February 28, 2010, but business loan applicants used all of the appropriation by February 22nd. The higher guarantee and the fee waivers ended.
On March 2, 2010 Congress passed and President Obama signed the Temporary Extension Act of 2010. The law provides an additional $60 million for the higher SBA guarantee and the loan fee waivers.
This new extension lasts only until March 28th or until the appropriation runs out again, whichever comes first. For new loans submitted to SBA after March 28th the guarantee drops back to the normal 75%. The fee waivers officially continue until 9/30/2010, but the money probably won’t last until even the end of this month (March 2010).
If you plan to take advantage of the higher guarantee and the SBA fee waivers, you need to have your application submitted to the bank by about March 15th. The key to getting the higher guarantee and the fee waivers is submission of the application to SBA. Submission to SBA can happen within just a few days after the bank has approved your loan.
For refinancing, buying, or building, the fee waivers often save car wash loan applicants $20,000 or more. That's real dollars saved. This is also dollars saved compared to non-SBA loans that have an origination fee. Since the SBA guarantee fee and other fees are customarily financed into the loan, the fee waivers also lower the monthly payments.
For SBA the Recovery Act officially ended on February 28, 2010, but business loan applicants used all of the appropriation by February 22nd. The higher guarantee and the fee waivers ended.
On March 2, 2010 Congress passed and President Obama signed the Temporary Extension Act of 2010. The law provides an additional $60 million for the higher SBA guarantee and the loan fee waivers.
This new extension lasts only until March 28th or until the appropriation runs out again, whichever comes first. For new loans submitted to SBA after March 28th the guarantee drops back to the normal 75%. The fee waivers officially continue until 9/30/2010, but the money probably won’t last until even the end of this month (March 2010).
If you plan to take advantage of the higher guarantee and the SBA fee waivers, you need to have your application submitted to the bank by about March 15th. The key to getting the higher guarantee and the fee waivers is submission of the application to SBA. Submission to SBA can happen within just a few days after the bank has approved your loan.
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