Cyndia Zwahlen of The LA Times interviewed the new chairwoman of the House Small Business Committee, Nydia M. Velazquez (D-N.Y.), a 14-year member of the panel who was sworn in to lead it this month.
One of the most interesting exchanges was as follows:
How will you make changes at the SBA?
We want to modernize some of the programs. We need to revamp the disaster loan program. I also want to take steps to ensure small firms can access capital through the SBA 7(a) loan program. Thirty percent of all long-term financing in this country is done through 7(a) loans. We want to lower the fees that they have to pay. You can find small firms paying up to $50,000 on larger loans.
Personally, I couldn't agree more with the need to lower SBA loan fees. When I propose the SBA as an option to clients, I usually hear complaints about the time it takes to gain approval and the high fees. I understand that the SBA will often support business loans that no other institution will fund conventionally. But the sticker shock of the SBA up-front loan fees and the impact it has on the all-in borrowing rate often eliminate it as a viable alternative in the eyes of many business borrowers.
What's been your experience with SBA fees?
Related Tags: LA Times, SBA, business loans, 7(A)loan, House Small Business Committee, Nydia M. Velazquez
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