Small Business Administration offers fee-waived loans under $150K
To prime the pump of small business and improve the economy, the Small Business Administration has eliminated fees on business loans of under $150,000.
The no-fee loans program, which began in October and runs through the end of the federal budget year Sept. 30, gives businesses a chance to borrow from banks at savings of up to $2,550 — enough to pay for an additional piece of equipment or provide some additional working capital, says Massachusetts SBA Director Robert H. Nelson.
“Any time you can save small business some money, that’s good news,” he said recently.
For veterans — including reservists, National Guard and the spouses — the limit on no-fee loans is $350,000, he said. “We want to make sure small businesses know these incentives are in place.”
SBA is also providing an incentive for banks to promote the program, by eliminating this year the fee they are normally charged.
“We hope to continue this (promotion) in the future, but it’s good news right now,” said SBA New England Regional Director Seth Goodall. He said that Massachusetts is among the top states in the country when it comes to SBA loans issued through local banks.
“It’s about getting capital into the hands of small businesses to stimulate the economy” added Nelson.
Between last Oct. 1, when the program began, and Jan. 1, SBA has guaranteed nearly $80 million in so-called 7(a) loans in Massachusetts, including nearly $120,000 through Greenfield Savings Bank and $82,000 through Greenfield Co-Operative Bank.
Greenfield Savings loan officer said A.J. Bresciano said his bank has been making SBA-guaranteed small business loans for years.
“It certainly helps out when collateral becomes an issue for a loan,” Bresciano said. “Those guarantees make it very helpful to a bank to maybe say ‘Yes,’ when otherwise, we’d have to say, ‘No.’”
With no up-front fee charged to the borrower, it makes it more attractive to use the program for businesses that lack enough collateral, said Bresciano, as long as cash flow is good and the businesses meet all other borrowing requirements.
“There’s a number of businesses that we’ve utilized the program for,” he said.
In addition to loans, SBA provides small businesses technical assistance and counseling through the Service Corps of Retired Executives, at the Franklin County Chamber Commerce office.
On the web: www.sba.gov/loanprograms.
You can reach Richie Davis at: email@example.com or 413-772-0261, ext. 269