SBA rules · SOP 50 10 8.1
What are the SBA Express loan requirements?
SBA Express provides up to $500,000 with a 50% SBA guaranty under an Express Lender’s delegated authority, allowing lenders to largely follow their own underwriting, credit, and collateral policies used for similarly sized non-SBA commercial loans.
Quoted from SBA SOP 50 10 8.1Every quote checked word for word
In detail
- Eligibility and loan limits: Applicants must meet standard Section A core eligibility requirements; the maximum gross loan amount is $500,000 across all Express-type loans to the borrower and its affiliates, with a maximum SBA guaranty of 50%.
- Processing and underwriting: SBA Express loans are processed solely under delegated authority without prior SBA review, and lenders must use prudent commercial credit analysis or validated business credit scoring models to demonstrate repayment ability and that credit is not available elsewhere.
- Equity and credit decisions: Decisions regarding whether to require an equity injection or how to factor in past bankruptcies are left to the lender's business judgment; however, if the lender requires an equity injection, it must verify the injection if that is its standard practice for non-SBA commercial loans.
- Collateral requirements: Collateral is not required for loans of $50,000 or less; for loans greater than $50,000, lenders must follow general collateral requirements but may use their own collateral policies and procedures for similarly sized non-SBA guaranteed commercial loans.
- Maturity and interest rates: Term loans follow standard 7(a) maturities up to 25 years for real estate or 10 years for working capital, while lines of credit may not exceed 10 years total (advances are prohibited after the initial 60 months and the term-out period must not be less than the draw period), and lenders may charge default interest rates or utilize their own commercial base rates subject to 7(a) interest rate caps.
The source
What the SOP says
“SBA Express loans are loans that are $500,000 or less and may only be made by a Lender with SBA Express authority. SBA Express Lenders may not request that an SBA Express loan be processed under non-delegated authority by SBA’s LGPC.
“The maximum aggregate SBA Express loan amount is $500,000 (gross), inclusive of all outstanding SBA Express, Community Advantage Pilot loans, Community Express, and Patriot Express loans the Applicant and its Affiliates may have.
“For SBA Express loans: 50%.
“For SBA Express loans, the credit decision, including how much to factor in a past bankruptcy or whether to require an equity injection, is left to the business judgment of the Lender. Also, if the Lender requires an equity injection and, as part of its standard processes for similarly-sized, non-SBA guaranteed commercial loans verifies the equity injection, it must do so for its SBA Express loans.
“For SBA Express Loans of $50,000 or less, collateral is not required. For SBA Express Loans greater than $50,000, the Lender must follow the General Requirements in this Appendix but may use its own collateral policies and procedures for similarly sized, non-SBA guaranteed commercial loans in place of SBA's detailed collateral procedures, unless another SBA Express-specific requirement applies.
“Revolving loans of more than 12 months must be structured with a term-out period that is not less than the draw period. Once the loan is amortized, no additional draws are permitted. Under no circumstances may there be any advances after the initial 60 month period.
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This page quotes the SBA's Standard Operating Procedure 50 10 8.1. Lenders can ask for more than the SBA minimum. It is general information, not a loan approval or legal advice.