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SBA Express Loans

written by: •edited by: Michele McDonough•updated: 11/18/2009

There are three types of SBA Express loans: The Express loan, the Community Express loan, and the Patriot Express loan. Here we will discuss both the Express and the Community Express loans, how they work and how to apply.

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    About SBA Express Loans

    Express Lane The SBA Express loan offers a 50% guarantee from the SBA and up to $350,000 can be borrowed. The purpose of the Express loan is smaller paperwork and a faster turnaround for the small business owner. The Express loan can be used as a revolving line of credit for up to seven years before full repayment. Loans in the amount of $50,000 or less have a current interest rate of prime plus 6.5% and loans at $50,000 have an interest rate of prime plus 4.5%. Loans for larger amounts offer varied interest rates based on prime. Check the SBA's informative loan chart to help you decide if the express loan is right for you.

    Again, keep it mind it is up to the lender, not the SBA, to determine if you are a good candidate for an SBA loan. SBA approved lenders are required to give you a response to your application for an SBA express loan within 36 hours.

    Rules for the SBA Express Loan

    Just as with other SBA loans, you must submit all the required documents to your lender for loan consideration. Because the Express loan can be in amounts up to $350,000, check out the SBA's guide to loan guarantee programs to determine if the SBA Express loan is right for you. Read the SBA's frequently asked questions web page where you'll find answers on how businesses can qualify for an Express loan.

    Applying for a SBA Express Loan: The Loan Package

    If you've never prepared any type of loan package, keep in mind that your loan package for the Express loan must include a business plan, an income statement, a balance sheet and a statement of cash flow. Be prepared to also present at least three years of personal and business tax returns if asked. Free templates for all of these documents can be found in Part Two of this article series.

    First, locate your local SBA office and make an appointment. The SBA offers free services and advice to small business owners and will help you prepare your loan package.

    Once you've completed each of the required elements for the loan package and have gathered your personal and business tax returns, make an appointment with a SBA approved lender in your area to see if you qualify for a SBA Express loan.

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    SBA Community Express Loan

    The SBA also offers Community Express loans in amounts up to $250,000. This SBA loan can also be used for a revolving line of credit with a seven year prepayment term. Interest rates are based on SBA points plus prime. Use the SBA's loan chart to help you determine if the SBA Community Express loan is right for your business.

    Rules for the SBA Community Express Loan

    Certain business are eligible for the Community Express loan. To be eligible, a new or existing business must be in an area that has been identified as being in a Historically Underutilized Business Zone or HUBZone. Further, the new or existing business must be in a community that has been deemed as a distressed community or one that falls into the Community Reinvestment Act. The Community Express loan also requires less loan paperwork and a fast turnaround from an SBA approved lender.

    Applying for the Community Express Loan: The Loan Package

    Again, many new and existing business owners who look to the SBA to help their small business should know that no lender will just hand you the money if you don't submit a good loan package. You must show creditworthiness and your ability to repay the loan through your business' cash flow. To help you put together a great loan package for the SBA Community Express loan, use the templates offered in Part Two of this article series.

    Make sure you are applying for the correct SBA small business loan by reading SBA's frequently asked questions. If you are unsure how to prepare you loan package or what to include, contact your local SBA office.

    Part Four of this series discusses the Patriot Express Loan.

Small Business Funding: How to Get a SBA Loan

The Small Business Administration or SBA offers many guaranteed loan programs for the small business owner. This five-part series will discuss each one, the rules, and how to apply.
  1. Types of SBA Loans
  2. How to Obtain SBA ARC Loans
  3. SBA Express Loans
  4. SBA Patriot Express Loan
  5. SBA 504 Loan