ValueXpress is experiencing an extraordinary flow of SBA 7(a) applications that is expected to continue through yearend. The demand for 7(a) loans is a result of the combination of fee waivers, higher guarantees (90% versus 75%) and higher loan limits for borrowers ($5 million). ValueXpress received its first SBA approval for a loan with a guarantee greater than the former limit of $1.67 million last week. In addition, ValueXpress expects approval of a $5-million loan with a $4.5-million guarantee this week. The savings from the fee waiver will be $157,500, a huge savings for the borrower. Both transactions were refinances that will result in significant payment savings for the borrower. One transaction featured a discounted payoff of the prior lender, which is difficult to get approved.
“We have been in contact with as many borrowers as possible to stress the benefits of getting loans approved before the fee waiver ends,” explains Michael D. Sneden, Executive Vice President of ValueXpress. “The amount of savings is substantial, and the savings is getting borrowers to move quickly on their applications. It is important to note that the loan does not have to close by the end of the year; it just needs to be approved by then. And the SBA allows up to one year to close approved loans.”
Although the fee waiver technically runs through the end of the year, it will end early if funds run out. And it is expected that funds will run out by the end of November, so borrowers should move now.