How long can an SBA Express term loan run?
Short answer
It depends on what the loan buys. SBA Express term loans follow the general 7(a) limits in Appendix 17, Para. A of SOP 50 10 8.1: 10 years for working capital and, for real estate, 25 years, plus any reasonable construction or renovation period.
An SBA Express term loan follows the general 7(a) maturity limits, which depend on what the money buys. Appendix 17, Para. A of SOP 50 10 8.1 applies because the SBA Express paragraph in that appendix (Para. B.3) covers lines of creditA credit limit you can draw on, repay and draw on again. only.
Maximum terms by use
- Working capital, inventory and intangibles, including goodwill: 10 years.
- Equipment, fixtures and furniture: 10 years, or up to 15 years if the IRS asset class useful life supports it.
- Real estate: 25 years, plus any reasonable construction or renovation period.
- Leasehold improvements: 10 years, plus up to 12 months to complete the improvements.
- Mixed uses: a blended maturity, or up to 25 years if 51% or more of the proceeds are for real estate.
- Buying a business: 10 years of amortization, with only the real estate portion allowed up to 25 years on a blended basis. Appendix 15, Para. B.1 governs.
The maximum is not automatic
Every 7(a) loan needs a stated maturity. SBA also requires the shortest appropriate term based on the use of proceeds and the borrower's ability to repay (Appendix 17, Para. A; 13 CFR 120.212). A lender can offer less than the maximum, and terms vary by lender.
Balloon payments
SBA does not allow balloon payments (13 CFR 120.214(e); Appendix 18). Your payments must retire the loan by maturity.
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