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Effective October 1, 2008, SBA introduced the newly restructured and enhanced Community Express Pilot Loan program, which has been redesigned to better focus SBA’s financial and technical assistance resources on the needs of the Nation’s underserved communities. Under this program, approved SBA lenders are being authorized to adopt SBA’s most streamlined and expedited loan procedures to provide a unique combination of financial and technical assistance to borrowers located in these communities.
In restructuring Community Express, SBA has clarified the communities that are eligible, which generally comprise SBA’s Historically Underutilized Business Zones (HUBZones) and those communities identified as distressed through the Community Reinvestment Act (CRA). (Additional information on HUBZone areas is available at http://map.sba.gov//hubzone/init.asp and on CRA areas at http://www.ffiec.gov/Geocode/default.aspx.)
In addition, to encourage small businesses start-ups, SBA also makes eligible loans of $25,000 or less for Community Express, regardless of where small businesses are located.
SBA has also clarified its technical assistance (T/A) requirements, and has made its online technical assistance facilities available to borrowers under the program. (Community Express borrowers may initiate Community Express online technical assistance at: http://web.sba.gov/sbtn/sbat/index.cfm?Tool=1.)
About Program
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Issue:
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SBA Community Express
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Maximum Loan Amount:
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$250,000
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Maximum SBA Guarantee Percent:
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Follows Standard SBA Guarantee Percent
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Interest Rate:
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Standard SBA rates apply: Lenders may charge up to Prime plus 2.25% for maturities under seven years and Prime plus 2.75% for maturities of seven years or more, with rates 2% higher for loans of $25,000 or less and 1% higher for loans between $25,000 and $50,000.
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Eligibility Decision:
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By SBA
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Revolving Lines of Credit:
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Allows revolving loans up to 7 years
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Turnaround Time:
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Mostly within 36 hours
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Forms:
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Lender uses mostly own forms and procedures
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Collateral:
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Lenders are not required to take collateral for loans up to $25,000. Lenders may use their existing collateral policy for loans from $25,000 - $250,000.
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Credit Decision:
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By Lender
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Technical Assistance:
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Lender must ensure borrower receives appropriate technical assistance (T/A) but may use SBA’s Small Business Training Network (SBTN) and/or other SBA T/A resources to fulfill T/A requirements. Lender must document provision of T/A in loan file.
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Lender Participation in Community Express:
Existing SBA lenders interested in participating in Community Express should contact their local SBA district office, but generally must demonstrate that they:
(a) Can effectively process, close, service, and liquidate SBA loans;
(b) Have a history of acceptable currency, default rates, and loss rates;
(c) Are in compliance with applicable SBA Loan Program Requirements;
(d) Have received a satisfactory review/examination from OCRM;
(e) Have been current in filing SBA required 1502 reports and in remitting required guaranty and servicing fees;
(f) Have at least an 85 percent currency rate on its SBA 7(a) loan portfolio for the last 3 complete fiscal years;
(g) Are in good standing with their federal/state oversight authorities; and,
(h) Are not subject to any SBA enforcement actions.
Technical Assistance for Borrowers:
Technical Assistance is a critical component in the success of the small business entrepreneur, and therefore it remains a key requirement under Community Express, which must be encouraged and arranged by the lender. However, under the revised Community Express, lenders have the option of using SBA’s online training environment (www.sba.gov) as well as SBA’s other T/A resources (Small Business Development Centers (SBDCs), Service Corps of Retired Executives (SCORE), Women Business Centers (WBCs), and Veteran Business Opportunity Centers (VBOCs)), to meet the T/A requirements under Community Express. While lenders are not required to use SBA’s online services or other SBA T/A resources, they must ensure that each Community Express borrower receives appropriate T/A. Also, lenders must document in their loan file that appropriate T/A was provided to the borrower under Community Express.
Community Express Borrowers May Access SBA’s Online Technical Assistance:
Borrowers seeking technical assistance under Community Express may access SBA’s Small Business Training Network at: http://web.sba.gov/sbtn/sbat/index.cfm?Tool=1.
Additional Information:
Community Express loans must meet the basic 7(a) loan criteria except where differences specified below:
Size
Eligible And Ineligible Types Of Business
Availability Of Funds From Other Sources
Maturity Terms For 7(A) Loans
Interest Rates Applicable to (A) Loans
Percentage of Guaranty on 7(A) Loans
SBA Fees for 7(A) Loans
Prepayment Penalties for SBA 7(A) Loans
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