Great news regarding SBA financing!
The senate passed a small business bill 61 to 37 on September 14th that will greatly help re-invigorate SBA lending. If this bill becomes law, the following items will be of significant benefit to borrowers.
- SBA fees (origination and the guarantee fee) will be waived
- 7a loans will be increased from 2M to 5M
- 504 loans will be increased to 10M
- The LTV will be increased from 75% to 90%
- There will be more uses for an SBA loan
The House has already passed a similar bill so negotiating a final version should not be an issue. From there, the bill can be signed into law.
The last stimulus package ran out out funds back in May after being extended by Congress 4 times. As a result, SBA loan closings fell sharply. There was $1.5 Billion in SBA loans funded in May, but only $400M in June.
This new bill should bode well for those of us who originate commercial loans. Not only will those loans become cheaper for the borrower to obtain, but they will also become easier to close!
If anyone has questions about the SBA and their programs please don't hesitate to ask.