Banks and borrowers are missing out on SBA loans.
What's going on here?
Fewer SBA 7(a) loans are being approved this year than they were during the previous two years.
Through December 16th , the SBA approved $2.8 billion in government-guaranteed loans though its flagship 7(a) program this fiscal year, which began October 1st. During the same period a year ago, the SBA had approved $6 billion in 7(a) loans. Two years ago, the SBA had approved $3.1 billion.
The spike in volume was driven by stimulus act incentives such as the higher guarantee and guarantee fee waivers which has expired.
Even without the enhanced guarantee and guarantee fee waiver, SBA 7(a) loans still offer lenders a very profitable lending platform and borrowers long term, fully amortizing loans that can be used for real estate purchase, real estate debt refinance, business debt refinance, business acquisition, equipment purchase and working capital.
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