A bright spot during the Covid-19 pandemic has been the tremendous support SBA has shown small businesses. The SBA currently is waiving the SBA guarantee fee on loans up to the end of September. This is a huge bonus for those entrepreneurs looking to purchase, refinance, or expand their business. Typically a SBA guarantee fee can be up to 3.5% of the guaranteed portion of the loan. For example the maximum amount of an SBA loan is $5,000,000.00 and the guaranteed portion typically is 75% of the loan. The guarantee waiver could save up to $131,250 in fees for the small business owner. This money could be used as the borrower’s required cash injection or for working capital.
An additional provision of SBA’s section 1112 also allows up to 3 monthly payments made by the SBA on the borrowers behalf. This is subject to the loan being approved by September 30, 2021 and availability of SBA funding. We have had multiple small business owners that purchased a business before or during Covid 19 and they benefited from the SBA making monthly payments on their behalf. Those SBA payments allowed companies to generate and hold on to working capital. This was a major relief for many small business owners.
If you are contemplating getting into small business now is a great time to move forward. SBA is offering these terms until September 30, 2021 so you need to hurry before this opportunity is gone. Feel free to contact me with any questions.
John S. Craig
1222 Rogers Ave. Ft. Smith, AR 72901
479-785-8437 office 479-785-1040 fax 479-461-4657 cell