A New Loan Program Recognizes Military Involvement and Rewards Would-be New Business Owners with Special Opportunities.

By Cassie Kreitner

Studies conducted by the Small Business Administration show that one out of every five individuals leaving active military duty considers starting their own business, says Frank Sciortino, director of the Buffalo District SBA office. To help hopeful entrepreneurs start and grow their small businesses, the SBA considered the entrepreneurial aspirations of individuals involved with the military and in June implemented a new loan initiative called the Patriot Express Pilot Loan program.

The intention of the program is to recognize the achievements of America’s veterans, service-disabled veterans, active-duty members, reservists, National Guard members, spouses, and widows/widowers of those who served by rewarding them with special opportunities to further pursue dreams of starting their own company.

The new Patriot Express loan is offered by SBA’s network of participating lenders nationwide and features the fastest turnaround time for loan approvals. The program hopes to assist these entrepreneurs in obtaining higher loans with more guarantees and lower interest rates.

Loans from the Patriot Express program can be $150,000 more than loans from the SBA Express Program. Additionally, the loan guarantee was only 50 percent under the original program and has since improved. Loans in the new program 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 all available collateral.

SBA’s lowest interest rates for business loans are featured in the Patriot Express program, generally 2.25 percent to 4.75 percent over prime depending upon the size and maturity of the loan. For traditional SBA loans, the average turnaround was six days, but has now improved to same-day processing under the Patriot Express program, making the opportunity for loans more readily available.

The terms of the loans remain similar to those in the Express Loan program, which give seven years for working capital, 10 years for machinery and equipment, and up to 25 years for fixed assets and real estate.

The program “goes directly to the needs of these American Patriots who wish to start businesses, and in the process, encourages job creation and growth,” said Stephen Preston, SBA administrator.

These loans can be used for most business purposes, including start-up, expansion, equipment, inventory, and real estate-related purchases. “We’re always proud of what we’ve done in veteran’s loans, but we can do more,” Sciortino said. The program also hopes to reach potential entrepreneurs through its information on financial, procurement, and technical assistance programs.

“More than 14 percent of businesses in America are owned by veterans, and SBA is proud that we guarantee more than $1 billion annually in loans for veteran-owned businesses,” said Preston. “Veteran-owned businesses make significant contributions to the economy and because of the unique technical and leadership skills they acquire through military service, they can become successful entrepreneurs.”

More information on the Patriot Express Pilot Loan Program can be found at www.sba.gov/patriotexpress.