SBA Express loans are government-backed loans issued by individual lenders and can provide up to $500,000 in funding, usually with a 10-year repayment term. Funding speeds are much faster compared to other types of loans backed by the Small Business Administration (SBA), typically around one month, and this is because lenders often have reduced documentation requirements and do not have to wait for review or approval from the SBA.
Express loans fall under the SBA 7(a) loan program, which is one of the most popular financing options offered by the SBA. Like other SBA loans, the SBA Express program can offer you some of the most competitive interest rates. To qualify, however, businesses must typically have strong credit and finances.
If you’re looking for help in getting fast SBA loans, consider reaching out to Clarify Capital. It is a business loan broker with over 75 lenders it can match you with, and you’ll also get personalized recommendations based on your needs and goals.
SBA Express Loan: Financing Options
With an SBA Express loan, you can apply to have it structured as either a line of credit or a term loan. The SBA also provides a slightly different Express loan program for businesses that want to expand the export side of the business. While the SBA Express loan also carries similarities to other SBA loan programs, there are some notable differences that may not make it an ideal fit for everyone.
SBA Express Loan: Line of Credit vs Term Loan
Depending on the lender you choose, you may have the option to apply for an SBA Express loan structured as either a line of credit or term loan.
- With a line of credit, you can draw funds on an as-needed basis. It’s a revolving line where you can continuously draw funds up to the credit limit you’re issued by your lender.
- With a term loan, you’re issued funds in a single disbursement, without the flexibility to draw additional funds. The advantage, however, is that rates on a term loan tend to be lower. You may also be able to get a longer repayment period on a term loan, which can help lower your monthly required payments.
SBA Express vs SBA Export Express Loan Program
If your business is heavily involved in exporting goods internationally, the SBA Export Express loan program may be a better fit. One major difference with this program is that the SBA offers a higher guarantee to lenders to protect against the increased risk of conducting business internationally.
For SBA Export Express loans, the SBA guarantees lenders up to 90% of the loan amount for loans of $350,000 or less and 75% for larger loans. The standard SBA Express loan program, by comparison, only offers lenders a maximum guarantee of 50%.
From a lender’s perspective, having a larger SBA guarantee percentage lowers its risk of lending. If a borrower fails to repay the loan, the lender has the ability to recover the guaranteed portion of the loan from the SBA. As a result, loans with a larger SBA guarantee tend to also carry more competitive rates and other loan terms.
SBA Express Loans: Typical Rates, Terms & Qualifications
Individual lenders set many of the requirements for an SBA Express loan. However, we’ve listed the typical figures you’re likely to see below. Meeting these requirements won’t guarantee an approval, but it will make it easier for you to find a lender willing to issue funding.
Typical Rates & Terms | |
Loan Amount | Up to $500,000 |
Interest Rate | Subject to SBA maximums (see our SBA loan rates article) |
Maximum Repayment Term |
|
Repayment Schedule | Varies |
Funding Speed | 30 to 60 days |
Typical Qualifications | |
Credit Score | 680 |
Time in Business | 2 years |
Annual Business Revenue | Varies |
Debt Service Coverage Ratio (DSCR) | 1.25x or greater |
Collateral |
|
We also recommend reviewing our guide on other common SBA loan requirements.
SBA Express Loans: Pros & Cons
| PROS | CONS |
|---|---|
| Funding speeds are faster than most other SBA loan programs | Loan amounts are capped at $500,000 |
| Interest rates offered can be among the most competitive compared to other loan options | Qualification requirements tend to be more strict than other conventional types of financing |
| Express loans can be structured as either a credit line or term loan | Not all lenders offer SBA Express financing |
Who Should Consider an SBA Express Loan?
You should consider an SBA Express loan if you fall into the following scenarios:
- You need $500,000 or less in funding: SBA Express loans only provide a maximum of $500,000 in funding. If you need additional funds, you should plan for applying for additional loans or alternate loan programs.
- You want to get funded quickly: Other types of SBA loans can take up to 90 days or more to get funded. If you need money more quickly, an SBA Express loan could be finalized in under four weeks.
- You have strong credit and finances: While specific qualification requirements can vary from lender to lender, you’ll usually need strong credit and finances to get approved. We recommend a credit score of 680, a history of profitability, and a debt service coverage ratio (DSCR) of 1.25x or greater. See our DSCR guide for how it’s calculated and what it means.
How To Get an SBA Express Loan
Once you’ve decided that an SBA Express loan is the right choice for your business, getting it can be done in three steps. This includes checking your SBA eligibility, finding a lender that offers SBA Express loans, and then applying and submitting required documentation.
Step 1: Check Your SBA Loan Eligibility
In addition to meeting a lender’s requirements, the SBA establishes several of its own. For instance, you’ll typically need to operate as a for-profit company based in the US. You’ll also need to meet the SBA’s size standards and show that you’ve been unable to obtain financing from other lenders.
Step 2: Find a Lender That Offers SBA Express Loans
SBA Express loans can be offered by different types of lenders, including credit unions, banks, online lenders, and business loan brokers. You can use the SBA’s Lender Match tool to be paired with a local SBA provider. You can also check out our roundup of the best SBA lenders for small businesses.
Step 3: Apply & Submit Required Documentation
SBA Express loans usually require less documentation than other loan programs offered by the SBA. However, you’ll still need to complete and provide certain SBA-specific forms and provide credit and financial documents requested by the lender.
Below is a list of commonly required documentation.
- SBA form 1919 (borrower information); see our guide on what SBA form 1919 is and how to complete it
- SBA form 413 (personal financial statement); our article on what SBA form 413 is includes who needs to and how to complete it
- SBA form 912 (statement of personal history); check out our guide on how to fill out SBA form 912
- Financial statements (such as tax returns, balance sheets, and profit & loss statements)
- Business plan; our how to write an SBA business plan article includes a free template
- Business bank statements
We’ve detailed each of these steps in our guide on how to get an SBA loan.
SBA Express vs Other SBA Loans
SBA Express loans won’t be the best fit for everyone. The SBA offers other loan programs that may be more well-suited for you, depending on your business needs and goals. We’ve covered these in greater detail in our guide on SBA loan types, but we’ve also provided a brief summary:
- SBA 7(a) loans: Standard 7(a) loans can offer up to $5 million in funding for a wide range of business uses including working capital, real estate, business acquisitions, and more. Our guide on the SBA 7(a) loan program details rates, terms, and qualification requirements.
- SBA CDC/504 loans: SBA 504 loans are issued through Certified Development Companies (CDCs). Up to $5.5 million in financing is available and funds must be used for major fixed assets that promote business growth and job creation. Head over to our article on the SBA 504 loan to learn about how it works.
- SBA CAPLines: CAPLines are revolving credit lines that are designed to help a business cover cyclical working capital needs. We have a guide on SBA CAPLine rates, terms, and qualifications if you need more information.
- SBA export loans: Export loans can be a good fit for businesses that have a large portion of export sales and need working capital to support these sales.
- SBA microloans: Microloans have a maximum loan amount of $50,000, making this a better option for businesses with smaller funding needs. The SBA states that the average SBA microloan is around $13,000. If you’d like to learn how to apply, see our article on SBA microloans.
- SBA disaster loans: SBA disaster loans, or Economic Injury Disaster Loans (EIDL), are an option for businesses that have been impacted by a declared disaster. Some examples of disasters include floods, hurricanes, earthquakes, and more. We cover this in greater detail in our guide to the SBA EIDL.
SBA Express Loan Alternatives
If you’re unable to get approved for an SBA Express loan at the rates and terms you want, we recommend first heading over to our guide on how to get a small business loan for tips on improving the strength of your application.
If you’re still seeking alternatives, you can consider the following options:
- Small business line of credit: Small business credit lines can offer faster funding speeds with easier qualification requirements. However, interest rates may be higher than what you might be able to get on an SBA loan. Check out our recommendations of the top small business credit line providers.
- Working capital loan: Funds from a working capital loan can be used for nearly any business purpose. Many lenders offer fast funding speeds with easier documentation and qualification requirements than SBA loans. See our picks for the best working capital loans.
- Other SBA loan programs: The SBA offers additional loan programs that can provide more funding and a wider range of loan terms. Lenders may also have varying eligibility criteria for these other financing options. Head to our discussion on SBA loan types to see what may be suited to your needs.
Frequently Asked Questions (FAQs)
SBA Express loans can be funded in as little as four weeks or less. The exact timeline will vary depending on the lender you choose and the complexity of your business. Most other SBA loans, by comparison, can take upwards of 90 days or more to complete.
No collateral is required for loans up to $50,000. Loans exceeding that amount will require adequate collateral that will be dependent on the loan amount you’re requesting.
SBA Express loans can be difficult to get as most lenders will require good credit and strong business finances. We recommend a credit score of at least 680 and a two-year history of profitability.
Bottom Line
SBA Express loans can provide you with funding on a faster timeline. However, loan terms, such as funding amounts, may be limited compared to the SBA’s other loan programs. You’ll also still need to meet many of the standard SBA eligibility requirements, with most lenders requiring strong credit and finances to get approved.
