Amortization refers to debts that are set to be paid off using a fixed repayment schedule. The loan amount is paid in regular installments over a set time period. Amortized loan payments usually consist of a principal amount combined with the interest specified by the loan terms. Payments begin with high interest paid for the first payment, then the interest gradually reduces over time, allowing more contribution toward the principal amount. SBA Express loans are an example of amortized loans.

SBA Express Loans are short-term loans with a maximum loan amount of $350,000. The loan term is typically 7-25 years, depending on the purpose of the loan. The interest rate is typically the prime rate plus a margin, and the amortization schedule is based on the loan term. The amortization schedule will show the total amount of principal and interest that will be paid over the life of the loan, as well as the monthly payment amount.

For example, if you take out an SBA Express Loan for $100,000 with a 7-year term and an interest rate of 5%, your amortization schedule would look like this:

As you can see, the monthly payment amount stays the same throughout the life of the loan, but the amount of principal and interest paid each month changes. The principal portion of the payment increases each month, while the interest portion decreases. At the end of the loan term, the balance is paid off in full.

The main benefit of amortization for SBA Express Loans is that it allows you to spread out the cost of the loan over a longer period of time. This can help to reduce the amount of interest you pay over the life of the loan, as well as make it easier to manage your monthly payments. Additionally, amortization can help to reduce the amount of risk associated with the loan, as it allows you to pay off the loan gradually over time.

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The main drawback of SBA Express Loans is the amount of funding they can provide. These loans are capped at $350,000, significantly less than the SBA 7(a) program's $5 million maximum.

Additionally, SBA Express Loans typically require collateral equal to the loan amount, while no required collateral is needed for loans under $25,000.

The SBA Express Loan offers a variety of amortization options, including fixed-rate, variable-rate, and interest-only payments. Fixed-rate loans have a fixed interest rate for the life of the loan, while variable-rate loans have an adjustable interest rate that can change over time. Interest-only payments are available for up to five years, and the remaining balance is due at the end of the loan term.

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