In a significant update for small business owners and entrepreneurs, the Small Business Administration (SBA) has announced an increase in guarantee fees for SBA loans. This change, effective immediately, could have a profound impact on your business financing plans. As a seasoned expert in SBA lending, I want to break down what these changes mean for you and your business.

Understanding the New SBA Guarantee Fee Structure

The new guarantee fee structure applies to all loan amounts except for those ranging from $0 to $150,000, which remain unchanged. For loans exceeding this amount, the fees have been adjusted as follows:

• Loan amounts from $150,000 to $700,000: Fee increased from 2.75% to 3%
• Loan amounts from $700,000 to $1 million: Fee increased from 3% to 3.25%
• Loan amounts greater than $1 million: Fee increased from 3.5% to 3.75%

These increases, particularly the jump from 3% to 3.25% for loans between $700,000 and $1 million, represent a significant change in the cost structure of SBA loans. As a business owner, understanding these fees is crucial for your financial planning.

The Impact of Layoffs at the SBA

Along with the increase in fees, the SBA is also undergoing significant changes, including mass layoffs. While this may raise concerns about the speed and efficiency of loan processing, there is some hope. If you are working with a Preferred Lender (PLP), which conducts its underwriting in-house, you may not experience a substantial delay in processing times.

However, those dealing with non-delegated lenders may face slowdowns, as they send files to the SBA for underwriting. This change could affect your financing plans, especially if you are in the middle of a deal. Being proactive and working with a PLP can help mitigate some of these challenges.

Future Changes: Loan Limits and Business Incentives

Looking ahead, there are discussions about increasing the loan limits, which have not changed since 2010. The potential increase from $5 million to $7.5 million or even $10 million could provide more opportunities for business owners seeking larger loans to fund their ventures.

Additionally, there is hope for new business incentives that could stimulate the economy. These changes are vital for entrepreneurs looking to start or expand their businesses. By staying informed and engaged, you can position yourself to take advantage of these developments.

What to Do If You Have a Deal in Process

If you currently have a deal in process, it is crucial to act quickly. The new fees are set to take effect immediately, and you want to ensure that your financing plans are not adversely affected. If you have a Letter of Intent (LOI) or are working towards one, consider scheduling a meeting with me to discuss your options.

Being proactive in these situations can save you money and time. Don’t hesitate to reach out for guidance on how to navigate these changes effectively.

Free Resources for Business Growth

As a business owner, you may also be interested in ways to grow your business without incurring massive overhead costs. I have created a free ebook that focuses on utilizing virtual team members and AI to enhance productivity. This resource is designed for entrepreneurs looking to scale their operations without significantly increasing their workforce.

Visit bisscalingplaybook.com to download your copy and start leveraging the tools that can help you grow your business organically.

Conclusion

The recent changes in the SBA guarantee fees and the ongoing shifts within the agency present both challenges and opportunities for business owners. Understanding the new fee structure, the implications of layoffs at the SBA, and potential future changes can help you navigate this landscape effectively.

As always, I encourage you to stay informed and engaged in the business community. Join us at the upcoming Business Ownership Summit on April 26 and connect with other entrepreneurs who are navigating similar challenges. For more resources and to stay updated on financing options, subscribe to my channel and visit my website for additional insights.

Thank you for taking the time to read this article. Let’s work together to ensure your business thrives, even in changing times.