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OTHER NEWS - Jan. 27, 1995

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<i> Times Staff and Wire Reports</i>

Government May Cut Back on Loan Guarantees: It could also increase the fee it charges lenders for the pledge on small-business loans. Those would be the effects of proposals the Small Business Administration and SBA lenders offered to bridge a projected budget gap in the government’s flagship small-business loan guarantee program. The proposals were presented at a hearing of the House Small Business Committee. The SBA currently guarantees as much as 90% of a loan’s value, and its so-called 7(a) loan program has been under increasing budgetary pressure. The value of loans generated under the popular program more than doubled between 1991 and 1994. Lenders proposed reducing to 75% the portion of all loans that the SBA guarantees.

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