Wednesday, April 10, 2013

SBA loans are good for the economy

President Obama's FY 2014 budget contains positive news for the nation's job-creating small businesses that will benefit from increased access to capital under SBA's flagship 7(a) business loan program to start, build and grow their businesses.

"Small business loan guarantees are funded at levels above historical demand, but at a greatly reduced subsidy cost from the 2012 enacted level and the 2013 Budget level, largely due to the improving economic forecast and lower estimated loan defaults." 

For the 7(a) program, the return to a zero subsidy rate removes the need to seek appropriations and allows a lowering of the ongoing lender fee to 52 basis points (.52 from .55) for FY 2014.

To encourage economic growth and job creation, the Budget provides $112 million in subsidy for SBA's business loan programs. This funding supports $17.5 billion in 7(a) loan guarantees.

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