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SBA Express: A loan for small businesses

EDITOR’S NOTE: This post is sponsored by Oriental bank.

It has been a hard year for small and medium businesses (SMEs). The COVID-19 pandemic stopped the economy, and SMEs were the first to feel the consequences. Months with little to no activity can have a devastating effect on a business.

Luckily, the Small Business Administration (SBA) came up with a support plan. The SBA 7(a) loans are an easy way for an entrepreneur to access credit and inject some capital into their business. It’s a nation-wide plan executed by local lenders, like Oriental Bank.

Among all the types of 7(a) loans, the SBA Express is one of the most convenient. With a SBA Express loan, a small business can receive up to $500,000, strictly destined to improve its operation. The Small Business Administration acts like a partial guarantee (up to 50%), and that means that SMEs with low credit scores can now access loans on a much lower interest rate. This is a fast, low-requirement credit, and can be lifesaving for a struggling business.

Requirements for an SBA loan

There are few requirements for candidates to a SBA loan. Of course, documents proving eligibility have to be provided to the local lender (like Oriental Bank) in order to get it. In a broad sense, the requirements are the following:

  • The business has to operate for profit.
  • Has to operate in the United States or its territories, like Puerto Rico.
  • Has to be considered a SME by the SBA.
  • Has to prove that it needs financing.
  • Has to demonstrate that the loan is going to be used for commercial purposes only.
  • Can’t have delays or losses on other federal guaranteed loans.

Uses of an SBA loan

The SBA Express loan has to be used for a commercial purpose, but that includes a wide range of possibilities. A small business owner can use that money injection to, for example, pay debts with suppliers, or to execute old contracts. Another possible use of the loan is to buy equipment, machinery, furniture, accessories, supplies or materials, all things much needed for most businesses.

But the SBA Express loan is not only for business owners who need money for their everyday, short-term operational expenses. It can also be used to finance a long-term expansion. If a business owner wants to buy a commercial property, he is also eligible for this loan. The SBA Express can cover the costs of a renovation or a construction and can also finance the establishing of a new branch of an existing business; in the right conditions, it can even help to refinance an existing commercial debt.

If you want more information about the SBA Express or other kinds of loans, you can access orientalbank.com.

Certain terms, conditions and restrictions apply. Member FDIC.

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This story was written by our staff based on a press release.

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