There are two 7(a) loan process options with different time frames. In addition to standard procedures, SBAExpress processing offers an expedited turnaround.
SBAExpress gives small business borrowers an accelerated turnaround time for SBA review. A response to an application will be given within 36 hours. SBAExpress generally follows SBA’s standards for the 7(a) loan program.
- The maximum loan amount is $350,000.
- The maximum SBA guaranty percentage is 50%.
- Lenders and borrowers can negotiate the interest rate. Rates can be fixed or variable and are tied to the prime rate (as published in The Wall Street Journal), LIBOR, or the optional peg rate (published quarterly in the Federal Register) but they may not exceed SBA’s maximum rates. Lenders may charge up to 6.5 % over the base rate for loans of $50,000 or less, and up to 4.5 % over the base rate for loans over $50,000.
- SBA permits qualified lenders to determine loan eligibility.
- Revolving lines of credit are available up to seven years and maturity extensions are only available when the loan is approved.
- Lenders primarily use their own forms and procedures for loan processing.
- Lenders are not required to take collateral for loans up to $25,000; however, they may use their existing collateral policy for loans over $25,000 and up to $350,000.