04 Nov SBA Announces Zero Fee Loans under $150,000
For loans made after October 1, 2013, the fees for SBA loans will be set at zero. From SBA.gov:
Setting fees at zero effectively makes these loans cheaper for borrowers, encouraging lending to small businesses that face the most constraints on credit access and will create lending opportunities important for underserved communities.
That’s good for these businesses, it’s good news for their neighborhoods and communities, and it’s good news for our economy.
This initiative to make loans cheaper for the small businesses owners seeking them is the latest in our efforts to make sure we’re reaching more business owners and entrepreneurs with great ideas, vision, and the passion necessary to tackle the next challenge in their business.
Read more here.
Takeaways for Business Owners:
While all business owners should be cautious when taking on debt financing, having loans with zero fees is always a good thing. As with all debt financing, be sure to have a lawyer review the loan agreements and make sure that taking out the loan is essential to your business.
I also recommend that business owners take a look at how much they actually need, why they need the funds and do they have a plan for repaying the loan. It might be better to take out loans in smaller amounts in a series of loans, rather than one big loan, if you needs are less pressing.
Finally, be sure to look around at SBA’s options for loans. There are multiple possibilities for loans through the SBA, exploring more than one will likely yield some surprises that may be of even greater value to you and your business.