SBA lenders blame high fees for drop in 7(a) loans.(Brief Article)

The dollar volume of loans issued through the Small Business Administration's (SBA's) flagship 7(a) loan program fell 6 percent in fiscal 2001, but SBA lenders do not blame the weakening economy for the decline.

Instead, they say high fees make the government-guaranteed loans. unattractive to both lenders and the small businesses that rely on the program.

"It's tough for me to market those loans," says John Brocato, president and CEO of New Orleans-based BizCapital, Louisiana's largest SBA lender.

Many lenders have dropped out of the SBA program over the past year, including Heller Financial, which was one of the nation's largest 7(a) lenders in fiscal 2000. In Louisiana, there were more than 100 SBA lenders a year ago; now there are only 20, Brocato says.

The future of the 7(a) program is especially important to …