Allen & Gooch Blog


Express Loan Changes Under the CARES Act

The CARES Act is the recent legislation targeted to providing assistance to those impacted by COVID-19. The legislation includes changes to several existing programs including the existing SBA Express Loan program. While the specifics of the changes and administration of the program will become more clear in the coming weeks, there is some limited information available now.

SBA Express loans are a type of 7(a) SBA loan subject to expedited review. Typically, an applicant will learn whether their application has been accepted or denied within 36 hours. Applicants apply with their approved local lender using the lender’s forms in connection with the SBA Form 1919. The lender makes the final eligibility decision. The interest rate can be negotiated, as long as it does not exceed the SBA maximum.

CARES increases the maximum limit for such a loan from $350,000 to $1,000,000 until December 31, 2020. Further, the SBA fee for veterans for an Express loan has been waived. In the past, the maximum SBA guarantee was 50%, but it appears that the CARES Act modifies the 7(a) guarantee to 100% through December 31, 2020 with a graduated reduction after that point for certain types of loans.

On a related note, if you already have an existing relationship with an SBA Express loan lender, you can qualify for an Express Bridge Loan for up to $25,000 with reduced paperwork to help you bridge the gap while you wait for the approval of an Economic Injury Disaster Loan.

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.