WASHINGTON — The Small Business Administration recently defended its zero subsidy enacted two years ago, saying the transition has not led to a decline in the agency's 7(a) lending program.

From fiscal year 2005-2006, the first two years of the zero subsidy, 7(a) loan approvals were at 95,900 in FY 2005 and 97,290 in FY 2006, according to SBA. Those numbers are higher than approvals for periods between 2000 and 2004, with the average loan approval volume at 57,362 loans and 81,333 in fiscal year 2004 alone. Going back even further, the agency said from 1990 through 1999, the average loan approval volume was 50,181 with the highest level recorded during that time in 1995 at 55,597 loans.

The SBA also reiterated that 7(a) program fees "are exactly the same as they have been for 20 of the past 22 years." After the Sept.11 attacks, Congress temporarily reduced some fees including the fee on loans under $150,000 reduced from 2% of the guaranteed amount to 1% and the fee on loans between $150,000 and $700,000 reduced from 3% of the guaranteed amount to 2.5%, the agency said.

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