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U.S. military veterans will have an easier time borrowing money for their businesses during the next year, thanks to a reduction in fees from the Small Business Administration.

After earlier announcing that it would waive all fees for all borrowers of its Express Loan Program from January to September 2014 on loans of up to $150,000, the SBA declared a week later that it would also waive initial fees for veterans on loans of up to $350,000. Currently those fees average about $4,000 a loan and can be as much as three percent of the loan value.

“Our nation’s veterans are highly-skilled and highly-trained leaders in their communities,” said Acting SBA chief Jeanne Hulit in a press release. “This initiative will set fees to zero for SBA Express loans to veterans up to $350,000, and is part of SBA’s broader efforts to make sure that veterans have the tools they need to start and grow a business. As we honor our veterans and thank them for their service and sacrifice, let’s continue to identify ways to support them when they come home.”

The SBA expects the fee reduction to help many veterans as a majority (75 percent) of business loans made to veterans now are less than $350,000. Last year it backed $1.86 billion in funding to more than 3,000 former military business owners. That amount represents a doubling of dollars to veterans since 2009.

At the same time though the number of veteran-owned operations has decreased, something the SBA would like to reverse. In 2012, there were 1.7 million businesses headed by veterans, down from 1.9 million in 2008.

The SBA does not make business loans, but guarantees them reducing the risk to private lenders from defaulting borrowers. With the Express Loan Program, it backs up to 50 percent of the loan value. It is designed to get business owners money quickly, with all applications being reviewed within 36 hours.


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