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SBA Guarantee Fee Coming Back…
| Guest post by: Joe Ferriolo |
Article Overview: It was recently announced that the SBA may be implementing the SBA guarantee fee again.
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Free Download - What affects your credit score? By Joe Ferriolo |
SBA Guarantee Fee Coming Back…
It was recently announced that the SBA may be implementing the SBA guarantee fee again.
"On November 23, 2009, the SBA will begin the transition period from two of its Recovery Act programs. The funds made available from the Recovery Act eliminated the upfront guaranty fee for loans with maturities greater than 12 months as well as provided higher SBA guaranties to lenders for most 7(a) loans.
The purpose of this transition period is to:
maximize the stimulative effect of the money that Congress appropriated for this purpose; accommodate the fact that it is likely some Recovery funding may still be available to support some loans under these two Recovery programs due to cancellation or non-disbursement of previously approved loans; and provide lenders/borrowers with a degree of choice between submitting a loan application as a non-Recovery Act loan or submitting the application as a Recovery Act loan.
Check back on November 23 - the day the transition period begins."
How is the guarantee fee calculated?
The guarantee fee is calculated as such:
Loan amount multiplied by 75% = X; X multiplied by 0.02% = guarantee fee
(i.e.) $20,000 x 75% = $15,000; $15,000 x 0.02 = $300 guarantee fee
Usually the guarantee fee is subtracted from the loan amount at the time of funding.
Some exceptions may apply to the formula above.
Source: SBA.gov
What does this mean?
It means it is wise to start acquiring your SBA funds as soon as possible.
Wise Man Finance
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Article Tags: act programs, borrowers, disbursement, guarantee fee, guaranties, guaranty fee, lenders, loan application, man finance, maturities, p check, recovery act, sba funds, sba guarantee, span style, style text, text decoration, transition period, upfront, wise man
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About the Author: Joe Ferriolo RSS for Joe's articles - Visit Joe's website Joseph Ferriolo has been in the financing industry for 15+ years. To say the least, he has seen a lot of changes over this time. Each passing year has enabled him to see new ways and avenues of making loans work. He started in large traditional banking institutions doing credit analyses and underwriting. He eventually, took his experience in finance and put his passion into creating his own business ventures. He found that a lack of cash flow can stop a successful business in its tracks. This is why he developed a company that helps business owners obtain financing for their small business. He commonly says "getting a loan has become an art form. Simple mistakes can stop your business from getting the capital you need to get through the slow seasons." Learn and benefit from his ventures, mistakes and life experiences in business financing.
Joseph Ferriolo CEO of Wise Man Finance Click here to visit Joe's website   Business Credit Cards versus Personal Credit Cards ARC Loan in Jeopardy SBA Should I use personal credit to fund my business How to Speak With a Business Underwriter Should I ask that my loan application be submitted as a Recovery Act loan |
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