SBA SOP 50 10 8, B.Ch4.A.2 — Other Restrictions that apply to Export Express Loans
Verbatim text of SBA SOP 50 10 8 section B.Ch4.A.2 (Other Restrictions that apply to Export Express Loans), effective 2025-06-01. 10 provision(s) quoted from the SOP PDF. SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.
Verbatim regulatory text
Verbatim provisions from SBA SOP 50 10 8, B.Ch4.A.2 — Other Restrictions that apply to Export Express Loans — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
SOP 50 10 8 B.Ch4.A.2
2. Other Restrictions that apply to Export Express Loans For purposes of clarification, small businesses in the following NAICS Industry Subsector Codes cannot be financed using an Export Express Loan, but may be financed using other SBA 7(a) financial assistance: NAICS Industry Subsector Code 721 (Accommodation) NAICS Industry Subsector Code 457 (Gasoline Stations). 3. Loan Terms and Conditions for Export Express a. Maximum Loan Amount i. The maximum loan amount is $500,000 (gross).
SOP 50 10 8 B.Ch4.A.2.a.ii
ii. Maximum Loans to Businesses with Affiliates 13 CFR § 120.151 Lenders must determine whether the Applicant has any affiliates and document the results in their credit analysis. If affiliation exists, SBA’s loan maximums apply to the Applicant, including all affiliates, as if all were a single business.
SOP 50 10 8 B.Ch4.A.2.b
b. Maximum Guaranty Amounts and Percentages The maximum dollar amount outstanding of SBA’s guaranty to any one business (including affiliates) must not exceed $3,750,000. SBA considers an EPC and an OC to be “one business” for this purpose. When calculating the maximum guaranty percentage available to a Borrower and its affiliates, the Lender must include the approved loan amount for a revolving line of credit. The SBA’s guaranty is also known as the “SBA share” or “guaranteed portion.”
SOP 50 10 8 B.Ch4.A.2.i
i. Multiple Export Express loans are allowed up to the program maximum loan amount ($500,000 gross for Export Express). The guaranteed amount of all Export Express loans counts toward the $3,750,000 maximum SBA exposure that may be outstanding for all SBA loans to a Borrower and its affiliates at any one time. ii. If multiple Export Express loans are approved within 90 days of each other, and the combined gross loan amount of all the Export Express loans approved in that time frame to any one Borrower (including affiliates) exceeds $350,000, then the maximum guaranty percentage on the second loan must be reduced accordingly so the combined guaranty is no more than 75% (subject to the $3,750,000 guaranty amount limit). iii. The maximum guaranty percentage is: a) 90% for loans of $350,000 or less; and b) 75% for loans over $350,000 up to $500,000.
SOP 50 10 8 B.Ch4.A.2.i.iv
iv. Combination of 7(a) and 504 loans a) When an Applicant applies for any combination of 7(a) and 504 loans, the order in which the loans are approved determines the maximum loan and guaranty amount available. Because the 7(a) loan has a lower maximum guaranteed amount, the 7(a) loan should be processed and approved first. b) Lenders must advise the SBA processing centers that there is a companion 504 application to ensure the 7(a) loan is processed and approved prior to the 504 loan application being processed and approved. v. Zero Percent Guaranty Cannot be Provided for Ineligible Purposes: A 7(a) loan cannot include proceeds for an ineligible purpose or have any portion of the loan made to an ineligible business and no part of an SBA 7(a) loan may be guaranteed at zero percent. c. Loan Maturities
SOP 50 10 8 B.Ch4.A.2.i
i. Export Express loans must have a stated maturity. The loan term must be the shortest appropriate term based on the use of proceeds and the Borrower's ability to repay. a) Lines of credit must not exceed 7 years.
SOP 50 10 8 B.Ch4.A.2.i.i
i) Transactional lines of credit: No disbursement can be made for an export transaction where payment by the foreign buyer will occur after the maturity date of the loan. ii) Revolving loans: (a) Maximum maturity includes any “term-out” period; (b) May be established as renewable each year provided they do not exceed the maximum maturity. (c) Lender may not charge a renewal fee. If the original maturity was for 12 months or less, and the new maturity exceeds 12 months, an additional guaranty fee will be due. b) Export Express Term Loans: (13 CFR § 120.212): A loan’s term must be: i) The shortest appropriate term, depending upon the Borrower's ability to repay; ii) Working capital or inventory loans and the financing of intangible assets (including goodwill) must not exceed 10 years. iii) Generally, equipment, fixtures, or furniture loans should not exceed 10 years. However, the term may be up to 15 years if the IRS asset class useful life supports the term. The term for a loan to finance equipment and/or leasehold improvements may include an additional reasonable period, not to exceed 12 months, when necessary to complete the installation of the equipment and/or complete the leasehold improvements. iv) Real estate loans (including acquisition, rehabilitation, renovation, construction, or improvements to leasehold interests in land) must not exceed 25 years, unless a portion of the loan is used for construction or renovation of the real estate. If the use of proceeds on a real estate loan includes construction or renovation, an additional period reasonably necessary for the construction or renovation period may be added to the 25-year maximum maturity. v) Loans for leasehold improvements (except for leasehold interests in land) may not exceed 10 years, plus an additional period reasonably necessary to complete the leasehold improvements, as determined based on the specific nature of the leasehold improvements, but in no case more than 12 months. vi) Mixed purpose loans and loans for all types of changes of ownership: When 7(a) loan proceeds are used for changes of ownership and/or for multiple purposes (land and building, working capital, machinery & equipment), or the refinancing of any of these purposes, the maturity may be a blended maturity or, if 51% or more of the use of the 7(a) loan’s proceeds are for real estate, the maximum maturity may be up to 25 years. For stock purchases, the loan maturity may be based on the underlying assets/interest financed by the 7(a) loan as supported by a business valuation/appraisal. vii) For loans to farm enterprises: (a) Where land and structures (including poultry houses) for farming comprise 51% or more of the use of proceeds, the maximum maturity is 20 years. (b) Where machinery and equipment comprise 51% or more of the proceeds, the maximum maturity is the useful life of the machinery and equipment, not to exceed 15 years, plus an additional period reasonably necessary for installation, which may not exceed 12 months. ii. Export Express Non-Financial Default Provisions: Non-financial default provisions are allowed under Export Express under the following conditions: a) Non-financial default provisions are loan conditions that, if violated, would cause the loan to be in default even though the Borrower has made all payments as agreed. b) Non-financial default provisions must be substantive and must be agreed to by the Borrower in writing at loan closing; c) The provisions must be consistent with those used by the Lender on its similarly-sized non-SBA guaranteed commercial loans; d) A lender may not request purchase of the guaranty solely based on a violation of a non-financial default provision (see 13 CFR § 120.520); and e) A maturity date must be established in the note. For example, a line of credit could state that it is payable upon demand under certain conditions, but in no case later than a certain date.
SOP 50 10 8 B.Ch4.A.2.d
d. Interest Rates SBA QUICK REFERENCE CHART: Maximum Interest Rates Allowed (See additional information below) Product Interest Rate Export Express Loans The maximum allowable fixed rate is available on SBA’s Wiki page. Maximum variable rates are: Loans $50,000 or less Cannot exceed Prime or SBA Optional Peg Rate + 6.5% Loans $50,001 up to and including $250,000 Cannot exceed Prime or SBA Optional Peg Rate + 6.0% Product Interest Rate Export Express Loans The maximum allowable fixed rate is available on SBA’s Wiki page. Maximum variable rates are: Loans $250,001 up to and including $350,000 Cannot exceed Prime or SBA Optional Peg Rate + 4.5% Loans $350,001 and greater Cannot exceed Prime or SBA Optional Peg Rate + 3.0% i. General Policy on Interest Rates (13 CFR §§ 120.213 & 120.214): a) A loan may have a fixed or variable interest rate. The maximum interest rate that may be established for any 7(a) loan is governed by SBA’s regulations on interest rates, which preempts any provisions of a state’s constitution or law. The Lender negotiates the interest rate with the Applicant, subject to SBA’s maximum allowable rates. b) SBA will periodically publish the maximum allowable fixed interest rate in the Federal Register. The maximum allowable fixed interest rate will be the Prime rate in effect on the first business day of the month, plus an allowable spread over Prime, as set forth in the most recent Federal Register Notice. For a listing of the current maximum allowable fixed interest rates, go to SBA’s FTA Wiki. The maximum allowable fixed rate may only be used by a Lender if such rate will be in effect for the entire term of the loan, without adjustment or reset. Otherwise, the maximum rates for variable rate loans will apply. c) For variable interest rate loans, the basis for the SBA maximum allowable interest rate is an acceptable base rate plus allowable spread. The base rate in effect on the first business day of the month will determine the basis for the initial interest rate for any complete loan application received by SBA during that month. (Note: The date the “complete loan application is received by SBA” is the date the loan is approved and assigned an SBA loan number.) The initial note rate must not exceed SBA’s maximum interest rate. The spread above the base rate as identified in the Note may not be changed during the life of the loan without the written agreement of the Borrower. d) For loans with a variable interest rate, the following terms must be defined in E-Tran and the Note: i) Base Rate and spread: (a) There are two acceptable base rates: The Prime Rate; or The SBA Optional Peg Rate. (b) The Prime Rate will be that rate which is in effect on the first business day of the month, as identified in a national financial newspaper or website. This rate may be found in the newspaper on the second business day of the month. If a website is used, please ensure whether it is publishing the current day’s rate or the previous day’s rate as some newspaper websites publish the previous day’s rate. The Optional Peg Rate is a weighted average of rates the Federal government pays for loans with maturities similar to the average 7(a) loan. SBA calculates and publishes the Optional Peg Rate quarterly in the Federal Register. Base Rates will be rounded to two decimal places with .004 being rounded down to .00 and .005 being rounded up to .01. (c) For variable rate Export Express loans, the Lender is not required to use the base rate identified above in this Paragraph and in 13 CFR § 120.214(c). The Lender may use the same base rate of interest it uses on its similarly-sized, non-SBA guaranteed commercial loans, as well as its established change intervals, payment accruals, etc. However, the interest rate throughout the term of the loan may not exceed the maximum allowable Export Express interest rate and the loan may be sold on the Secondary Market only if the base rate is one of the base rates allowed in 13 CFR § 120.214(c). ii) Frequency of change; iii) Range of fluctuation; and iv) Ceiling and floor (if any). e) Default Interest Rates: The default interest rate is a change (increase) in the interest rate charged to the Borrower as a result of a failure to meet certain conditions specified in the loan agreement. i) A Lender may charge a default interest rate if it does so for its similarly-sized, non-SBA guaranteed commercial loans, as long as the interest rate does not exceed the maximum interest rate permitted for Export Express loans. ii) The amount of interest SBA will pay to a Lender following default of an Export Express loan is capped at the maximum interest rates for the Standard 7(a) loan program.
SOP 50 10 8 B.Ch4.A.2.d.ii
ii. Policy on Variable Interest Rates a) Standard Policy: SBA’s maximum allowable interest rate applies only to the initial Note rate on a variable rate loan. Subsequent changes in the base rate are not subject to the maximum rate at the time of loan application; however, the maximum spread over the base cannot exceed SBA’s stated maximum. b) Post-Approval Changes to the Interest Rate: After approval, the Lender may change the initial Note rate, including changing the base rate, the spread over the base rate, or change from a fixed rate to a variable rate, or from a variable rate to a fixed rate, provided the new interest rate does not exceed the maximum allowable interest rate at the time of the loan application. The Lender must obtain the Borrower’s written consent to the change in the interest rate (if prior to disbursement, Borrower’s consent to the change in interest rate must be separate and apart from executing the loan documents) and must make the change through E-Tran Servicing. For example, an SBA-guaranteed loan was approved with a variable rate. Since the loan was approved, the prime rate changed. The Borrower has asked the Lender if the loan can be switched to a fixed rate. If the loan has not been disbursed and the fixed rate selected does not exceed the maximum allowable fixed rate at the time of loan application, the Lender may make this change per the Borrower’s request. For further guidance see SOP 50 57. c) Frequency of Interest Rate Adjustment:
SOP 50 10 8 B.Ch4.A.2.d.i
7 sections · 7,341 characters of verbatim text. Open a section to read it, or . Every section below is in the page source whether open or closed.
§i) Export Express Lenders are permitted to use the same change…549 ch
i) Export Express Lenders are permitted to use the same change intervals used on their similarly-sized, non-SBA guaranteed commercial loans. Export Express Lenders may delay the initial adjustment period. For example, Lenders have used periods as long as 5 years in order to provide the Borrower with an interest rate that is set for the first 5 years of the loan. After that time, the interest rate will begin to fluctuate as stated in E-Tran. ii) The Lender must specify in the Note the frequency at which the interest rate adjustment will occur.
aThis adjustment period as identified in the Note may not be…117 ch
(a) This adjustment period as identified in the Note may not be changed without the written consent of the Borrower.
bAll subsequent adjustments will set the interest rate on the…191 ch
(b) All subsequent adjustments will set the interest rate on the first calendar day of the adjustment period using the base rate in effect on the first business day of the adjustment period.
cThe rate of interest will change on the first calendar day of the…1,135 ch
(c) The rate of interest will change on the first calendar day of the adjustment period even though the rate may not be known until the second business day of that period. For example, if the first of the month is a Sunday, the base rate is the prime rate in effect on Monday. This rate will be reported in the Wall Street Journal on Tuesday, the third calendar day and second business day of the month. Many lenders use the calendar quarter as the adjustment period, especially those that sell the guaranteed portion in the Secondary Market. d) Interest Rate Requirements for an SBA Note: i) For fixed rate loans, the Lender must state the specific interest rate in the Note. ii) For variable rate loans, the Lender must include the following information in the Note: (a) Identification of the rate being used as the base rate; (b) The publication in which the designated base rate appears regularly (e.g., Wall Street Journal or the Federal Register if using the SBA Optional Peg Rate); (c) The percentage spread, including any changes to percentage spread if applicable, to be added to the base rate (e.g., in a construction loan);
dThe initial interest rate of the loan (from disbursement to first…83 ch
(d) The initial interest rate of the loan (from disbursement to first adjustment);
eThe date or timing of the first rate adjustment; and57 ch
(e) The date or timing of the first rate adjustment; and
fThe frequency of rate adjustment. e) Interest Rate Ceilings and…5,209 ch
(f) The frequency of rate adjustment. e) Interest Rate Ceilings and Floors: SBA will permit a Lender to limit the upward and downward adjustments by establishing a floor and ceiling provided that both the floor and ceiling are stated in the Note. f) Accrual Method: SBA does not require a specific accrual method, unless the loan is sold in the Secondary Market. Loans sold on the Secondary Market must either use 30/360 or Actual/365 as the interest accrual methods. iii. Amortization: (13 CFR § 120.214(e)): Lender should use an amortization schedule that is appropriate for the type of loan. SBA does not allow balloon payments. A fixed interest rate loan must use a payment that will fully amortize the loan by the maturity date. Typically, variable rate loans are re-amortized every time the interest rate is adjusted to ensure full amortization by the maturity date. The amortization schedule may also be adjusted to meet the cash flow needs of the business. iv. Fixed and Variable Rate Combinations: The Lender may use a fixed rate on either the guaranteed or unguaranteed portion and a variable rate on the other portion of the loan. SBA allows such combinations as long as neither rate exceeds the SBA maximum interest rate. A Lender may use this structure to make a loan that permits it to retain a variable interest rate on the unguaranteed portion and sell a fixed rate guaranteed portion on the Secondary Market. If the Lender uses a combination, the entire loan is considered to be a variable interest rate loan. The interest rate on both the guaranteed and unguaranteed portions must be based on the variable rate. v. Interest Rate Swap Contracts: a) An interest rate swap is a contract between two parties where one party pays a fee in exchange for an agreement by the other party to pay any interest in excess of an established amount. The contract may last for all or part of the term of the loan. The swap contract only relates to the payment of interest. Example: A Borrower has a prime plus 2% interest rate on a 7(a) variable rate guaranteed loan. The Borrower could purchase an interest rate swap contract that would set the interest rate at 8%. When the Note rate is lower than the rate paid by the Borrower on the swap contract (8%), the swap seller keeps the extra amount as compensation for the risk that rates will at some point exceed 8%. When the Note rate is higher than the rate paid by the Borrower on the swap contract, the Borrower would continue to pay the fixed rate of 8% and the swap seller would pay the difference above 8% to the Lender. The ability to stabilize the amount of the loan payment each month is the benefit to the Borrower of an interest rate swap contract. b) In order to use an interest rate swap in the 7(a) program, the interest rate swap contract must meet the following conditions: i) The interest rate swap contract is an agreement between the small business Borrower and the Lender or, if the swap seller is not the lender, a third party. SBA is not a party to the interest rate swap contract. ii) The interest rate swap contract does not affect the amount of money owed by the Borrower to SBA in the event SBA purchases the guaranty. In the event of a Borrower default, interest will be calculated using the base rate and spread in the variable interest rate Note, not the swap contract. iii) SBA will not be responsible if the swap seller defaults during the life of the contract. The Borrower will be liable for the interest as required in the Note. iv) Loans with accompanying interest rate swap contracts may be sold on the Secondary Market. The Lender is still required under the Secondary Market contract (SBA Form 1086) to forward interest and principal pursuant to the original terms of the loan. It is the Lender’s responsibility to work with the swap seller to make sure funds are available for submission to the fiscal and transfer agent according to the time schedule in the Form 1086. v) The full amount of the principal and interest required under the Note must be reported by the lender on the SBA Form 1502. vi) SBA will not review swap contracts for Borrowers or provide guidance on their use. While swap contracts should not have a significant impact on the cost of the loan, SBA will not publish any guidelines on the cost of these contracts. vii) The Borrower must sign a statement acknowledging that interest will be calculated at the Note rate if the swap contract is terminated. viii) The following statement must be included in the swap contract that is executed by the Borrower and the swap seller: “The Small Business Administration is not a party to this contract and does not guarantee it. In the event SBA is called upon to honor its guaranty to the Lender, the Borrower’s debt will be determined by the terms of the Note, including the variable interest rate provision.” ix) Swap contracts may be used on new or existing loans. x) The swap contract does not have to last for the entire length of the loan agreement. xi) SBA does not have a standard form for an interest rate swap contract. xii) Any fees owed the swap counterparty as a result of the default by the Borrower will be subordinated to the SBA 7(a) loan.
Operationalizing SBA SOP 50 10 8, B.Ch4.A.2 — Other Restrictions that apply to Export Express Loans
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