What is an SBA Express loan?
- Loan amount. SBA Express loan maximums have been temporarily increased from $350,000 to $1 million. After Sept. 30, 2021, that maximum will be permanently reduced to $500,000.
- Interest rate. Lenders determine their own SBA loan rates but can’t exceed a cap set by the government. For Express loans $50,000 or less, rates can’t be more than the current prime rate plus 6.5%; it’s prime plus 4.5% for loans above $50,000. Those caps put maximum SBA Express loan rates between 7.75% and 9.75% as of this writing.
- Repayment term. Express loan repayment terms depend on the type of financing you choose and how you use it. Term loans can last up to 10 years, though real-estate purchases can be stretched to 25 years. For revolving SBA Express lines of credit, repayment is typically up to seven years but can be extended when you initially get the loan.
- Fees. SBA Express loan fees are waived through Sept. 30, 2021. You’d typically pay a one-time guaranty fee based on the size of the loan. These fees range from 2% to 3% of the amount the government guarantees if the Express loan defaults. Veteran-owned small businesses aren’t charged guaranty fees on Express loans.
- Approval time. As the name implies, the SBA aims to process Express loans quickly: It says lender-approved applications will receive a response within 36 hours.
SBA Express loan requirements
- Meet the SBA’s definition of a small business.
- Be a for-profit business operating in the United States or its territories.
- Have reasonable owner equity to invest.
- Have already put financial resources, such as personal assets, toward the business.
SBA Express loan vs. 7(a) loan
- Borrowing maximums are lower. While SBA Express loan maximums have been increased to $1 million through Sept. 30, 2021, that’s still less than the $5 million you may be able to borrow with a 7(a) loan.
- Rates may be higher. Both Express loan and 7(a) loan rates are tied to the prime rate. But the amount a lender can charge above that rate is greater for Express loans than for 7(a) loans. The maximum 7(a) rate is currently 8% versus 9.75% for an Express loan.
- Decisions are made faster. Getting approved for a federally backed loan can take time. The SBA speeds up this time frame for Express loans, providing a simpler process for lenders and responses within 36 hours, compared with 5 to 10 business days for 7(a) loans.
- Less of the loan is guaranteed. If you default on an SBA loan, the government will pay the lender up to 85% of the outstanding balance for 7(a) loans. This guarantee is usually 50% for Express loans, but has been increased to 75% until Sept. 30, 2021, for Express loans of $350,000 or less.
How to get an SBA Express loan
How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.