Texas Border Business
SBA Borrowers saved $47,357 collectively due to Zero Fees in the Lower Rio Grande Valley District
HARLINGEN, TX– On October 1, 2013 the SBA initiated a program by which all 7(a) loans approved for $150,000 and under in FY 2014 will have a zero fee for both the yearly fee (also known as the ongoing servicing fee charged to the lender) and the upfront guaranty fee to the borrower on such loans.
“Setting fees at zero has encouraged lending to small businesses that face the most constraints on access to capital,” stated Sylvia Zamponi, District Director, Lower Rio Grande Valley District Office. “The most significant credit gaps seen are the smaller dollar loans. This is important because these lower-dollar loans often help finance new startups and entrepreneurs in underserved communities, which can include women, minorities, veterans and others,” she continued.
In the Lower Rio Grande Valley District, recent statistics reveal 79 loans for $150,000 or less have been approved by 10 lenders as of July 31, 2014, saving borrowers an estimated $47,357 collectively due to “zero fees”. Nationally, borrowers have saved almost $18.9 million since October 1, 2013 when the initiative was rolled out.
Current reports also demonstrate loans less than $50k are slightly down by 1.6%, loans $50k to $100k are down by 65% while loans greater than $100k to $150k are up 120%.
The Small Business Administration (SBA) developed the initiative to better serve pioneering entrepreneurs looking to start or grow a business. Access to capital is one area frequently studied. Fortunately for the small business community, in September 2013 the SBA announced the loan initiative that made access to capital cheaper and easier. On the other hand, the Zero Fees Initiative is set to end September 30, 2014.
For more information about the program call Maria G. Perez, Lender Relations Specialist, at 956-427-8533 ext. 242 or email at: mailto:maria.perez@sba.gov or in the Coastal Bend Counties call Rick Sturtevant at 361-879-0017 ext. 302 or email at: mailto:rick.sturtevant@sba.gov. Or visit the SBA website at www.sba.gov.
