Patriot Loan



JUMP ON THE PATRIOT EXPRESS TO YOUR FUTURE AS A VETPRENEUR

More than 14 percent of businesses in America are owned by veterans. These businesses make significant contributions to the economy, and because of the leadership and decision making skills Veteran’s acquire through military service, they are well-suited to become successful entrepreneurs! Understanding the resources you can access as well as the opportunities that exist can assist you in making that decision. Owning something of your own is exciting, but it takes certain skills, planning and resources to be successful.

“In our experience, veterans make great entrepreneurs,” said Carl Schramm, president and CEO of the Kauffman Foundation, the largest foundation focused on entrepreneurship in the US.

The Patriot Express loan is offered by SBA’s participating lenders nationwide and features low interest rates and ease of approval. Loans are available up to $500,000 and qualify for SBA’s maximum guaranty of up to 85 percent for loans of $150,000 or less and up to 75 percent for loans over $150,000 up to $500,000. For loans above $350,000, lenders are required to take collateral. Loans can be used for most business purposes, including start-up, expansion, equipment, cash flow, payroll, overhead, working capital, or inventory.

Small-business loans of up to $2 million also are available via the SBA’s Military Reservist Economic Injury Disaster Loan (MREIDL) program. Eligibility is limited to businesses sustaining economic injury because an owner or essential employee was called to active duty as a reservist. Loans are intended to cover operating costs until the reservist is released from duty.

For business loans rates are generally 2.25 percent to 4.75 percent over prime depending upon the size and maturity of the loan. The terms are typically monthly payments for 10 years with no prepayment penalty. The loans have been approved in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and Guam and generally range from $5,000 to $375,000 in individual loan amounts. The average loan amount is almost $103,000. After loan applications are approved by the bank, they are submitted to SBA for approval. Most applications are approved by SBA within 24 hours. While the loans are made by private banks, the SBA plays an active role in monitoring and supervising the programs subjecting them to periodic review and audit. For lenders in your area contact your local SBA district office.

Eligible military community members for a PX loan include:

Of the total loans distributed 54% have gone to Veterans, 28% to active military in the discharge process and 15% to military spouses.

According to William Elmore, SBA associate administrator for veterans' business development. The PX loan has emerged with perfect timing coinciding with the returning Veterans and strong hold of small business in the US. "I believe we reached more veterans in the 2008 fiscal year than ever before in the history of the agency," Elmore says.

You can apply for a new loan every six months. And, there is no need to pay off your existing loan. Although not a guarantee, many are successful with these repeat loans. You can not apply to the same loan program simultaneously with different lenders. However, you may apply under different programs. So, if you are applying to a program, you could not make a similar application at the same time with another lender. You must wait at least 90 days to submit an application under the same program if your application has been denied.

While these loans are very user friendly there is still the dreadful question of Credit requirements! We all know the significance of credit in today's world. Satisfactory credit is all that is required. If you don’t have much credit the benefit to this loan is that it will help to build up your credit. The lenders will be reporting to the credit bureaus and thus building your credit. This will help you to acquire future necessary loans or lines of credit to grow you business.

Some credit issues that will make you ineligible for the loans are:

As mentioned, this PX program has been specifically devised by to be low on paperwork. Business plans, financials, or tax returns are NOT required. However, if you have prepared a business plan with financials, include it--this can only help.

New Business, Start Ups and Franchises are the most common request for the loans. “ Entrepreneurship — I’m not sure I had ever heard the term when I was on active duty, yet it changed my life and the lives of countless other veterans,” Chris Michel said. He is Founder and Chairman of Military Advantage.

But, some lenders will not allow the loan to be used to purchase a new business. Some lenders require proof of at least 10% capital infusion into your new business (your own money put up to start the business, as opposed to loans) it just depends on your lender. If your franchise request is listed on the Federal franchise registry ( www.franchiseregistry.com ), there is no further review required. If not registered, it could still be approved by the credit manager by simply reviewing the franchise agreement.

Some examples of ineligible businesses are: non-profits, gambling ventures, businesses of a religious nature, businesses of a sexual nature, management of your own investments (for example, owning and managing your own apartment building), and speculative real estate (for example, buying property on foreclosure, fixing it up, and selling).

Considering small business accounts for two-thirds of new jobs, the drive and persistence of Vetpreneurs are making a huge contribution to the strength of America’s economy. Opportunity is out there for you- now make it your opportunity!

For more information or to find a local SBA office, go to www.sba.gov and review SCORE.org for helpful information on starting your own business!