The stimulus funds providing fee relief for certain Small Business Administration-backed loans just ran out at noon Wednesday, a day before the program was due to sunset. But there are still extra benefits available to small business borrowers, Inc. reports.
On Sept. 7, the SBA issued two policy notices offering details on its plan to waive certain borrower fees on 7(a) loans of $350,000 or less and reduce fees on 504 loans, beyond Thursday. In light of the continued difficult position in which many businesses, particularly in-person operations, still find themselves, the agency is opting for an extension of the fee waiver.
Per the policy notices, the SBA’s fee waiver on 7(a) working capital loans applies to the guaranty portion of a loan, so borrowers with loans of $350,000 would save $7,875.
The fee structure for 504 loans is slightly different. They have upfront and ongoing fees that are not related to the guaranteed portion of the loan. While the upfront fee of 50 basis points has not changed, the annual service fee has been reduced from 45.17 to 24.75 basis points. The new fee structures will be effective for the SBA’s fiscal year 2022, which starts Oct. 1, 2021, and lasts through September 2022. Read more from Inc. about the SBA’s latest moves.