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Small business owners often need quick access to capital to manage cash flow, expand operations, or cover unexpected expenses. Small Business Administration (SBA) Express loans can offer a streamlined, faster alternative to traditional SBA loans, providing up to $500,000 with simplified documentation and faster approval times.
This guide explains how SBA Express loans work, who qualifies, and how they can help your business grow efficiently.
Key Points
• SBA Express loans often offer a quicker approval process, with responses from the SBA typically within 36 hours, making them ideal for businesses needing fast access to capital.
• Borrowers can receive up to $500,000 with an SBA Express loan, which can be used for working capital, equipment purchases, or other business needs.
• The SBA guarantees up to 50% of the loan, reducing risk for lenders and improving approval chances for borrowers.
• SBA Express loans involve less paperwork and simpler application processes compared to other SBA loan programs, making it easier for small businesses to apply.
• If you don’t qualify for an SBA Express loan, online lenders can offer short-term business loans, business lines of credit, startup business loans, and more.
What Is an SBA Express Loan?
Part of the SBA loan program, the SBA Express loan provides the same SBA-backed financing as other SBA loan programs like 504 and 7(a) loans, but often faster. It’s ideal for businesses that need quick access to capital.
Loan Amounts
Borrowers can get up to $500,000 with the SBA Express loan program. Business collateral is not required for loans up to $50,000.
Interest Rates
The interest rate for an SBA Express loan is determined by the lender but is capped by the Small Business Administration. Rates typically vary based on the borrower’s creditworthiness, loan amount, repayment term, and prevailing market rates, with SBA guidelines setting the maximum allowable interest the lender can charge.
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Repayment
Repayment terms may also vary, depending on your qualifications, how much you borrow, and what you intend to use the funds for.
SBA Express loans for real estate have repayment periods of 25 years. If the loan is for equipment, working capital, or inventory, the repayment period is 10 years. A line of credit through the Express loans program also has a repayment period of up to 10 years.
Processing Time
The appeal of the SBA Express loan is its fast processing time. The SBA will typically review your application within 36 hours and give its decision. Funding times average five to 30 days, but may be up to 60 days depending on your lender.
Approval and Turnaround Time
Once you’ve been approved for an SBA Express loan, you’ll need to review the loan agreement to understand how much interest you’ll be paying on the loan and how long you have to pay it back.
After you sign the agreement, the lender will process it and send the funds to your account. Each lender is different in how quickly it will send those funds. Some can send them the same day, while others take a few days or even weeks.
Key Benefits of SBA Express Loans
SBA Express loans provide small businesses with faster access to capital and simplified application requirements compared to traditional small business loans. They offer flexible terms and competitive rates, making them a practical option for short-term funding needs.
Key benefits of SBA Express loans include:
• Quick approval, often within 36 hours for eligible applicants
• Loan amounts up to $500,000
• Simplified application and documentation process
• Competitive interest rates capped by the SBA
• Flexible repayment terms tailored to business needs
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Why Consider an SBA Loan?
When it comes to comparing conventional vs. SBA loans, SBA loans are often seen as preferable because they offer lower interest rates than many banks, credit unions, or online lenders can provide. Also, they tend to have the longest repayment periods, which means they require lower monthly payments over a longer period of time. (Keep in mind, though, that longer payment periods typically mean you’ll pay more in interest overall.) Collateral requirements for an SBA loan may also be lower than banks require.
Alternatives to an SBA Loan
If you don’t qualify for an SBA loan, there are other financing options that may still help you access the capital your business needs. Depending on your credit profile, business history, and funding purpose, exploring different types of business loans or non-loan funding sources can provide flexibility, though terms and costs may vary.
Alternatives to an SBA loan include:
• Online business loans that evaluate factors beyond credit scores, such as revenue and cash flow
• Business lines of credit for flexible, ongoing access to funds
• Equipment financing for purchasing machinery or vehicles using the asset as collateral
• Merchant cash advances based on future sales (often higher cost)
• Small business grants, which do not require repayment and can reduce the need for borrowing
• Small business credit cards to help cover short-term expenses and manage cash flow
SBA Express Loan Requirements and Eligibility
To qualify for an SBA Express loan, businesses must meet both SBA program rules and lender-specific requirements. While the SBA sets general eligibility standards, individual lenders evaluate factors like creditworthiness, financial stability, and business operations. Meeting these criteria can improve approval odds and lead to more favorable loan terms.
Credit Score and Financial History
Lenders consider your credit score and overall financial history when evaluating eligibility for an SBA Express loan, as these factors help assess repayment risk. While the SBA does not set a strict minimum credit score, many lenders prefer applicants with good to excellent credit, along with a solid track record of managing debt, consistent revenue, and healthy cash flow. A clean payment history and well-documented financial statements can strengthen your application.
Business Size and Type Guidelines
To qualify for an SBA Express loan, your business must meet the SBA’s definition of a small business, which is based on industry-specific size standards such as revenue or number of employees.
To be eligible for any 7(a) loan (a category into which the Express loan falls), your business must:
• Be for profit
• Be an eligible business in the U.S. or its territories
• Be creditworthy
• Have a reasonable ability to repay the loan
Most for-profit businesses operating in the U.S. are eligible, though certain industries — like speculative real estate or lending — may be restricted. Lenders also typically look for businesses with an established operating history and a clear, viable business model.
How Can Funds from an SBA Express Loan Be Used?
Just as with SBA 7(a) loans, funds from SBA Express loans can be used for business-related expenses.
Working Capital
SBA loan funds can provide essential working capital to help small businesses cover day-to-day operational expenses. This includes payroll, rent, utilities, and other recurring costs, ensuring the business can maintain smooth operations during periods of growth or financial strain without disrupting cash flow.
Equipment and Inventory
Funds from an SBA loan can also be used to purchase equipment or stock inventory necessary for running and expanding your business. Whether you need machinery, technology, or raw materials, using loan proceeds for these purposes allows businesses to invest in growth while spreading the cost over time.
SBA Express Loans vs. 7(a) Loans
SBA Express loans and SBA 7(a) loans are both popular financing options backed by the Small Business Administration, but they differ in speed, loan limits, and application requirements.
SBA Express loans are designed for faster access to capital, offering loan amounts up to $500,000 with streamlined paperwork and quicker approval times — often within days. In contrast, SBA 7(a) loans typically allow for larger loan amounts and longer repayment terms but involve a more detailed application and a longer approval process, making them better suited for businesses that can wait for funding and need more substantial financing.
Recommended: Guide to Funding a Small Business
The Takeaway
SBA Express loans are a streamlined loan option under the U.S. Small Business Administration (SBA) program, offering up to $500,000 with faster approval times compared to standard SBA loans. These loans provide businesses with working capital or funding for growth, often with less paperwork and flexible terms.
If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.
FAQ
What is an SBA Express loan?
An SBA Express loan provides up to $500,000 to small business owners. Unlike other SBA loans, the application process is expedited, and the SBA will review it within 36 hours. However, your lender may take 30-60 days to process your application and fund your account.
What are the pros and cons of an SBA Express loan?
The biggest advantage of an SBA Express loan is how fast your application will be processed compared to other SBA loans, allowing you to get your cash faster. A drawback may be that only those with good credit may qualify, and funding times may still be lengthy compared to traditional business loans.
What can I use an SBA Express loan for?
Just as with any SBA loan, you can use your Express loan to cover business expenses like buying equipment or inventory. You can also hire employees or purchase real estate.
How long does it take to get an SBA Express loan?
An SBA Express loan typically receives an initial SBA response within 36 hours, which is faster than other SBA programs. However, the full approval, underwriting, and funding process usually takes a few weeks, depending on the lender, borrower qualifications, and how quickly documentation is provided.
What credit score is needed for an SBA Express loan?
Most lenders prefer SBA Express loan applicants to have a credit score of at least 600. While the SBA doesn’t set a strict minimum, a higher credit score improves approval chances and may result in better interest rates and loan terms, reflecting lower risk to the lender.
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