How do you get approved for a SBA Express loan?

To get approved for an SBA Express loan, the business must operate for profit and in the United States. The business must have at least two years of financial statements and show a need for financing.

Author: Brad Nakase, Attorney

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How to Apply for an SBA Express Loan

SBA Express Loans are a great resource for small businesses that are looking for quick funding options but do not qualify for financing from traditional lenders. That said, a small business must still meet certain loan requirements to be eligible for SBA Express Loans, as well as complete their application.

Prior to beginning the loan application process, it is important to understand what SBA loans are and how they work. First, a business owner should know that the Small Business Administration does not itself offer small business loans. Rather, the SBA guarantees a part of the loan. When it comes to SBA Express Loans, the SBA guarantees 50% of the loan, but these percentages can vary for the organization’s other loan programs.

By guaranteeing a business loan, the SBA reduces the risk for lenders, which makes it more likely they will agree to lend money. Lower risk also means lower and therefore more affordable interest rates for borrowing business owners. For example, SBA Express Loan interest rates have a maximum rate set at 4.5 to 6.5 percent above prime.

To qualify for this loan, the small business needs to operate within the United States and be a for-profit company.

Also, there are other qualifications for an SBA loan that small business owners must meet. This article will address those specific requirements.

Let us now review the steps involved in the SBA Express Loan application:

  1. Proof of Invested Time and Money into the Business

The SBA’s mission is to support small business owners who have invested in their own ventures. When an entrepreneur has some stake in the game, then he or she reduces the risk for lenders because the possibility of default is lower. Therefore, it is a good idea to record every dollar spent and hour worked for the business.

It would be wise to document the following information prior to applying for an SBA Express Loan:

  • The amount of money a business owner has invested in their business, as well as its products and services
  • The amount of money other people have invested in the business (business partners, investors, donors, or outside sources of funding)
  • How long the company has been in operation
  • The number of hours worked per week
  • Equity structures and stakeholders
  1. Prove There Are No Other Lending Options

The SBA thinks of itself as a last resort option. This is because they agree to guarantee express loans for businesses that cannot qualify for other funding options. Because of this, a business owner will need to offer proof that he or she has been unsuccessful in getting a loan from traditional lenders. This means that a business owner should first apply for traditional loans before applying to the SBA, and thereafter offering evidence of all rejections.

While this process can take a lot of time, it will help improve one’s chances of being approved for an SBA loan.

  1. Know the Business Lending C’s

When studying express loan applicants, the SBA refers to the “three C’s” of business lending: cash flow, credit, and collateral.

These three factors are commonly used by lenders when they consider loan applications. A business owner should review the three C’s to increase their chances of getting approved for an SBA loan.


This refers to a business owner’s history of taking out loans and paying debts on time and in full. Lenders would like evidence that a business owner pays his or her weekly and monthly bills on time. A business owner should review his or her credit score prior to applying for an SBA loan to make sure that they meet the credit score requirements.

Cash Flow

A business owner will need to calculate his or her monthly income, then subtract monthly expenses in order to figure out his or her cash flow. This metric offers a picture of the company’s financial health. It is important that a business owner analyzes his or her monthly cash flow prior to submitting a loan application.


A business’ collateral assets may be used to secure a small business loan amount. If a business possesses significant collateral, then this can help a business owner get approved even if other parts of the business are not as strong (such as credit history).

  1. Work with a Partnering SBA Lender

To get an SBA loan, a business owner will work with an approved partner lender.

A business owner will first need to fill out the business financing lender’s loan application. This process and the paperwork required differs according to the specific lender. Luckily, the SBA provides an online Lender Match tool that can help a business owner get started.

How to Identify an SBA Approved Lender

  • Complete the required loan forms: A business owner will need to provide contact information, as well as to describe his or her company’s industry, operations, and strategies.
  • Describe planned use of funds: A business owner should describe how he or she plans to use the financing to support the business as well as to confirm that the reasons are SBA-approved. For instance, if a business owner wants an Export Express Loan, he or she needs to operate in the export market and use the funding for export-related expenses.

A business owner should see which of the following statements apply to their company:

  • I have a solid business plan
  • I have financial projections
  • I am creating revenue
  • I have fixed assets to offer as collateral
  • I am a veteran

The more of the above statements a business owner can agree with, the more likely it is that he or she will have a successful loan application. Also, an entrepreneur should be sure to include a business plan and financial projections with his or her loan application. Sometimes, it may be useful to offer information regarding tax returns. Supplying these details can help a lender know how a business owner manages their company, which allows the lender to analyze their needs more accurately.

After a business owner finishes the above forms, then he or she will be matched with possible SBA lenders. It is important to remember that the SBA does not guarantee the total business loan amount. Rather, they guarantee only a part of it. This means that a business owner will have to impress potential lenders.


Similar to applying for a personal loan, the SBA Express Loan application process can be intense. This is because both the SBA and the business lender are interested in reducing their risks and maximizing their returns. For a business owner to be approved for this type of loan, he or she must be sure to complete the loan application accurately and offer the required paperwork.

After a lender approves a business owner’s loan application, the SBA will typically offer a guarantee within 24 to 36 hours. That said, a business owner should prepare themselves to wait longer. There can be delays if an applicant provided inaccurate or incomplete information on their application.

While SBA loans are a great resource for small businesses, there are plenty of other lending choices available. These options include loans from alternative lenders, business lines of credit, merchant cash advances, business credit cards, and industry-specific loans.

This means that if a lender does not approve an SBA Express Loan application, or a business owner requires immediate working capital, there are always other options to consider. While the loan application process can be intimidating, and a business owner may be under pressure to find funding, he or she should not be afraid to take the time to consider various options.

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