Glossary of Business Credit Terms

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

SBA Export Express Loan

What Is SBA Export Express Loan?

SBA export express loan is one of the initiatives that boost exports and simultaneously encourage small scale businesses. Many small American businesses think they cannot compete globally. However, 97 percent of small businesses are exporters. SBA offers Export express loans to help small businesses to export or expand globally by providing financing up to $500, 000. It also provides ease to a borrower as well as a lender and is also convenient and quick as SBA provides a response in 36 hours or less.

How does SBA Export Express Loan Work?

Export Express Loans is US government loan that funds participation in foreign trade shows or trade missions. To be eligible for the loan the loan should help the business to expand into new markets or capture existing markets and the business should be operational for at least a year not necessarily exporting already.

There is a four-step process to apply for this loan.

  1. Contact your existing lender and determine if it provides the facility of SBA Export Express loans.
  2. Submit the application forms with SBA’s borrower information form to your lender.
  3. If your request is approved the lender will submit eligibility information to SBA.
  4. SBA will process the application and if you qualify for the loan it provides a reply in less than 36 hours.

Should You Consider SBA’s Export Express Loan for Your Business?

Before considering to apply for an export express loan you should completely evaluate the option by taking a closer look at its advantages and disadvantages.

Advantages

  • It is an easy way which requires less documentation. Not only are these loans easy for people to understand but the simple application process with less documentation makes it more attractive for people to apply for them.
  • It is a fast process. The SBA evaluates and responds to an application within 36 hours whereas it takes5 to 10 business days on conventional loans.
  • It provides flexibility as they are available as term loans or revolving line of credit.

Disadvantages

  • Provides smaller loans. The maximum amount that can be financed through export express loans is $500K. Not a feasible option for businesses that require a higher financing.
  • Interest rates are high which makes the lenders skeptical if these loans are worth the risk.
  • It is difficult to qualify for these loans. Even though the loans might seem to be simple and quick, but they are tough to qualify for.

What Are the Costs for SBA Export Express Loan Work?

SBA guarantees 90 percent for loan of $350,000 or less and 75 percent for loans over $350,000. The interest rates charged on these loans are 4.5 percent to 6.5 percent more than the prime rate. The loan should be repaid up to 7 years for line of credit and for 10 years for working capital equipment or leasehold improvements and up to 25 years for real estate. Collaterals are required for loans more than $25000. However, exceptions apply to line of credit.

Sign Up and Manage Your Credit Now

We're here to help you build your business credit.

Get Started Free

Ready to grow your business?

Stay up to date with the latest insights, trends and best practices for your business.