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SBA Express Loans vs. Standard SBA 7(a) Loans

When it comes to getting a loan under the SBA 7(a) program, borrowers have a few options. The most popular among them include the standard SBA 7(a) loan, and the SBA Express loan. In this article, we’ll review some of the major differences between the two, in order to help you determine which type of financing might be the best for your small business.

SBA 7(a) Standard vs. Express Loans: What’s The Difference?

The standard SBA 7(a) loan and the SBA Express loan have a variety of differences, including:

  • Maximum Loan Amount:

    • Standard SBA 7(a) Loan: $5 million

    • SBA Express Loan: $350,000

  • Average Approval Time:

    • Standard SBA 7(a) Loan: 60-90 days

    • SBA Express Loan: 45-60 days

  • Required Collateral:

    • 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

The Similarities Between Standard 7(a) and SBA Express Loans

Despite their differences, SBA 7(a) loans and SBA Express loans have a number of major similarities, including:

  • Credit Score Requirements: 640 minimum, with most lenders preferring 680+

  • Loan Terms:

    • Working Capital: Up to 10 years

    • Equipment: Up to 10 years

    • Real Estate: Up to 25 years

Plus, both kinds of loans are subject to general SBA eligibility requirements, meaning:

  • Businesses must operate for profit

  • Businesses must be in an approved industry (for example, no lending, gambling, speculation, real estate investing, or illegal businesses)

  • Businesses must already have exhausted other financing methods (personal savings, friends and family, bank loans, etc.)

When Is An SBA Express Loan Your Best Option?

The main benefit of the SBA express loan is speed; getting an SBA Express loan can cut down the entire loan approval process by a month or more. So, if your business is in a financial crunch due to unexpected expenses, or needs new working capital to finance a big order or a busy season, getting an SBA Express loan could be the perfect solution.