As of June 28, 2007, the Patriot Express Loan was available through the SBA’s 7(a) Loan Program, which is the most well-known and widespread program it offers. Although there was no absolute assurance of approval, the Patriot Express Loan was intended to expedite military veterans’ access to capital for their businesses. They provided a loan approval turnaround time that was among the quickest in the SBA. The already successful SBA Express Loan Program served as the foundation for the Patriot Express Loan Program, which improved its guarantee and interest rates.
A veteran had to own the majority of their company in order to be eligible. Additionally, they had to be in the National Guard, on active duty (and enrolled in the Transition Assistance Program), service-disabled, or a reserve member. The aforementioned individuals’ spouses, as well as widowed spouses of those who died while serving, were also qualified. Dishonorable discharge was a deal-breaker.
The Patriot Express Loan provided term loans and lines of credit for financing up to $500,000 to military business owners. That sum of money could be used to cover startup costs, business inventory, or commercial real estate purchases. Debt refinancing was also an option.
Just how good of a deal was it?
The loan application and approval procedures were streamlined by the SBA Patriot Express Loan Program. Veterans could receive financing approval in as little as 36 hours. Veterans who qualify may apply for loans up to $500,000 with minimal or no fees and a low interest rate. For loans between $150,001 and $350,000, the guarantee fee initially stood at 3%, but it was later lowered to 0%.
Where did the Patriot Express Loan program go?
After more than six years of providing opportunity for active duty service members, military spouses, and veterans, the Patriot Express Loan Program came to an end on December 31, 2013.
The Government Accountability Office (GAO) advised the SBA to evaluate the program and improve eligibility controls in 2013. “The GAO found that loans approved under the Patriot Express Loan Program defaulted at a much higher rate than regular SBA 7(a) loans or even SBA Express Loans, with the exception of the loans approved in 2007 (the program’s pilot year). For loans under $25,000, Patriot Express Loans’ overall default rate was particularly high. The SBA’s inability to confirm all borrowers’ ongoing eligibility after the loan was approved was another issue.
Are There Alternatives to the Patriot Express Loan Program?
For veteran entrepreneurs looking for funding for their goals, there are still a number of resources available.
SBA Express Loan Program
If approved, the SBA Express Loan Program provides veterans with access to up to $350,000 in as little as 36 hours (much like the previous Patriot Express Loan). Additionally, there is no up-front fee for any approved loans up to $350,000. More veterans are likely to apply for capital to start a business when loans are less expensive for the borrower. Since 2009, the SBA has almost doubled the amount of money it lends to veteran-owned businesses.
A veteran-owned and run online auction marketplace which connects veteran entrepreneurs looking for financing with investors wanting to fund small businesses. StreetShares has a fast and easy approval process, and strongly emphasizes support for veteran-owned businesses.
Service-Disabled Veteran-Owned Small Business Program (SDVOSBC)
The SDVOSBC exclusively helps veterans secure a certain number of government contracts, especially if you were injured in service.
UPS Veteran Franchise Opportunities
According to the UPS website, “Veterans are uniquely suited for solving the nation’s most pressing challenges and this makes them incredible entrepreneurs.” So UPS offers veterans looking to open a UPS franchise a $10,000 franchise fee discount as well as a 50-75% initial application fee discount.
If you graduated from a U.S. military academy, Hivers and Strivers provides funding for startups run by academy graduates. This angel investment group focuses on supporting West Point, Annapolis, Air Force, and Coast Guard graduates.
Military Economic Injury Loans (MREIDL)
If you’re 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 you’re looking for, and you’ll need to prove that your business can’t recover without government help, but it’s definitely an option to consider!
To learn more about the SBA 7(a) LOan and other business loan options for veterans, simply click the button below to connect with US Today!
Is it hard to get an SBA Express loan?
If your company isn’t well-established and has a poor credit history, it might be challenging to get an SBA Express loan. Although loan requirements vary by lender, you typically need to have a strong financial position, a credit score of at least 650, and at least two years of business.
Do SBA Express loans require collateral?
For loans up to $25,000, SBA Express Lenders are not required to accept collateral. For loans over $25,000 and up to $350,000, they may rely on their current collateral policy.
How long does it take to get an SBA Express loan?
Within 36 hours, the SBA responds to applications for express loans, and within 24 hours for applications for export express loans. These turnaround times are significantly faster than those for other SBA loans, which are approved in five to ten business days.
What is the Patriot Express loan?
The Patriot Express Loan Program offers small business loans in amounts up to $500,000 to assist veterans and active-duty military personnel in gaining quicker access to capital for their businesses.