The Patriot Express Loan made it easy for veterans of the military to start their own business. Since the number one obstacle in starting a business is capital, the SBA stepped in to help veterans that served our country. While there wasn’t a guarantee of approval, the requirements were relaxed enough (and speedy) to help veterans start their own business.
Eligible veterans were those that would own at least 51% of the business and have honorable discharge from the service or be on active duty. Widows and current spouses of any active military member, retired military member, or member of the Reserves were also eligible. The loan offered financing up to $500,000 with low interest rates.
Unfortunately, today this loan is no longer available, but the SBA does offer alternatives.
SBA Veterans Advantage Loans
This program offers loans up to $350,000 for small businesses with at least 51% veteran ownership. In order to qualify, you must:
- Be retired from the service with an honorable discharge
- Be on active duty and a part of the Transition Assistance Program
- Be a disabled veteran as a result of your service
- Be an active part of the Reserves or National Guard
- Be a spouse of a currently active military member, National Guard member, or the widow of a military member that died while on duty or as a result of his duty
If you borrow less than $125,000, you won’t pay an upfront fee and the SBA will guarantee 85% of the loan. You can choose terms up to 10 years for equipment loans and up to 25 years for real estate loans.
If you borrow between $125,001 and $350,000, you’ll pay upfront fees, but they are reduced by 50% as long as you meet the above service requirements. The SBA will offer a guarantee of 75% for these loans as well.
SBA Express Loans
The SBA Express Loan streamlines the approval process. While it’s not a loan specific to veterans, there are benefits that are veteran exclusive, such as no upfront funding fee for loans up to $350,000.
Veterans can use the SBA Express loans for a majority of business needs including:
- Business startup
- Working capital
- Purchase of real estate
- Purchase of equipment
- Purchase of inventory
You can receive the funds as a line of credit or a term loan. It involves little paperwork, and as the name suggests, closes faster than the other SBA loans.
The most important thing you can do as a veteran is shop around. The SBA doesn’t provide the loans. Instead, they guarantee them. This means you must apply with a lender. Just like home financing, each lender has different requirements and fees. Find the lender with the most appealing terms and fees on their loan. This will enable you to save the most money and get the most lucrative terms on your small business loan as a veteran.