Can an SBA Express line of credit be renewed each year?
Short answer
Yes, within the program's maximum term. SOP 50 10 8.1, Appendix 17, Para. B.3 allows yearly renewals and bars renewal fees. An extra guaranty fee is due if a line of 12 months or less is extended past 12 months.
Yes. An SBA Express line may be set up as renewable each year (SOP 50 10 8.1, Appendix 17, Para. B.3). It must stay within the maximum of 10 years, including any term-out period. Renewal is the lender's decision. SBA allows it but does not require it.
A 12-month line can start without a term-out
A revolving loan with a maturity of 12 months or less may be set up with no term-out period (Para. B.3). If the lender renews it or extends the maturity past 12 months, the term-out rule applies. You then need a term-out period at least as long as the draw period.
Fees at renewal
- The lender may not charge you a renewal fee (Appendix 17, Para. B.3; Sec. A, Ch. 4, Para. C.4).
- SBA's FY2027 upfront fee on a maturity of 12 months or less is 0.25% of the guaranteed portion (Information Notice 5000-881797, p. 2).
- If that maturity is extended beyond 12 months, an additional upfront fee is due.
- The lender must pay that fee to SBA within 30 days of agreeing to the extension, or the guaranty is canceled. It may then charge the fee to you (Sec. A, Ch. 4, Para. C.1.a.v).
Ask for the renewal terms in writing before you close.
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