SBA Express Loan: Requirements & Application (2024)

FAQs

Is it hard to get an SBA Express loan? ›

There is no minimum credit score required by the SBA for an SBA Express loan, but individual lenders may require a minimum personal credit score: 680 or above is common. SBA loans typically involve a personal credit check for all owners with 20% or greater ownership, and may involve a business credit check as well.

The SBA responds to Express loan applications within 36 hours and to Export Express loan applications within 24 hours. These turnaround times are substantially shorter than for other SBA loans, which take between five and 10 business days for approval.

Is there a Credit Score Minimum for SBA Loans? The Small Business Administration doesn't set specific credit score minimums for SBA loans. However, lenders set their own SBA loan requirements, and you'll typically need a credit score somewhere around 620-640+ to get an SBA loan.

Big bank approval rates might be anywhere between 10 percent and 30 percent of loans, while small bank and credit union approval rates hover between around 20 percent and 40 percent. What this means is that any particular loan has a greater than 50 percent chance of being disqualified.

Loan amounts

Most 7(a) loans have a maximum loan amount of $5 million. However, SBA Express loans have a maximum loan amount of $350,000. SBA Export Express loans have a maximum loan amount of $500,000.

Express loans are available through approved lenders such as Chase and Citizens Bank. You'll need to apply directly with a participating financial institution to get an SBA Express loan. The best lender for an SBA Express loan will be the one that offers you the lowest interest rate.

If your loan is approved, the SBA will send you an email with loan details. Contact the SBA directly if you have not received an email and want to check your application status. Depending on your lender, you may also be able to check your application status online or by contacting your loan officer.

After approval, the lender will disburse the funds in days or a few weeks. The funds can be used for various purposes, including working capital, purchase of equipment or inventory, and business expansion. Some SBA loans, though, restrict how you can use the funds.

As with banks, it usually takes one to seven days to receive funds after approval. Approval itself is typically offered on the same day you apply, as long as you fit all of the requirements.

Personal loans for a credit score of 500 are not easy to get, but that doesn't mean it's impossible. Some lenders deal mainly with borrowers who have bad credit and may not even check a potential borrower's credit rating.

Can I get a business loan with a 500 credit score? ›

When you have bad credit, you can still get a small business loan. This is because your credit score doesn't matter as much as the overall financial health of your business. Many lenders require a minimum credit score of 500, at least six months in business, and more than $30,000 in annual revenue.

The short answer is that you must have a credit score of 570 or higher to be eligible for a COVID-19 EIDL up to $500,000, and 625 for a larger loan.

Common Reasons SBA Loan Applications Get Denied

Credit score is too low or not long enough, or credit history contains other red flags like a recent bankruptcy. Issues of character (e.g. a criminal record) Not enough collateral. Not enough business revenues or capital to repay the debt.

Yes, self-employed workers qualify for SBA loans. The loan amount calculation is different, but most other requirements, spending uses, and forgiveness criteria still apply.

Even though a borrower must personally guarantee the loan, it is not reflected on a personal credit report.

SBA Express lenders don't have to require collateral for loans of less than $25,000 (if you only need that amount or less, you should probably go with a microloan), and they can use their own collateral policy for amounts between $25,000 and $350,000.

SBA requirements

Meet the SBA's size standards: Your business must qualify as a “small” business based on average annual receipts or average number of employees. Not be receiving funds from any other financial lenders. Be able to repay the loan based on your business's projected operating cash flow.

Live Oak Banking Company was the most active SBA 7(a) lender by dollar amount in the last quarter of 2020, approving over $746 million in loans. Based in Wilmington, North Carolina, Live Oak Bank offers an online-based, streamlined application to small businesses across the U.S. and is part of the SBA PLP.

A consumer express loan is exactly what it sounds like. It's a loan made to a consumer by a financial institution, and its express status means it is initiated, approved, and funded quickly, without the normal weeks of processes required for traditional personal loans.

SBI offers the Xpress Credit Personal Loan scheme for individuals planning a wedding or vacation, or those making a planned big-ticket purchase. The loan can also be taken for meeting emergency financial needs. The loan amount can go up to Rs. 20 lakh and the interest rate varies from 11.50% p.a. to 12.00% p.a.

What does fully approved mean SBA loan? ›

Fully Approved – The SBA reviewed this application and approved the Borrower Requested Forgiveness Amount. ■ Partially Approved – The SBA reviewed this application and reduced the Borrower Requested Forgiveness Amount.

For example, SBA may review a loan if the loan documentation submitted to the SBA by the lender or any other information indicates that the borrower may be ineligible for a PPP loan, or may be ineligible to receive the loan amount or loan forgiveness amount claimed by the borrower.

In the case of SBA 7(a) and Community Advantage loans, you won't get your loan disbursem*nt in one big check, but rather in “controlled disbursem*nts.” Lenders choose to disburse business loan funds in pieces because it keeps you accountable for how you use the funding.

Next Steps: Underwriting, Approval, and Commitment

The next stage of the SBA loan process is underwriting. This is what you might find most daunting because the lender will critique every part of your personal financial history and business. The best advice is to be as open as possible with your lender.

2: Application Processed

A loan officer takes over your case to work with you to receive any additional information, review insurance or other recoveries, and recommend a loan amount. We strive to make loan determinations within 2–3 weeks after receiving complete application packages.

Ultimately though, the SBA loan processing time is long because the loan doesn't come from the SBA itself –– they're just the backers, allowing financial institutions to lend to a wider variety of businesses. To receive an SBA loan, the application needs to go through the SBA and the lending institution.

Pending Approval: This means you've successfully raised the amount of your loan and your loan is pending disbursal.

You may either call or email the customer service department to track the status of your loan. When you call the customer care, you need to provide the reference number along with the registered mobile number to the representative. Your status can be tracked within a few seconds here.

Banks: 1-7 business days

Personal loans from banks typically take one to seven days to fund, depending on the bank and whether you have an account with them.

The easiest loans to get approved for would probably be payday loans, car title loans, pawnshop loans, and personal installment loans. These are all short-term cash solutions for bad credit borrowers in need.

Can I get a loan with a 480 credit score? ›

As a result, a 480 credit score will make it difficult to qualify for a loan or unsecured credit card, and you will need to focus on rebuilding your credit before trying to get a mortgage, car loan, etc.

Consumers with very poor credit scores between 400 and 450 often have their credit applications rejected, according to FICO, a credit scoring agency. But it doesn't have to be that way. Loans and credit cards for 400 to 450 credit scores are still available.

LLCs follow the same loan application process as other types of businesses. The major difference is who holds liability for the loan funds in case the borrower defaults. With an LLC, the company owners are not personally responsible for the loan funds unless they sign a personal guarantee.

Another option for businesses who need capital but don't have the revenue to back it up is invoice financing, a type of loan that allows businesses to borrow money against their outstanding invoices. This can be a great option if you're waiting on payments from customers, but need the money now.

Business owners with low credit scores must also demonstrate strong, stable cash flow to qualify for a business loan, and lenders may require collateral. For these reasons, an alternative form of financing like a merchant cash advance may be a better option for business owners with bad credit.

Notice: The Paycheck Protection Program (PPP) ended on May 31, 2021. Existing borrowers may be eligible for PPP loan forgiveness. SBA also offers additional COVID-19 relief.

Businesses can use SBA Microloans for a range of purposes, including working capital or buying equipment, machinery, or supplies. Consider SBA Microloans If: You need less than $50,000 of capital and have good credit and a solid business plan.

E-Tran. E-Tran is the SBA's scoring system that lenders use to determine if the SBA will allow them to lend under the SBA's delegated authority. Scores range from 0 to 300, but the only requirement is to get a passing score of 140 or higher. If the applicant passes, the lender may proceed to fund the loan.

SBA loans typically have lower rates and longer terms than you could qualify for with a conventional loan. Although it's easier for a small business to qualify for an SBA loan than a conventional loan, the application requires you to provide extensive documentation of your finances.

You may be able to reapply for an SBA loan, depending on the reason you were denied, the type of loan and the lender status. If you were denied because you don't meet SBA requirements (small business size standards, for example, or industry) you may be able to ask for reconsideration.

How many SBA loans are denied? ›

Based on approval rates from lenders, the combined approval rates equal around 50% at any given time. With SBA loans as a microcosm of this number, applicants can assume that one out of every two businesses has their SBA loan declined.

Many places can offer you a loan without verifying your income. All you have to do is pledge collateral to secure the loan. The value of the collateral will usually have to significantly exceed the loan amount.

EIDL loans are fixed-rate low interest loans for small businesses impacted by the COVID-19 pandemic. As part of the EIDL program, businesses that apply can receive a forgivable $10,000 EIDL Advance Grant. EIDL loans offer 3.75% interest rates (2.75% for non-profits) and up to 30-year repayment terms.

You can use the PPP funds to pay yourself through what's called owner compensation share or proprietor costs. This is to compensate you for a loss of business income. To take the full amount of owner compensation share, you will have to use a covered period of at least 11 weeks weeks.

The SBA does not state specific credit score minimum requirements, but business mentors recommend entrepreneurs have a credit score in the mid to high 600s. Some loan products, like the SBA microloan program, may have SBA loan credit requirements on the lower end.

The SBA uses the FICO Small Business Scoring Service, or SBSS, in many cases to evaluate the credit history of your business. SBSS scores get pulled for SBA 7(a) loan application prescreens as well.

Only direct obligors are reported by SBA since IRS regulations do not consider guarantors to be debtors for purposes of 1099-C reporting. The IRS and the debtor will determine what, if any, income tax obligation may exist with respect to the discharge of debt by SBA.

SBA Express

Lenders are not required to take collateral for loans up to $25,000. May use their existing collateral policy for loans over $25,000 up to $350,000.

Do SBA loans require a downpayment? Yes, the minimum SBA loan down payment requirement is 10% on 7(a) and 504 loans and is based on a business's cash flow and collateral. Weak cash flow or low-value collateral can increase the down payment requirement to up to 30% of the loan amount.

The Express Loan provides an instant, fully automated process from application to funding within Digital Banking. Loan approval and amount is evaluated based on your Credit Union relationship, including factors such as length of membership, previous loan and payment history and deposit history.

Can I get a business loan without revenue? ›

Another option for businesses who need capital but don't have the revenue to back it up is invoice financing, a type of loan that allows businesses to borrow money against their outstanding invoices. This can be a great option if you're waiting on payments from customers, but need the money now.

In short, no. There are several different SBA loan programs, and each program carries its own guidelines describing how funds can and can't be used. You may hear these referred to as “acceptable” or “allowable” use of proceeds or use of funds.

Standard SBA 7(a) Loan: Typically requires collateral equal to loan amount. SBA Express Loan: No required collateral under $25,000, and lenders can use their existing collateral policy for loans between $25,000 and $350,000.

What Are the SBA Loan Collateral Requirements? When you apply for an SBA loan, you will be subject to an ABA (All Business Assets) lien, or blanket lien. Essentially, this means everything your business owns is collateral required for your SBA loan.

We often hear the question, can an SBA loan be used to buy real estate? The answer is simple – yes. The SBA 504 Loan was specifically designed to help growing small businesses expand by purchasing fixed assets such as real estate.

There is no set deposit amount for business loans, as each business is unique. Most lenders need 10 – 30% of the loan value as a deposit. This money can come from savings, working capital, alternative finance instruments or as an external investment.

EIDL loans are fixed-rate low interest loans for small businesses impacted by the COVID-19 pandemic. As part of the EIDL program, businesses that apply can receive a forgivable $10,000 EIDL Advance Grant. EIDL loans offer 3.75% interest rates (2.75% for non-profits) and up to 30-year repayment terms.

In short, the answer is yes—standard SBA loans do require a personal guarantee, although individual lenders have some discretion to determine exactly who from the business has to sign a personal guarantee and what type of guarantee they have to sign.

When you have bad credit, you can still get a small business loan. This is because your credit score doesn't matter as much as the overall financial health of your business. Many lenders require a minimum credit score of 500, at least six months in business, and more than $30,000 in annual revenue.

How can I get a loan with no assets? ›