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SBA Express Loan Requirements

How to Qualify for an SBA Express Loan

SBA Express Loan Requirements

The first and most reassuring thing you should know is that most small businesses qualify for an SBA Express loan. Business owners who want to get an SBA Express loan must first meet the eligibility requirements determined by the SBA under the SBA 7(a) program. The SBA Express loan is for any small business (as defined by the SBA) operating for profit within the United States of America. Additionally, the business should have already looked for funding through other means before seeking financial assistance through the SBA loan program, and must maintain no existing delinquencies or debt obligations to the U.S. Government. SBA-approved lenders will assess the nature of your business and run a number of checks before they approve financing. Below is our comprehensive list of requirements for borrowers. 

General Requirements for the SBA Express Loan

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Basic requirements of the business:

  • Business must operate for profit

  • Must engage in operations within the USA

  • Should be in operation for at least 2 years

  • Must qualify as a small business according to SBA size standards

  • Must be able to prove/show a need for financing

  • Business owner must have already financed the business through alternative means

  • Must be able to show that funds will be used for sound business purposes

  • There can be no delinquencies on previous debts to the government

As with all other federally sponsored loan programs, the government requires borrowers to be of good character and demonstrate the ability to repay the SBA Express loan debt.

Businesses that are ineligible for SBA Express financing:

  • Financial businesses that engage in lending

  • Life insurance companies

  • Consumer and marketing cooperatives

  • Speculative businesses

  • Businesses that have a focus on political interests and/or lobbying

  • Businesses involved in pyramid sale distribution plans

  • Businesses that primarily deal in the teaching of religion

  • Businesses that can attribute over a third of their gross annual revenue to legal gambling activities

  • Businesses that promote or partake in any illegal activities

  • Businesses under the ownership of developers or landlords with no active role regarding assets acquired or improved by the loan proceeds

  • Any business or club that limits its number of patrons or members for reasons not related to capacity

  • Government-owned businesses

  • Loan packagers that deal with SBA loan products

  • Businesses that present or profit from (whether directly or indirectly) acts of a sexual nature

  • Any business where the CDC or lender (including any and all associates) owns an equity interest

A business may also be ineligible if financing is readily available through other reasonable means like identical loan terms being offered through a financial institution without an SBA guarantee, or the use of personal assets that would not burden the business owner financially.


SBA Express Loan Borrower Requirements

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Expedited turnaround times for SBA Express loans are the result of a greater independence placed on the lender by the SBA. Approved SBA lenders use their own forms. Some lenders are even able to assess whether you are eligible for Express Loan financing without seeking further confirmation from the SBA. 

For starters, the borrower's personal credit score is a major determining factor of how much funds lenders are willing to provide. Generally, a credit score of between 600 and 650 ensures loan amounts between $30,000 and $150,000. A score of 650 or higher raises borrower eligibility for loans greater than $150,000.  Lenders generally want to see applicants with credit scores of 680 or higher for the maximum loan amount, and with a debt service coverage ratio (DSCR) of 1:1 or higher.

A typical SBA Express Loan application will require the borrower to provide:

  • Borrower application forms (including the SBA Form 1919)

  • Plans for loan proceeds

  • Personal history statement (if applicant has a criminal history)

  • Agreement of compliance (if funds are used for construction)

  • An up-to-date profit and loss statement

  • Financial projections

  • A list of owners and affiliations

  • All licenses and certifications relevant to the business

  • A full history of previous loan applications

  • All signed tax return documentation of both the owner(s) and of the business dating back at least 3 years

  • Personal resumes of all owners with more than a 20% stake in the company

  • Any and all business-related leases

Lenders are also required to make sure the applicants you have identified are allowed to do business with the government. Finally, lender discretion will also play a part in determining loan approval.

If you're approved for a loan, you'll receive your funds within 90 days, and will be required to pay a guaranty fee to the SBA within this time period. The fee is a percentage of the amount guaranteed under the SBA Express loan program, or 3% on the guaranteed portion of loan amounts between $150,001 and $350,000.

SBA Express loans are a quick and efficient way for you to bring increased cash flow into your business. To learn more or to apply, visit SBAExpress.Loans.