SBA Express Loans: The Ultimate Guide

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What Is an SBA Express Loan?

SBA Express loans are business loans that are partially guaranteed by the Small Business Administration (SBA) with expedited credit decisions. SBA Express loans offer credit decisions in 24 to 36 hours, whereas non-Express SBA loans will involve SBA underwriting that will take five to 10 business days, at least.

Like all SBA loans, the SBA doesn’t actually do any direct lending for SBA Express loans. Instead, the SBA works with a network of approved lenders who actually underwrite and issue the loans. The SBA does, however, guarantee a portion of the loan amount, meaning if the borrower defaults on the loan, the lender won’t lose all of their money.

The SBA Express loan program and the SBA Export Express loan program, two sub-programs within the SBA 7(a) loan program, offer funding of up to $350,000 and $500,000, respectively. The main draw of these SBA Express loan programs is their aforementioned speed.

Plus, these SBA Express loans can come in the form of term loans or lines of credit. You can use the proceeds of SBA Express loans to buy real estate, refinance debt, and access working capital, just to name a few of the most popular uses.

In exchange for that speed though, you pay a higher interest rate compared to traditional SBA loans. You’ll probably want to consider these loans specifically if you have strong credit, a well-established business, and need $350,000 or less in capital. If you have bad credit or need money even more quickly, there are other online lending options that will better fit your needs.

Ready to learn more? We’ve compiled everything you need to know about SBA Express loans—including the requirements, the terms, and how to apply for one. Here is your ultimate guide on all things SBA Express loans.

Types of SBA Express Loans

There are two types of Express SBA loans—the standard SBA Express loan and the SBA Export Express loan. Both of these SBA Express loans operate within the SBA 7(a) loan program, but they offer business funding for slightly different purposes. As a result, they’ll function slightly differently. Here are the details on the two types of SBA Express loans and how they differ:

Loan Type Maximum Loan Amount Rates Loan Use Cases Loan Term
SBA Express Loan
Term loan, line of credit
$350,000
Market prime rate + 4.5% to 6.5%
Working capital, real estate, equipment, debt refinancing, and more
7 years for lines of credit, 25 years for real estate, and 5 to 10 years otherwise
SBA Export Express Loan
Term loan, line of credit
$500,000
Market prime rate + 4.5% to 6.5%
For small export businesses to invest in growth
7 years for lines of credit, 25 years for real estate, and 5 to 10 years otherwise

Standard SBA Express Loans

Your first option for a small business express loan through the SBA is the general SBA Express loan. This SBA loan mimics a standard SBA 7(a) loan in terms of structure and use.

The key differences are approval time, loan amounts, and interest rates. As the name suggests, these loans are express, and usually, the turnaround time is 36 hours. These Express loans also have a lower maximum loan amount and higher maximum interest rates than your typical 7(a) loan.

    Uses

    Lenders can structure the financing either as a term loan or as a line of credit, and you can use the money for a number of things: working capital, real estate, equipment, debt refinancing, and more.

    Rates and Terms

    Your lender will determine the final terms of your SBA Express loan, but the SBA does set guidelines.

    These are the terms you can expect on an SBA Express loan:

    • Maximum loan amount of $350,000
    • Terms: seven years for lines of credit, 25 years for real estate, and five to 10 years otherwise
    • Interest Rates: market prime rate + 4.5% to 6.5%

    You may also have to pay additional fees to your lender, including application fees and packaging and service fees. Additionally, collateral is required for loans over $25,000. You’ll also need to sign a personal guarantee.

    While terms are less favorable than standard SBA 7(a) loans, they still beat what you’re likely to find through alternative, online lenders.

    Maximum SBA Guarantee

    The SBA guarantees up to 85% of traditional SBA loans, but for SBA Express loans this drops to 50%. This makes the loans more of a risk for lenders and as a result, the terms are less favorable than standard SBA 7(a) loans.

SBA Export Express Loans

Another option for a small business express loan is the SBA Export Express loan. Export Express loans are much more specific and less versatile than the general SBA Express loans. That said, they come with better terms. One of the biggest benefits: A super-fast 24-hour turnaround from the SBA.

    Uses

    SBA Export Express loans are designed for small export businesses. This loan helps businesses enter a new export market or expand in an existing market. If you’re looking to up your business’s ability to export goods and services, then an Export Express loan could be the perfect funding for your business’s growth.

    Rates and Terms

    Though these small business express loans also come with an expedited SBA review, they offer even better terms than the SBA Express loans do:

    These are the terms you can expect on an SBA Export Express loan:

    • Maximum loan amount: $500,000
    • Term: seven years for lines of credit, 25 years for real estate, and five to 10 years otherwise
    • Interest Rates: Market Prime Rate + 4.5% to 6.5%

    As you can see, there’s a higher maximum loan amount and faster SBA approval for the Export Express loan, compared to the general Express loan. This is because the SBA understands that exporters often need to move very quickly to capitalize on opportunities overseas.

    Maximum SBA Guarantee

    The Export Express loans that the SBA offers come with better terms than the SBA Express working capital loan, and that’s because the SBA is willing to guarantee a higher percentage of an Export Express loan.

    For Export Express loans of $350,000 or less, the SBA guarantees up to 90% of the loan. For Export Express loans above $350,000, the SBA guarantees up to 75% of the loan.

Loan Requirements

The speedy turnaround and favorable terms of SBA Express loans make them very attractive for small business owners. But these loans are not easy to get.

On top of some more simple SBA requirements (such as being a for-profit business based in the U.S.), the lenders who provide SBA Express loans often have their own, stricter requirements.

These are the eligibility requirements that you can expect for SBA Express loans:

  • You must have invested equity in the business
  • You must have used other funding sources before seeking an SBA Express loan
  • You must demonstrate that reasonable financing is not available from other funding sources
  • Credit score above 650
  • DSCR (debt service coverage ratio) of 1.1 or higher
  • Strong revenue
  • Profitable business
  • Strong business plan
  • Collateral for loans over $25,000
  • You cannot have other delinquent loans with the government

Before you dive into the application process with a lender, be sure to check their minimum requirements for SBA Express loans, so you don’t sink time into an application they’re unlikely to approve. Keep in mind that your lender may have additional requirements beyond the above.

Lenders

Many lenders participate in the SBA Express loan program, so the biggest challenge is narrowing down the list and choosing the lender who is best for your business. You can access these loans through regional banks and some nonprofit lending institutions.

Some popular SBA Express loan lenders are:

  1. Citizens Bank
  2. TD Bank
  3. U.S. Bank
  4. Northeast Bank
  5. Associated Bank

To get started finding the right lender for you, try the SBA’s lender match tool.

Application Process

Once you find a lender to work with, you’ll start by filling out SBA Form 1919. This form asks for the following information:

  • Ownership information
  • SBA loan application history
  • How you will use your SBA Express loan
  • Number of staff your business employs and job creation information

On top of Form 1919, your lender will likely ask for additional documentation, including the following:

  • Projected financial statements
  • Your business credit report
  • Business and personal tax returns
  • A business plan

Once the SBA reviews your application, they will respond within 24 to 36 hours with an initial approval decision. But even if the SBA approves your loan, your lender may take longer to fund it.

A Fundera loan specialist can also help you put your SBA loan application together.

See Your Loan Options

Pros and Cons of SBA Express Loans

Many small business owners look to SBA Express loans as a quicker alternative to traditional SBA funding.

Once you submit an SBA Express loan application, the SBA will respond to your application within 36 hours (24 hours for Export Express loans). By contrast, standard SBA loans come with an SBA review that lasts anywhere from five to 10 business days.

This is great, but there’s a caveat: SBA review is only a small portion of the entire funding process. Once the SBA gives approval, the lender will still need to underwrite and approve your application and then close your loan. This can still take several weeks.

Plus, in exchange for the quick turnaround, the SBA Express loan program comes with lower loan amounts ($350,000 is the maximum for the standard Express loan) and higher interest rates. So if you’re considering an SBA Express loan for quick SBA funding, read up on both the pros and cons that come with this funding option:

Pros

First, let’s take a look at the main advantages of choosing to fund with an SBA Express loan:

    Fast Response from the SBA

    When measured against the five to 10 business days it takes the SBA to make a credit decision for standard SBA loans, the 24- to 36-hour turnaround for SBA Express loans is a major upside for this funding option.

    Less Paperwork

    The stack of documents required to apply for an SBA Express loan won’t be quite as hefty as the stack of documents required to apply for a traditional SBA loan. One of the biggest hindrances of fast funding typically ends up being the process of collecting documentation.

    Funding Options

    The added flexibility that comes with the two funding products available through the SBA Express loan program—term loans and lines of credit—is a huge plus. An SBA Express term loan will be a better fit for one-off expenses while the SBA Express lines of credit will be a great choice for sustained working capital needs.

Cons

Now, it’s time to consider some notable imperfections in the SBA Express loan program. Here are some downsides to SBA Express loans to keep in mind before taking one on:

    Smaller Loan Amounts

    While SBA Express loans only offer loans and credit limits of up to $350,000, standard SBA 7(a) loans can be as large as $5 million. So, if you’re in the market for larger amounts of funding, then the SBA Express loan program won’t be for you.

    Higher Interest Rates

    Standard SBA 7(a) loans can come with interest rates as low as the Prime Rate + 2.25%, but SBA Express loans have higher interest rates. This, ultimately, will be due to the quicker funding process. The underwriting process for SBA Express Loans isn’t as thorough, so the interest rates are higher so lenders can be sure that lending through the SBA Express Loan is worth the relative risk.

    Lender Underwriting Can Still Lag

    You’ll notice that the express in SBA Express loans really only applies to the SBA’s underwriting processes. So, even though the SBA will be quick about deciding whether you qualify for an SBA Express loan, lenders aren’t guaranteed to have as much urgency.

    Difficult to Qualify For

    At the end of the day, SBA Express loans are still pretty tough to qualify for. Even though there will be a quick underwriting process, there will still be some lofty minimum requirements to fulfill before you’re able to even apply for an SBA Express loan.

Frequently Asked Questions

The Bottom Line

SBA Express Loans offer the best of both worlds: the favorable terms of SBA funding and fast approval times.

If you’re a business owner with a great credit score and a well-established business, then an SBA Express loan might be a perfect option for you. However, if you’re unable to qualify, there are dozens of other lenders—many of them faster than SBA Express loans—who might be able to fund your business.

See Your Loan Options
Vice President and Founding Editor at Fundera

Meredith Wood

Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera. She launched the Fundera Ledger in 2014 and has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending. She is a monthly columnist for AllBusiness, and her advice has appeared in the SBA, SCORE, Yahoo, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, MyCorporation, Small Biz Daily, StartupNation, and more. Email: meredith@fundera.com.
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