504 fee waivers are back

President Obama signed the U.S. Department of Defense (DOD) appropriations bill on Saturday. It included $125 million to continue the enhancements made possible through the American Recovery and Reinvestment Act (ARRA) to SBA's 7(a) and 504 loan programs. The SBA estimates the additional funding will support $4.5 billion in small business lending.

New approvals of loans with the 504 first mortgage lender fee and the CDC loan processing fee paid for by the ARRA are expected to begin by Dec. 28. Loan applications from borrowers who chose to be placed in the SBA's Recovery Loan Queue will be approved by SBA first, followed by new loan approvals beginning on or before Dec. 28.

The fee relief is authorized until this additional funding is exhausted or the end of the fiscal year (September 30, 2010), whichever comes first. As was the case in November, SBA will transition into a queue system as the funds start to wind down in order to ensure the maximum stimulative effect of the programs and disbursement of funds.

This extension does not provide a retroactive guarantee or waived fees for non-ARRA 504 loans approved by SBA during the transition period. Loans that were approved under non-ARRA terms cannot be canceled and resubmitted to take advantage of the ARRA extension provisions.

Once Congress returns to Washington for the start of the next session in January, attention will turn to the Commerce - Justice appropriations bill, H. R. 2847, which is also known as the Jobs Bill. This legislation contains an additional $354 million for fee offsets for the two SBA loan programs. It has passed both the House and the Senate, and now must be "conferenced" by the Appropriations Committees. We expect this to occur in January or early February, and hope that this bill would be passed in final form before the funds from the DOD spending bill run out.

Evergreen Business Capital will keep you informed of any further actions regarding funding of these fees.