Patriot Express Loan: A Promising New Business Loan Program for Veterans and their Spouses

The U.S. Small Business Administration (SBA) has launched a new loan program for military service members, veterans and their spouses which can be used to establish or expand a small business. The Patriot Express Loan Initiative builds on the more than $1 billion in loans SBA guarantees annually for veteran-owned businesses. In March 2008, the SBA announced that the average loan amount is nearly $101,000. "Each day sees the number of Patriot Express loans rise and the number of participating lenders, currently more than 773 nationwide, rise as well," said SBA Administrator Steve Preston. "We thank these lenders, and those coming aboard, for their special efforts on behalf of entrepreneurial veterans and others in our military community."nnWhat is a Patriot Express LoannnThe Patriot Express Loan is a streamlined loan product based on the SBA’s Express Loan Program. The difference in the Patriot Loan is that it comes with enhanced guaranty and lower interest rates. The new Patriot Express loan is offered by the SBA’s network of participating lenders nationwide and offers a fast turnaround time for loan approvals. Patriot Express loans have been approved for all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and Guam.nnLoan amountsnnLoans are available up to $500,000 compared to the maximum loan amount of $350,000 available under SBA Express. The Patriot Express loan qualifies for SBA’s maximum guaranty of up to 85% for loans of $150,000 or less and up to 75% for loans over $150,000 up to $500,000 which contrasts with the maximum 50% SBA guaranty that applies to SBA Express loans. For loans above $350,000, lenders are required to secure all available collateral to back the loan and may obtain collateral for smaller loans depending upon individual bank requirements.nnInterest ratesnnPatriot Express loans feature SBA’s lowest interest rates for business loans, generally 2.25 percent to 4.75 percent over prime depending upon the size and maturity of the loan. Lenders and borrowers can negotiate interest rates which may be fixed or variable; however, there are limits on how much a lender can charge. For example: the interest rates are a maximum of prime + 2.25% for maturities under seven years; prime + 2.75% for seven years or more. The interest rates can be two percent higher for loans of $25,000 or less; and one percent higher for loans between $25,000 and $50,000. nnWith the SBA’s Express program The interest rates can be up to 6.5 percent over prime rate for loans in the amount of $50,000 or less and up to 4.5 percent over prime rate for loans over $50,000. The Patriot Express loan program offers lower interest rates.nnWho can get a Patriot Express loannnThe loan is available to the following:nn1. Veterans (other than dishonorably discharged)n2. Service-disabled veteransn3. Active-duty military eligible for the military’s Transition Assistance Program for potential retirees within 24 months of separation and discharging active duty members within 12 months of dischargen4. Reservists and National Guard membersn5. Current spouses of any of the aboven6. Widowed spouse of a service member or veteran who died during service or of a service-connected disability. nnWhat loan proceeds may be used fornnThe Patriot Express Loan Initiative can be used for most business purposes, including the following:nn*Start-up businessn*Business expansionn*Equipment purchasesn*Working capitaln*Inventory or business-occupied real-estate purchasesnnwww.sba.gov/patriotexpressnnFor more business loan sources visit: Business Loan Sources