Understanding SBA Express Loans and Lines of Credit

If you own a small business, moving fast is most likely second nature to you—that includes finding the funding you need, when you need it. Most businesses need loans and lines of credit at various stages of their start-up and growth as well as for ongoing operations.

It’s important to understand what type of credit facility is best suited for each business need and while your banker should be ready and willing to guide you, it’s good to know the basic options beyond using your credit card—which comes with the highest interest rate. You may also have reasons to look beyond traditional financing. Perhaps your business doesn’t have a long enough track record or you don’t have a sufficient alternative repayment source.

These types of situations might be well suited for U.S. Small Business Administration (SBA)-backed financing. One type of SBA funding that’s gaining steam is the SBA Express Loan and Line of Credit, which offers faster, more flexible funding than traditional SBA loans but maintains the longer repayment terms and reduced down payments that SBA options are known for.

Here is what you need to know about SBA Express—including ideal uses and tips for the application process.

What is an SBA Express Loan and Line of Credit?

An SBA Express Loan and Line of Credit is available through the SBA’s 7(a) loan program. You can borrow $5,000 to $500,000 with more streamlined paperwork and expedited approval and funding in as few as five days through Banner’s QuickStep^TM program.  Like other SBA financing, SBA Express is offered by private lenders and backed by the U.S. Small Business Administration. The bank you work with will use its established processes to review and approve the application.  

What type of business needs qualify? 

Say you have an excavation business and you need a new dump truck to haul material faster and more easily—which in turn can make your operation run with greater efficiency. That type of equipment is expensive, but with the flexibility of SBA Express financing you may qualify when a traditional loan would not be an option. SBA Express may also offer a lower down payment and longer repayment period.

An SBA Express Loan can help you with:

• Purchasing equipment, fixtures, furniture or supplies
• Starting or purchasing an existing business
• Improvements to your place of business (for example, wall coverings, flooring or lighting)
• Refinancing high-interest business debt 

You can also open a line of credit as part of your SBA Express Loan to support working capital needs (e.g. cash on hand, accounts receivable, inventory, etc.).

Tips for putting together your application

First, look for an SBA Preferred Lender, like Banner, for even faster time from application to funding. This is a special designation provided by the SBA which authorizes the lender to approve and underwrite the loan without undergoing the full SBA review process, allowing for faster funding.

Additionally, consider the following before applying:

• Make sure your credit is in good shape: lenders may consider the overall financial health of the business owners when reviewing your loan application.
• Gather two years of personal and business tax returns (Schedule C for sole proprietors).
• Review the required information you’ll need to submit on the SBA’s form 1919.
• Be ready to provide proof that your business fits within the SBA size requirements.

Want more insights on SBA 7(a) financing? Check out our other popular blogs on the topic:

• SBA Loan Tips
• How to Choose the Best SBA Option For Your Business
• What to Know Before Applying for an SBA Loan