The SBA Express loan is similar to the 7(a) loan but has faster loan approval times. Here's everything you need to know before applying for an SBA Express loan.
Erica began writing on small business topics in 2008. She joined Merchant Maverick in 2018 and focuses on loans, accounting, and POS. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll. She has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a graduate of Limestone University and resides in Greenville, South Carolina.
WRITTEN & RESEARCHED BY Erica Seppala Erica began writing on small business topics in 2008. She joined Merchant Maverick in 2018 and focuses on loans, accounting, and POS. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll. She has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a graduate of Limestone University and resides in Greenville, South Carolina. Editor & Senior Staff Writer
Chelsea Krause is a writer who specializes in accounting, payroll, and small business loans. She has been with Merchant Maverick helping small business owners manage their finances since 2016. She is a QuickBooks Certified User and former eCommerce store owner. Her accounting expertise has been quoted in Forbes and her work appears in Startup Nation, Small Business Bonfire, and Women on Business. Chelsea graduated summa cum laude with a BA in English & Creative Writing from George Fox University and studied abroad at the University of Oxford as well. She currently resides in Boise, Idaho.
REVIEWED BY Chelsea Krause Chelsea Krause is a writer who specializes in accounting, payroll, and small business loans. She has been with Merchant Maverick helping small business owners manage their finances since 2016. She is a QuickBooks Certified User and former eCommerce store owner. Her accounting expertise has been quoted in Forbes and her work appears in Startup Nation, Small Business Bonfire, and Women on Business. Chelsea graduated summa cum laude with a BA in English & Creative Writing from George Fox University and studied abroad at the University of Oxford as well. She currently resides in Boise, Idaho. Lead Staff Writer
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In June 2024, the SBA announced plans to launch a new working capital pilot program. This new program will provide revolving lines of credit up to $5 million for eligible borrowers. The program is designed to make lines of credit more accessible and affordable than CAPLines or SBA Express lines of credit. Merchant Maverick will continue to monitor the status of this program and will provide updates after it goes live.
Businesses that want a low-interest, long-term loan with fast approval times should look to the SBA Express loan. This loan offers many of the benefits of other SBA loans with the added bonus of guaranteed 36-hour approval decisions. Keep reading to learn more about the SBA Express loan program.
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The Small Business Association (SBA) is a government agency that provides resources and support for small businesses. The SBA provides counseling, educational materials, and capital to small business owners. The SBA is best known for its loan programs, which provide low-cost, long-term loans to businesses that may not qualify for traditional funding.
The SBA works with partner lenders known as intermediaries to provide funding opportunities to small businesses. The SBA guarantees a portion of each loan, taking some of the risks off of lenders so that they are more willing to loan money to small business owners. The SBA also has standards in place that regulate interest rates and terms for these loans.
The SBA Express loan program provides up to $500,000 to eligible small business owners. Funds from the loan can be used for nearly any business purpose, from equipment to working capital.
The SBA Express loan stands out from other SBA loan programs due to its short turnaround times. Loan approval is guaranteed within 36 hours. However, loan approval and disbursement of the funds may take weeks or even months.
SBA Express loans offer very competitive rates and terms.
Maximum borrowing limits for Express loans are $500,000. Express loans are available as term loans or revolving lines of credit.
Interest rates for Express loans are the prime rate plus a markup of 4.5%-6.5% and are based on the amount borrowed.
Term lengths are up to 25 years for commercial real estate. Maximum term lengths are 10 years for all other purposes. Maximum term lengths are 10 years for revolving lines of credit.
The SBA 7(a) program is the most well-known SBA loan program. While similar to SBA Express loans, there are a few distinct differences between Express loans and 7(a) loans.
SBA Express loans have maximum borrowing limits of $500,000. Businesses that need access to more capital should consider taking out a 7(a) loan, which provides up to $5 million.
The SBA guarantees up to 85% of an SBA 7(a) loan, while guaranteeing only a maximum of 50% of an Express loan.
As a result, interest rates are lower for 7(a) loans. Interest rates for the 7(a) loan are the prime rate plus a markup of 2.25%-4.75% based on the amount borrowed and term length.
Interest rates for the SBA Express loan are the prime rate plus a markup of 4.5%-6.5%.
The biggest advantage of the SBA Express loan is that a loan approval decision is guaranteed within 36 hours. The average turnaround time for loan approval for a 7(a) loan is 5-10 business days. Businesses that want to know if they’re going to receive a loan or if they need to seek alternative options should apply for the Express loan.
One final thing to remember is that even though an approval decision is faster with an Express loan, the entire funding process can still take several weeks or longer from start to finish.
There are two types of SBA Express loans. The type of business you operate can help you determine which loan option is right for you.
The standard SBA Express loan can be structured as a term loan or revolving line of credit. It can be used for nearly any purpose, including:
This loan is ideal for most small businesses, provided all SBA and lender requirements are met.
If your business deals in exports, the SBA Export Express loan may be a good option for you.
The SBA supports American export activity through the SBA Export Express loan program. While other SBA loan programs guarantee 50% to 85% of the loan amount, the SBA Export Loan guarantees a maximum of 90% of the loan.
Loan proceeds can be used for financing direct or indirect export activities, as well as for other business purposes. An approval decision is guaranteed within 24 hours. Interest rates, terms, and borrowing limits are the same for SBA Express and Export Express loans.
To qualify for SBA Express loans, there are several requirements of the SBA and the lender that must be met.
In order to qualify for an SBA Express loan, you’ll need to meet the basic requirements of the SBA. Your business must:
Your business must also be in an eligible industry. Ineligible industries include:
To receive an SBA loan, including the Express loan, you must have a good personal credit score and history. While credit requirements vary by lender, a minimum credit score of 680 gives you the best odds of qualifying.
You must be prepared to explain any negative items on your credit report, including late and missed payments. Foreclosures, bankruptcies, and previous defaults on government loans may prevent you from receiving an SBA loan.
Collateral is not required for loans up to $25,000. For loans above this amount, collateral (typically in the form of business assets) may be required.
A personal guarantee is required and must be signed by every owner that has at least a 20% stake in the business. This personal guarantee will hold the owners personally liable for the debt if the loan goes into default.
To qualify for an SBA Express loan, you’ll need to prove to the lender that you’re able to repay the loan. You’ll need to provide documentation to show ownership and the financials of your business. While requirements vary by lender, you should gather documents like:
Startups and new businesses may need to provide alternative documentation, including business plans, proof of industry experience, and financial projections.
There are several ways to apply for SBA loans:
Once you’ve found a lender, you’ll move forward with the application process. The lender will verify your documentation, check your credit score, and provide a loan approval decision within 36 hours.
After approval, processing your loan and disbursing funds generally takes around 30 to 90 days.
The low interest rates and long repayment terms of SBA Express loans are appealing, but it’s the fast approval decisions that make these loans really stand out. Businesses that meet lender and SBA requirements and don’t need more than $500,000 should consider applying for an SBA Express loan.
If this option isn’t a good fit, there are plenty of other SBA loans to choose from. The Standard 7(a) loan is one of the most popular choices. SBA Microloans are a great fit for businesses that need loans of $50,000 or less, while the CDC/504 loan is ideal for large real estate purchases. No matter what you decide, don’t forget to do your research and take the time to determine which is the best SBA loan for your business.
Erica began writing on small business topics in 2008. She joined Merchant Maverick in 2018 and focuses on loans, accounting, and POS. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll. She has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a graduate of Limestone University and resides in Greenville, South Carolina.
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