Good news has arrived for former military members looking to start or grow their own small business. Recently, the Small Business Administration revealed that they will waive initial borrower fees for veterans who acquire loans next year through the Express Loan Program, which supports small-business loans amounting up to $350,000.
Although the SBA currently charges up to 3 percent of the value of loans, agency officials had stated that they would waive fees in the coming year for loans amounting up to $150,000. The latest announcement to waive veterans’ borrower fees simply raises the initial cap on loan amount. This news was revealed at the end of National Veteran Small Business Week, which is an annual event where agency officials travel across the country to provide mentoring services to veterans who already operate or are looking to start a small business.
One of the agency’s primary responsibilities has been to support small businesses owned by veterans. Throughout the past year, the SBA helped award $1.86 billion in loans to over 3,000 veteran business owners. While the majority of those loans are granted by banks, credit unions and other private lenders, a partial guarantee is also offered from the government.
Loans granted through the Express Loan Program are eligible for up to a 50 percent guarantee from the SBA. Agency officials will make their decision on an application in 36 hours or less. Initiated back in 2004, the program involves much less paperwork and processing obstacles than those used to grant larger loans through the agency.
According to agency officials, approximately three-fourths of SBA loans granted to veteran-owned businesses amount to $350,000 or less. As a result, many veterans searching for loans to support their small business ventures next year would end up saving some money. In spite of slow economic recovery efforts, SBA officials announced that the department’s lending programs provided valuable support to entrepreneurs in need of capital funding. Although the recession had negatively impacted small business lending across the country, the department’s lending programs had backed nearly $30 billion in loans in fiscal year 2013.
As more and more veterans receive loans to help launch and grow their small businesses, many may still encounter financial obstacles in the future. Instead of depending on bank loans to help fund and grow their ventures in the long run, veterans can turn to small business factoring as an effective alternative. Small business factoring can help accelerate cash flow, reduce expenses, and eliminate bad debt. Factoring for small business adds ZERO debt to your balance sheet, so there is no loan to repay. With same-day funding and no hidden fees attached, small businesses can benefit greatly by factoring their invoices. Improve your financial condition and help your business grow by requesting a fast and free quote online today.