City National Bank Cuts Small Business Loan Fees

Moving to try to help small businesses, BizFed member City National Bank announced this week that it will pay half of the standard loan guarantee fees, up to $3,000, for Small Business Administration loans in order to encourage lending.

Standard loan fees range between 2 percent to 3.75 percent of the guaranteed portion of a small business loan.

Last year's federal stimulus legislation authorized the SBA to significantly reduce or eliminate certain loan fees and hike the guarantee on eligible SBA loans to 90 percent. Since the program expired, SBA lending has dropped by roughly 70 percent nationwide. That's hamstrung small businesses in their efforts to expand, City National business banking manager Jim Wullschleger said in a statement.

"And that comes at a time when small businesses -- typically a key employment driver -- have a vital role to play in our economic recovery," he said.

Proposed legislation to extend the fee incentives has been delayed until Congress reconvenes in mid-September.

To qualify for the fee reduction, loan applications must be received by Sept. 10 and loans funded by Dec. 31. Loan applications can be made by calling 800-722-5945.

Los Angeles-based City National has 80 banking offices in California, Nevada and New York.