While the semi-blind source separation-based acoustic echo cancellation (SBSS-AEC) has received much research attention due to its promising performance during double-talk compared to the traditional adaptive algorithms, it suffers from system latency and nonlinear distortions. To circumvent these drawbacks, the recently developed ideas on convolutive transfer function (CTF) approximation and nonlinear expansion have been used in the iterative projection (IP)-based semi-blind source separation (SBSS) algorithm. However, because of the introduction of CTF approximation and nonlinear expansion, this algorithm becomes computationally very expensive, which makes it difficult to implement in embedded systems. Thus, we attempt in this paper to improve this IP-based algorithm, thereby developing an element-wise iterative source steering (EISS) algorithm. In comparison with the IP-based SBSS algorithm, the proposed algorithm is computationally much more efficient, especially when the nonlinear expansion order is high and the length of the CTF filter is long. Meanwhile, its AEC performance is as good as that of IP-based SBSS.