The Return of the SBA Loan?
We do a good amount of work for banks that are extending SBA Loans (the SBA lending SOP requires a 3rd party valuation any time goodwill exceeds $250,000). But over the past few years the various SBA loan programs have been in a huge state of flux. But are they returning to “normalcy?”
Clearly the government wants to promote these programs- after all its a well recognized fact that small business tends to be the “engine” that drives the economy.
One way that the SBA is seeking to increase loans underwritten is by waving their fees on certain loans. Banks tend to make more money on larger loans – the loan itself is larger, but underwriting costs associated with the loans are essentially the same as small loans. That’s where the SBA’s fees come in – by waiving some of those fees, the hope is to make the lower end of the market more profitable (ie more attractive) for banks to pursue.
Here’s to hoping that works out – we love to see it when the little guy has a chance to succeed!