What is the difference between an SBA Express line and term loan?
Short answer
A line lets you borrow, repay and borrow again during a draw period. Its term can reach 10 years, including any term-out period. A term loan is one balance repaid on a schedule set by the use of proceeds (SOP 50 10 8.1, Appendix 17).
A line of creditA credit limit you can draw on, repay and draw on again. lets you borrow, repay and borrow again during a draw period. A term loan is one balance repaid on a schedule (SOP 50 10 8.1, Sec. A, Ch. 3, Para. A.2; Appendix 17).
SBA Express line of credit
- Maximum term: 10 years, including any term-out period (Appendix 17, Para. B.3).
- Draws: no advances after the first 60 months.
- Term-out: a term-out period at least as long as the draw period on revolving loans over 12 months.
- SBA notes that a borrower on a line pays interest only on the funds in use (89 FR 57353).
SBA Express term loan
- Maturity depends on use. Working capital: 10 years. Real estate: 25 years, plus any reasonable construction or renovation period (Appendix 17, Para. A).
- Balloon payments are not allowed (13 CFR 120.214(e)).
What is the same
The $500,000 limit, the 50% guaranty and the variable-rate ceilings apply to both (Sec. B, Ch. 2).
Cost and access
- Upfront fee: a maturity of 12 months or less pays 0.25% of the guaranteed portion. Longer maturities pay the regular schedule (Information Notice 5000-881797, p. 2).
- A line can be accessed by credit or debit card, if the lender offers that and the loan has an enforceable note (Sec. B, Ch. 6, Para. D.11).
Which structure a lender offers varies by lender.
Sources
- SOP 50 10 8.1, Appendix 17, Paras. A (p. 390) and B.3 (Para. B begins p. 391)
- SOP 50 10 8.1, Sec. A, Ch. 3, Para. A.2 (Para. A begins p. 51)
- 13 CFR ยง 120.214(e)
- 89 FR 57353 (July 15, 2024)
- SBA Information Notice 5000-881797, p. 2 (effective October 1, 2026)
- SOP 50 10 8.1, Sec. B, Ch. 6, Para. D.11 (Para. D begins p. 207)
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