Veteran-owned businesses won't have to pay any fees on loans under $350,000 backed by the Small Business Administration starting Jan. 1, under a new initiative aimed at encouraging veterans to start new businesses or expand existing ones.
That comes on the heels of a recent SBA decision to waive fees on all SBA loans under $150,000, starting Oct. 1. These changes are expected to save small businesses hundreds of dollars in fees. SBA loans are made by banks and other lenders and are partially guaranteed by the federal government.
"Veterans have historically shown an entrepreneurial spirit," said Richard Zilg, SBA deputy district director for New Jersey. "A lot of veterans come home and come out of the service, and they are interested in starting businesses. Or maybe the veteran is a reservist who had a business and now they're coming home, and (an SBA loan) helps them reactivate their business."
SBA officials say they want to increase loans to veterans, which accounted for 56 of the more than 1,000 SBA loans made to New Jersey businesses in the fiscal year that ended Sept. 30.
The Small Business Administration has not specified how many new loans it would like to make to the state's veteran-owned businesses, but officials are asking New Jersey's SBA lenders to target these companies when they do their marketing.
And Zilg said waiving the fees for those loans could help the SBA's outreach efforts, too.
"(It's) a way of helping those people who have helped our country to establish businesses and expand the businesses they already have," he said.