8 Ways the SBA Express Program Can Help Grow Your Business

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When a small business owner gets stuck, they have the SBA to turn to. Here’s how one SBA loan program can help them secure up to $500,000. 

Are you a business owner and feeling stuck? You want to grow your business and expand your operations. You have the business down to a fine art and now want to see how far you can take it. However, to do so, you’re going to need capital — money to spend on the essentials needed to make growth a reality. Fortunately, the Small Business Administration (SBA) has been around since 1953, helping businesses like yours become all they can be. This is how one SBA loan program can help.

1. The SBA Express Program loan can provide an influx of cash

Whether you operate an online business or have several small shops spread across town, the SBA has well-tested ways to help. In addition to some of the practical, everyday knowledge-sharing programs the SBA has in place, it also provides loan guarantees to businesses that are ready for the next step. The SBA Express Program is one such loan.

The SBA Express Program loan offers loans up to $500,000, and as the name suggests, those loans are streamlined in a way that ensures you’ll have a response to your loan application within 36 hours. From that point, it takes from 20 to 30 days to get the money into your business checking account.

2. You don’t have to go through the application process alone

Whether you’re applying for a personal loan through your neighborhood bank or applying for a loan through an SBA-approved lender, the process can be intimidating. Fortunately, the SBA has people who will explain the process and offer insights into how to land the best loan.

3. The SBA will have your back

If you’ve attempted to secure a loan through another financial institution but have been turned down, the SBA will act as your wingman by guaranteeing up to 50% of your loan amount. That way, the lender knows that if you miss payments, the SBA will step in to repay 50% of the loan. That’s a powerful tool to have in your arsenal.

4. The interest rate you pay will be limited

The SBA does not offer money directly. Rather, you’ll apply with one of its approved lenders. You can negotiate the interest rate with the lender, but the rate can never exceed an amount set by the SBA. In other words, the SBA will ensure that you’re not paying a ridiculous amount to borrow money.

5. You’ll have adequate time to repay the debt

If your loan is for financing real estate for your business, you’ll have up to 25 years to pay it off. Otherwise, terms range from five to 10 years. Keep these terms in mind as you determine how much you would like to borrow.

6. It’s the lender’s ballfield, but the SBA is playing on your side

While the SBA sets some loan standards and backs 50% of your loan, you’ll still be dealing with an outside lender. For example, other than SBA Form 1919, you’ll be required to fill out the lender’s own forms and follow its loan procedures. Lenders are not required to request collateral for loans up to $25,000. However, a lender will use its standard collateral policy for loans over $25,000. And it’s the lender that makes the final credit decision.

Still, you’re not alone. Any time you feel stuck or are confused about something being asked of you, the loan experts at the SBA can provide you with answers.

7. You’ll have an influx of cash to grow your business

Here are some of the acceptable uses of the Express Program loan:

To cover the cost of long-term working capital, including the purchase of inventory, furniture, equipment, machinery, supplies, materials, and administrative expenses like accounts payable and receivable.To provide short-term working capital for things such as seasonal financing.To cover the costs associated with construction and renovation.To purchase a new business or expand an existing business.To refinance existing business debt (with some restrictions)

While we’re talking about acceptable uses of the loan, here are some of the prohibited uses:

To repay delinquent taxes.To reimburse an owner for a previous personal investment in the business.To make changes that will not have a positive impact on the business.

8. You have a better chance of being eligible for the loan

Loan eligibility is quite basic. It includes:

The business must be operated for profit.The business must be located in the U.S.The business must be in operation for at least 24 months.The owner must be able to show the need for financing.The owner must have already attempted to secure financing through alternative means.The owner must provide evidence that the funds will be used for sound business purposes.The business cannot already owe money to the federal government.

In some cases, the old adage “it takes money to make money” proves to be true. If you currently find yourself in the position of needing money to grow your business, the SBA Express Program loan is worth exploring.

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