SBA Loans Jeopardized By Fee Spat

Whether or not small businesses turn to Small Business Administration loans for help, there seems to be a fight brewing between SBA and bankers.

Fewer small business types have turned to SBA loans as the economy continues to threaten everyone. High gas and grocery prices take an everyday toll, possibly one a business thinks will keep prospective customers from patronizing them.

If there is no anticipation of a decent return on what a loan could provide, like an expansion in storage space or additional staffing, small businesses may be unwilling to take that risk. A recent report at MLive said the number of SBA loans is down 16 percent compared to the same period a year earlier.

Changes in the SBA program may be affecting lenders who might normally refer a small business client to it. Fees formerly paid by SBA for loan origination have been passed along to lender and borrowers.

That was SBA’s choice, one that the report said could change if Congress approves a plan pushed by Senator John Kerry to put $150 million back in the SBA’s hands. Small businesses should keep an eye on that if they think a loan might be in their futures.