What Is An SBA Express Loan?

SBA Express Loans are available through the U.S. Small Business Administration (SBA). They feature a streamlined application process, and you’ll generally receive a lending decision within 36 hours of submitting a completed loan application.

What Can You Use the Funds For?

The loan proceeds from an SBA Express product can be used for business-related expenses to prevent interruptions in cash flow. You can also refinance existing debt (limitations apply), cover the costs of an ownership change in an existing business, and procure real estate for your company.

Types of SBA Express Loans

Standard SBA Express Loans

SBA Express Loans are available to qualified businesses through SBA-approved banks and lenders. You could get approved for up to $350,000.

SBA Export Express Loans

As the name suggests, this loan program is ideal for entities in the exporting industry. Loan amounts on offerings from the SBA Export Express loan program are limited to $500,000, and you’ll generally get a response from the SBA in 24 hours.

SBA Express Repayment Terms

Revolving Loans/ Lines of Credit

The repayment period on SBA Express lines of credit is limited to 10 years, including both the draw period and the term-out period. The latter is the span of time you repay what you borrow, but draws aren’t permitted.

However, the repayment period on revolving loans is different. You can opt for a renewable 12-month period, excluding a term-out window. If the term exceeds 12 months, the term-out period must be equal to or greater than the draw period. Furthermore, draws are prohibited in either case following a 60-month window.

Term Loans

The repayment terms on SBA Express term loans vary by how the funds are used. Here’s a breakdown of the guidelines:

Up to 10 years for working capital and inventory loans
Up to 10 years for loans used to finance intangible assets
Up to 10 years for leasehold improvements (with an extension of up to 12 months to complete the necessary renovations)
Up to 10 years for equipment, furniture and fixture loans (or 15 years in some instances)
Up to 25 years for real estate acquisition, construction, rehabilitation and renovation loans (quick note: construction and renovation loans may qualify for an extended-term)
Up to 25 years for mixed-purpose loans

SBA Express Loan Interest Rates and Fees

The SBA sets a maximum rate and fee limit on Express Loans. You could get a fixed or variable rate, but some loans have a combination of both.

For loan amounts of up to $50,000, the interest rate must not exceed the prime rate plus 6.5 percent. If the loan exceeds $5,000, the interest rate is capped at the prime rate plus 4.5 percent.

Regarding fees, SBA 7(a) loans approved anytime between October 1, 2020, and September 30, 2021, come with an annual service fee of 0.55 percent. If your company is classified as a veteran-owned business, you won’t pay an upfront guarantee fee. Depending on the loan amount, you’ll pay a one-time guarantee fee between 2 and 3 percent for all other SBA Express loans.

How Do You Qualify for an SBA Express Loan?

You could be eligible for an SBA Express Loan if you meet the following criteria:

You’re a for-profit business operating in the U.S. and meet the SBA’s size standards for a small business.
You operate in an industry that the SBA deems eligible for SBA Express Loans (i.e., not a business that’s considered passive in some instances).
You don’t have unresolved federal tax or student loan debt.
Your credit history is acceptable per the SBA’s standards. (Note: The SBA doesn’t have a minimum credit score requirement, but most lenders prefer credit scores of 680 or higher). Ideally, you should also be in business for at least two years and have a steady revenue stream before applying.
Your criminal history doesn’t disqualify you for funding.
At least 50 percent of your company is owned by a U.S. citizen or permanent resident.

Also, keep in mind that the SBA could require collateral for Express Loans over $25,000.

SBA Express Loan Application Process

If you’re a good fit and would like to apply for an SBA Express Loan, here’s what you can expect:

Step 1: Contact an SBA-approved SBA Express lender to get started. You can explore your options through an online platform like National Business Capital, which lets you view several offers in one sitting without impacting your credit score. Alternatively, you can use SBA.gov’s Lender Match tool to locate lenders in your local area. You’ll need to enter your full name, email address, and phone number and indicate if you’re a new or existing user to get started. After hitting submit, you’ll receive a PIN via email that must be entered into the Lender Match tool to continue with the lender search.
Step 2: Once you’ve compared your options, reach out to the lender you’re most interested in doing business with to learn more about their application process for SBA Express Loans.
Step 3: Next, you’ll work directly with your lender to prepare your loan application. They’ll notify you of any documentation requirements, advise you on the next steps, and provide any additional support you need during the process.
Step 4: Upon completion, the lender will submit your application. The SBA will provide a lending decision within 36 hours. And if approved, you’ll continue working directly with the lender to repay and manage your loan.

It’s important to understand that a rapid lending decision doesn’t mean your loan will be funded right away. In fact, it could be some time before loan proceeds are disbursed – up to two months in some cases. So, it could be best to explore alternative funding sources if you need money sooner.

Pros and Cons of SBA Express Loans

Benefits of SBA Express Loans:

The application process is streamlined, and you generally won’t need a ton of documentation to get the process started.
Your business may be eligible for a loan with a competitive rate if you cannot secure a loan from other financial institutions.
You’ll get a lending decision within 36 hours.