SBA Express Line of Credit

These lines of credit can really provide a boost to your business growth. As mentioned in previous posts, you will want to use any revolving line of credit for things that will be paid back within 12 months. If you suspect that it will take you longer than 12 months to pay back the money you borrow on your SBA Express Line of Credit, you should consider purchasing it another way.

Currently the SBA has raised the guarantee limit to $1,000,000 for these lines of credit; however, if you discuss it with your lender they will probably only be willing to issue a line of credit for about $350,000 max. Although the SBA is willing to give a larger guarantee, the lenders remain conservative with their lending policies. The lender is the issuer of the SBA Express Line of Credit. The SBA will not be able to give you this line of credit without a lender.

I have issued a a few of these instruments over the past few years. The line of credit is ideal for growing businesses that need to support inventory and accounts receivable but have little collateral assets to support the request. Most businesses have strong historical cash flows that help justify the underwriting for this type of credit. Lenders use the SBA guarantee to mitigate the collateral risk for the commercial credit line.

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