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Sba Patriot Express Loan Program

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Starting A Business Faqs

SBA Express Loans Explained: What You Need to Know (2021)

1. My partner says he will fund my start-up costs. Is this OK?

If your partner is a Veteran, this does not present a concern. If the partner is not a Veteran, we suggest that you seek legal advice. VAs regulation provides examples of negative control, where non-Veterans may or may not have authority over the Veteran owner. The details are explained in 38 CFR Part 74.4. During the examination review process, the Center for Verification and Evaluation will carefully evaluate the relationship of all owners.

2. I need assistance with starting or expanding a business.

  • If you are already open for business and want to sell to the Federal government, contact your closest Procurement Technical Assistance Center for assistance with all of the required documentation and registration to bid on Government contracts. Please refer to the PTAC Website for the listing of an office near you.
  • If you need assistance in starting a business, please visit the Small Business Development Center Website and contact your closest Procurement Technical Assistance Center for assistance.
  • If you are Service-Disabled Veteran who wants to start a business, please view the Veterans Business Outreach Program website and the SBDC website for assistance.

3. Does VA provide loan or grant money to Veterans to start their own business?


Veteran Readiness & Employment

The VAs VR& E program helps veterans with service-connected disabilities find help getting back into the workforce or starting a business. The program can also fund VA small business loans for veteran entrepreneurs.

Veterans will need to have a disability rating with the VA or are going through the process to get approved. They can also have a VA memorandum rating of 20% or more or be entered into the Integrated Disability Evaluation System . The veterans business will also need to meet qualifications for funding.

Sba Veterans Advantage Loans

According to the SBA, veteran-owned businesses are one of the fastest-growing and significant segments of the U.S. economy.

Accordingly, the agency offers a reduced-fee loan program specifically for veterans.

To be eligible, members of the military community must own at least 51% of a small business.


Heres who qualifies:

  • Active-duty troops eligible for the militarys Transition Assistance Program
  • Service-disabled veterans
  • Current spouse of any veteran, active duty service member, reservist or National Guard member
  • The widowed spouse of a service member who died while in service
  • The widowed spouse of a service member who died as a result of a service-connected disability.

The borrower and the small business must also meet eligibility and financial requirements.

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Military Reservist Economic Injury Disaster Loan Program

The loan limit is $2 million, and youll need to provide collateral on loans over $50,000. The interest rate on the program is just 4%, and business owners can repay the debt over up to 30 years.

Unlike other business loans, MREIDL loans are not meant for anything beyond working capital needs. So its not an option if youre looking to start a business, expand your current operations, refinance long-term debt or cover lost income or profits.


Also, if your business has the financial capacity to fund its own recovery, it likely wont qualify for a loan through the program. If you want to apply, call the Disaster Assistance Customer Service Center at 800-659-2955 or send an email to to get an application sent to you.

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A History Of The Patriot Express Loan Program

How to Get a SBA Patriot Express Loan

In 2007, the SBA introduced the Patriot Express Loan as a pilot product in its 7 loan guarantee program. Unlike other SBA loans, which are available to all business owners who qualify, the Patriot Express loan was designed specifically for veterans and other eligibility military members to get access to the financing they needed to start or expand their business.

While the SBA didnt originate or service the loans itself, it provided insurance to SBA-approved lenders, reducing their risk and encouraging them to work with small business owners who qualified.

For veterans and other eligible military members who qualified, the Patriot Express Loan provided up to $500,000 in funding and could be used for most business-related purposes. The program had one of the fastest turnaround times for approval among all SBA loans, and some of the lowest interest rates at just 2.25% to 4.75% above the prime rate, depending on the loan amount and repayment term.


All these features made the Patriot Express Loan an appealing financing option, and the SBA guaranteed more than $703 million through the end of 2012.

The problem was that the default rate on Patriot Express Loans was higher than other SBA loans, according to the U.S. Government Accountability Office. Among business owners who borrowed less than $25,000, for instance, one in five couldnt repay the debt. Ultimately, the costs of providing the program exceeded the income, and the SBA discontinued the product at the end of 2013.

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Is It Hard To Get Approved For An Sba Loan

In general, the application process for SBA loans is more rigorous than for other types of business loans. Applicants must meet extensive eligibility requirements and provide robust application materials and supporting documents.

Once a business owner submits a complete application, it can take up to 36 hours for the SBA to make a lending decision for Express loans, and five to 10 business days for other SBA 7 loans. Ultimately, however, the length of the application, approval and funding processes can further vary based on the individual lender.


Who Needs A Veterans Advantage Business Loan

A 2021 report by the Congressional Research Service analyzed issues facing veteran entrepreneurs. According to the report, accessing capital was one of the top challenges they face. In addition, veteran small business owners reported approximately 10% lower loan approval rates than non-veteran small business owners and more financing shortfalls. The report cited lower credit scores, insufficient credit histories and lower requested loan amounts as contributing factors.

According to the report, the SBA encourage lenders to provide loans to specific groups of borrowers identified by the SBA as having difficulty accessing capital, including veterans.

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Business Grants And Loans For Military Veterans

Help exists for military veterans who wish to start a business after serving their country. Both the VA and SBA provide several financing options, including loans and grants, that veterans can benefit from. Organizations designed specifically for assisting veterans can also be good sources of funding opportunities.

Use the Veteran Entrepreneur Portal for supportive resources, training programs, and funding options. You can also visit your local Veterans Service Organization to connect with more opportunities.


Sba Business Counseling For Veteran Business Owners

Patriot Express Loan Webinar

The agencys website has a locator tool to help you search for a Small Business Development Center near you. This local resource can be an important resource, especially for those needing individual counseling or problem-solving assistance.

The SBA will also help to match you with a business mentor through SCORE, a national network of volunteer business experts. You can also access training, workshops and online resources.

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What Is The Sba Patriot Express Loan Program

The SBA Patriot Express Loan is a program that is offered by the Small Business Administration. This program is designed to help veterans and members of the active military. Here are the basics of the SBA Patriot Express Loan program and how it works.

SBA Patriot Express Loan

If you are a veteran or are currently in the military and you want to start a business, this loan program can be a good way to do so. You are going to be able to work with a traditional lender and your loan is going to be backed up by the SBA. With this loan program, you can get as much as $500,000 to start a business or to expand your existing business. You could use the money to purchase equipment, buy land, expand your building or do a number of other things with.


Benefits

One of the biggest benefits of this program is that you are going to be able to get approved easier than you would with a traditional loan program. Since the SBA is backing the loan, you are not going to have to meet the same credit requirements. Another advantage is that the interest rates on these loans are very affordable.

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Do Sba Express Loans Require Down Payment

The SBA requires borrowers to make a down payment on certain, more popular loan types. Loans in the SBA 7 programincluding Express loanscome with down payments between 10% and 30% of the total loan amount. Ultimately, the down payment amount depends on the borrowers cash flow, collateral and other financial factors.

Personal And Business Background

How To Get a SBA Express Loan

When you apply for an SBA loan, youâll need to provide a document explaining your personal background. Youâll probably need to provide previous addresses, names youâve used, educational background, criminal history, etc.


You should also prepare a resume that explains your business background. The SBA and the lender you work with will want to see your past experience as a business owner, and any experience youâve had working in your industry.

If youâre a veteran applying to an SBA Express loan in lieu of the Patriot Express loan, you should also describe your military experience and current involvement in your resume.

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Small Business Innovation Research

SBIR is a program that recognizes businesses involved in research and creating innovative ways to operate or help society. The SBIR funding program isnt specifically for veterans, but veteran business owners are welcome to apply. The program pays grants rather than loans to assist their business endeavors.

Qualifying companies must have less than 500 employees and be mostly owned by United States citizens. Applicants must send in a proposal after registering for SBIR as part of their applications. SBIR first grants Phase I grants. Some businesses may also qualify for Phase II grants to receive more funding.


You Need Decent Personal Credit

In addition to considering the strength of your business, lenders that offer SBA loans typically also look at your personal credit history. Of course, different loans have different credit requirements.

For example, an SBA 7 small loan typically requires a minimum credit score of 650, while a standard SBA loan of up to $5 million usually requires 675 or higher. SBA microloans may be available to business owners with even lower credit scores.

Keep in mind that SBA loans are made through SBA-approved lenders and not the government agency itself. As a result, each lender may have its own credit requirements youll need to meet to qualify. So its wise to shop around and compare loans from several lenders.

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What Is The Patriot Express Loan

As of June 28, 2007, the SBA 7 Loan Program offered the Patriot Express Loan. Like most loans, there was no absolute guarantee of approval, but the goal of the Patriot Express Loan was to speed up military veterans access to business capital. They offered one of the SBAs fastest turnaround times for loan approvals. The Patriot Express Loan Program was based on, and enhanced the guarantee and interest rates of, the already successful SBA Express Loan Program.

In order to qualify, a veteran needed to own the majority of his or her business. They also needed to be on active duty , in the National Guard, service disabled, or a reservist. Spouses of the above, as well as widowed spouses of those who passed away in service were also eligible. Dishonorable discharge was a deal-breaker.

The Patriot Express Loan allowed military business owners both term loans and lines of credit for financing up to $500,000. That money could be used for startup costs, or to purchase business inventory or commercial real estate. Debt refinancing was also an option.

The main benefits of the Patriot Express Loan were:

  • Being approved for larger amounts of financing, and at lower interest rates

  • More efficient loan processing

  • Faster financing

Additional Sba Resources For Veteran

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In addition to the two loan programs, the SBA also provides a variety of resources to give veterans the tools they need to succeed in business. SBA training programs for veterans include:

  • Boots to Business
  • Women Veteran Entrepreneurship Training Program
  • Service-Disabled Veteran Entrepreneurship Training Program
  • Veteran Federal Procurement Entrepreneurship Training Program

The SBA also offers government contracting opportunities for military-owned businesses. You can visit the SBAs website for the specifics on these SBA veteran resources and others.

Note that the SBA does not offer any grants to veterans. However, you can find other business grant options in our guide to the best business grants for veterans.

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Sbas Economic Injury Disaster Loans And Advance Program Reopened To All Eligible Small Businesses And Non

Monday, June 15, 2020Release Number: 20-47Contact:[email protected], 205-7036 WASHINGTON To further meet the needs of U.S. small businesses and non-profits, the U.S. Small Business Administration reopened the Economic Injury Disaster Loan and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to COVID-19 today. SBAs EIDL program offers long-term, low … read more

Sba Patriot Express Loan

The SBAs primary goal is to assist owners of small businesses, and veterans may also be able to benefit from a veteran small business loan through the organization. The SBA Patriot Express Loan program began in 2007 to directly assist veteran business owners, but it ended in 2013. The program provided more than $633 million to veteran businesses through simplified loans with low interest rates in its first four years.

While this program is no longer available, veteran business owners should consider using the SBA Express Loan program, also known as SBA 7 loans, which we detail below.

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What Is A Patriot Express Loan

The Patriot Express Veterans Small Business Loan program was meant to provide veterans with the financing to start or expand their own businesses. Though this program no longer exists, there are other programs like it available currently. Well go over the benefits of programs like Patriot Express Loans.

Sba Veteran Loans Program Terms Rates & Fees

â Veterans Advantage Program Sba

These are the current rates and fees for the SBA Veterans Advantage Loan Program:

Borrowing Amount
  • Must meet SBA size standards
  • Must be in an approved industry
  • Must demonstrate being capable of loan repayment
  • Must be at least 51% veteran-owned

Veteran SBA Loan Rates: What To Know

Veteran SBA loan rates vary depending on the lender issuing the loan and the specifics of the loan in question. The SBA sets the maximum rates SBA-partnered banks can charge for SBA loans, including SBA Veterans Advantage loans. These rates are normally based on the prime rate.

How Can Veterans Benefit From The SBAs Fee Relief On Small Loans?

Small SBA Veterans Advantage loans less than $150,000 have a 0% upfront guaranty and no annual service fee. On an SBA Express Loan for veterans up to $350,000, the guaranty fee is still zero, but the annual service fee will apply to loans above $150,000.

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Current Funding Options For Veterans

Despite the demise of the Patriot Express and Veterans Advantage programs, you can still find loans geared toward veterans. Plus, you can always apply for the best business loans, even if they arent vet-specific. Your veteran status also gives you access to special grants, angel investors, and discounted franchising opportunities just for vets, like these.

How Do Va Business Loans Work

Lets clarify this right now: VA business loans dont exist. There is no such thing as a VA business loan. You cannot get an VA business loan of any size.

Thats because the VA simply does not extend or back business loans. Sorry to put a damper on things.

That being said, people often use the phrase VA small-business loans to talk about any loans that offer veterans special incentives, such as looser loan requirements. For example, the U.S. Small Business Administration has backed loans with discounted fees for vets in the past. Likewise, some private lenders emphasize extending small-business loans to veterans.

You also wont find any VA business grants. Grants specifically for veterans do exist, but not through the VA. Again, sorry.

But dont leave just yet. You might not be able to get a VA business loan, but that doesn’t mean you cant get working capital. And now that you know the truth about VA business loans, well spend the rest of this article talking about all the forms of funding available to you as a veteran business owner, including loans, grants, and angel investors.

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Military Economic Injury Loans

If youre a veteran within one year of being released from active service, and your business was affected when you were called into active duty, you may want to check your eligibility for a low-interest Military Reservist Economic Injury Disaster Loan. Some collateral may be required depending on the funding youre looking for, and youll need to prove that your business cant recover without government help, but its definitely an option to consider!

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