SBA Express Loans: What They Are & How to Apply

Table of Contents

An SBA Express Loan is a loan from the Small Business Administration that’s designed for entrepreneurs who want to quickly access capital. It usually comes with low interest rates and quick approval times, so it can be applied toward anything related to starting or expanding your company.

The “sba express loan requirements” is a type of loan that is given to small businesses by the Small Business Administration. These loans are usually for up to $350,000 and can be used for a variety of purposes. They are also called SBA Express Loans.

In comparison to an SBA 7(a) loan, an SBA Express loan offers up to $350,000 in funding and is appropriate for firms looking for a lower amount of working capital or equipment finance more rapidly. SBA Express loans generally have a 10-year duration and interest rates that are 4.5 percent to 6.5 percent over prime. They also have less paperwork requirements and, on average, shorter approval timelines than 7(a) loans, with funding times ranging from 30 to 90 days.

Consider utilizing South End Capital if you intend to apply for an SBA loan. SBA loans are available from South End Capital, and it can approve loans for company owners with credit ratings as low as 650, with financing available in a matter of weeks. Contacting a loan officer is a simple procedure that only takes a few pieces of information.

South End Capital is a place worth seeing.

How to Apply for a Small Business Administration (SBA) Express Loan

SBA Express loans are available from both regular banks and non-traditional lenders. It might be tough to determine which lender to pick due to the enormous number of prospective lenders available. If you’re not sure where to begin, check out our list of the best SBA lenders. SBA loan options, including SBA Express loans, are available from several of these institutions.

The loan criteria for an SBA Express loan are comparable to the SBA 7(a) loan standards. While your lender has the freedom to choose the elements it uses to evaluate creditworthiness, the SBA will take your credit score and capacity to repay into account. The following are the minimum SBA Express loan requirements:

At least a 680 credit score is required.
Debt service coverage ratio (DSCR) of 1.25 or greater indicates repayment capacity.
Positive sales trends and profitability are required, and your company must be profitable.
Collateral: For loans up to $25,000, personal or business collateral sufficient to cover 100 percent of the loan amount may be needed by your lender; for bigger loans, your lender may demand personal or company collateral sufficient to cover 100 percent of the loan amount.

Our step-by-step guide to applying for an SBA loan will walk you through the whole procedure. Understanding what documentation SBA Express lenders demand and preparing them ahead of time will help you not only speed up the approval process but also enhance your chances of being approved. We’ve created a free SBA loan paperwork checklist for you to utilize to help the application process go more smoothly.

The following is a list of documents you may require to apply for an SBA Express loan:

Application for an SBA loan
Plans for the money from the loan
Profit and loss (P&L) statement
Budget forecasts over the next three years
Signed company tax returns from the previous three years

History of loan applications
Owners and connections are shown below.
The company’s history and a high-level overview
All leases, licenses, and certifications for businesses

Furthermore, all shareholders with a 20% or greater ownership in the corporation must include the following:

If you wish to use SBA funding to buy an existing firm, you’ll need to produce the following paperwork for the company you’re buying:

Balance sheet as of now
Current P&L statement
The business’s income tax returns for the previous three years
The proposed conditions of sale or a bill of sale
A list of the inventory, machinery, furniture, fixtures, and other items that will be sold.

The time it takes for a lender to underwrite a loan varies depending on the lender. However, completing a comprehensive loan file and reacting quickly to lender requests for more information might assist speed up the approval process. Lender approval may take as little as 30 days, but it might take up to 90 days if there are delays in underwriting. Before you apply, find out how lengthy your lender’s approval times are on average.

Terms of an SBA Express Loan & Rates

The SBA Express loan has a speedier SBA review process, which is generally 36 hours after your lender’s preliminary approval. This flexible financing option may be utilized for working capital term loans, a line of credit, or commercial real estate term loans. Your lender may request collateral, as with all SBA loans. Lenders aren’t obliged to accept collateral for loans under $25,000, but they may utilize their current collateral policy for loans between $25,000 and the program’s $350,000 cap.

Terms of an SBA Express Loan

Terms of an SBA Express Loan are designed to match the expected life of the collateral backing the loan. The maximum Terms of an SBA Express Loan are:

Lines of credit: Up to ten years—advances are authorized for up to five years, after which the line of credit is re-termed for another five years.
Term loans for inventory or working capital: up to ten years
Term loans for equipment, fixtures, or furniture: 10 years or the usable life of the collateral, but not more than 25 years
Term loans for leasehold improvements are available for up to ten years.
Term loans for real estate: up to 25 years

Interest Rates for SBA Express Loans

As of November 2021, the maximum interest rates for SBA Express loans are:

Prime + 6.5 percent = 9.75 percent on loans up to $50,000
Prime + 4.5 percent = 7.75 percent on loans above $50,000

For variable rate SBA Express loans, your lender may use any base rate to determine your interest rate as long as it’s comparable to the rates charged for similar non-SBA insured loans. Regardless of how the rate is calculated, your lender’s maximum interest rate cannot exceed Prime + 4.5 percent to 6.5 percent.

Export Express Loans from the Small Business Administration

The SBA Export Express loan program offers up to $500,000 in funding to firms looking to start or develop their export company. Another distinction between the Export Express program and the ordinary SBA Express program is that Export Express loans are insured at 90% up to $350,000 and at 75% beyond that level.

SBA Export Express lenders employ their own credit judgement and loan documents, while the SBA offers a 24-hour accelerated eligibility assessment. The finances must be put to good use in order to improve the company’s capacity to export products and services. Collateral requirements for non-SBA-guaranteed loans are depending on the lender’s regulations and procedures, as they are for other forms of export finance.

Terms of an SBA Export Express Loan

The length of time you have to repay an SBA Export Express loan depends on the kind of loan (line of credit vs. term loan) and the type of collateral you have. The following are the maximum loan terms for an SBA Export Express loan:

Credit lines: up to seven years
Term loans for inventory or working capital: up to ten years
Term loans for equipment, fixtures, or furniture are limited to the greater of 10 years or the asset’s useful life, but not more than 25 years.
Term loans for leasehold improvements are available for up to ten years.
Term loans for real estate: up to 25 years

The SBA Export Express loan program has the same interest rate limit as its sister program. Loans up to $50,000 cannot have a rate higher than Prime plus 6.5 percent, while loans exceeding $50,000 cannot have a rate higher than Prime plus 4.5 percent.

Differences Between SBA Express Loans & SBA 7(a) Loans

While there are several various forms of SBA loans, the most widely utilized SBA lending program is the 7(a) loan. SBA Express loans are based on the same program structure as 7(a) loans, but are limited to $350,000 in capital. Another important factor to remember is that your lender has greater latitude in terms of underwriting and paperwork requirements.

The following are some of the key distinctions between an SBA Express loan and a standard SBA 7(a) loan:

Despite the higher interest rates, consumers choose an SBA Express loan over an SBA 7(a) loan because lenders offer faster financing timelines. Most company owners are ready to pay a premium for quickness, particularly when they want capital to expand their operations.

Because they have a specialized SBA staff that will assist with you throughout the process, South End Capital can often get SBA loans authorized in a matter of weeks. If you’ve been in company for two years or more and need a quick SBA loan of up to $350,000, you may start the application process online with only a few pieces of information.

South End Capital is a place worth seeing.

Alternatives to SBA Express Loans

There are situations when you want cash sooner than the SBA Express loan’s regular turnaround time. There are quick business loan choices that may give you with the finances you need until you can acquire an SBA-approved and financed refinancing or consolidation loan. Fast business loans are those that deliver financing in less than a week. It’s worth noting that several of these choices have higher interest rates than the SBA Express loan.

Aside from SBA Express loans, there are a few more options:

Small business line of credit: Unlike an SBA loan, certain small company lines of credit need minimal paperwork, and applications may be completed in minutes. It’s also simpler to qualify than with an SBA Express loan, since consumers with lower credit ratings may be accepted.
Unsecured business loan: Another quick SBA loan option is an unsecured business loan through an internet lender. Because collateral is not needed, the application and approval processes will be sped up. Applications may be submitted in minutes, and funds can be received in as little as three days.
Applying online for invoice financing takes minutes, and you can be financed in a matter of days with some of the greatest accounts receivable financing and invoice factoring providers. Furthermore, many invoice finance companies do not regard credit score while approving loans.

Conclusion

SBA Express loans can provide potentially faster approval times but have higher interest rates. Terms of an SBA Express Loan also feature shorter repayment periods than traditional 7(a) loans. However, the Express loan program can provide funding in as little as 30 days if you partner with a lender with experience in the program and if the borrower is fully prepared at application time.

The “SBA Express Loans: What They Are & How to Apply” is a loan that can be obtained by those who meet certain criteria. The loan comes with many benefits and is easy to get approved for. Reference: sba express line of credit terms.

Related Tags

what is an sba express loan
sba express loan maximum
sba express loan vs 7a
sba express loan for startup business
how to apply for sba express loan