Patriot Business Loans: Everything You Need To Know
For the purpose of helping veterans establish and grow their businesses, the Patriot business Loan program was established in 2007. Even though the program was discontinued in 2013, veteran business owners continue to pay attention to it.
Patriot business Loans are no longer available, but the U.S. Small Business Administration (SBA) still offers veterans who qualify for its 7(a) Express Lending and other programs great small business loan choices. The following information will help you understand the program that is no longer in operation and what is still available to assist you in obtaining the financing you require.
What Exactly Is the Patriot Business Loan Program?
Patriot Business Loans, which offer small company loans in sums up to $500,000, was created to assist veterans and active-duty military personnel in gaining quicker access to cash for their firms. Sadly, the Patriot Express lending service was discontinued in 2013.
But in only the first four years of its existence, the SBA Patriot Express loan program provided over $663 million in SBA-guaranteed loans to 7,650 veterans who required capital to launch or grow their small enterprises. In all, it’s reasonable to conclude that this curriculum was a highly well-liked selection for seasoned entrepreneurs.
In light of this, you might ask how the Patriot business loan program operated and why it was terminated.
The Patriot Express Loan program’s history
In its 7(a) loan guarantee program, the SBA debuted the Patriot Business Loan as a trial product in 2007. The Patriot Express loan was created especially for veterans and other eligible military members to gain access to the funding they needed to start or expand their businesses, unlike other SBA loans, which are available to any business owners who qualify.
While the SBA did not originate or manage the loans, it did give SBA-approved lenders insurance to lower their risk and compel them to deal with qualifying small company owners.
The Patriot Business Loan provided up to $500,000 in capital and may be used for most business-related activities for veterans and other qualified active-duty military personnel. Depending on the loan amount and repayment duration, the program offered one of the quickest turnaround times for approval of all SBA loans and some of the lowest interest rates at just 2.25% to 4.75% above the prime rate.
With all these benefits, the Patriot Express Loan became a desirable financing choice, and the SBA insured more than $703 million through the end of 2012.
According to the U.S. Government Accountability Office, the issue was that Patriot Business Loans had a higher default rate than other SBA loans. For instance, among business owners who borrowed less than $25,000, one in five needed help to repay the debt. At the end of 2013, the SBA stopped selling the product because the costs of running the program outweighed the revenue.
How to submit a business loan application
Ask yourself if you need a loan before you start your business loan application. This might be a resounding yes if you’re a startup. However, you might pause between the two answers if you’ve been in business for a while.
Determine the precise reason you require funding in the first place to aid in your decision. Additionally, consider other possible sources of funding for your needs.
If you decide that applying for a small business loan is the best course of action, follow these seven steps to find out how to do it.
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- You need to identify an approved lender to deal with for the SBA Patriot Business Loan program, like a bank or credit union.
- Through its Lender Match program, the SBA links local lenders with businesses. While some forms can be finished online, most lenders demand that applicants call or visit their offices in person.
- After getting in touch with a lender, you’ll need to put together an application. You must be prepared to demonstrate your ability to repay the loan and successfully run your firm. Additional paperwork, such as: will be required as part of the application process.
- Individual and business income tax returns
- Financial forecasts, business licenses, business certifications, and financial statements
- D.D. Form 214, D.D. Form 1173, or any pertinent SBA form, or a business plan
Describe The Patriot Business Loan Possessing the Capability To Avail Of Greater Funding Quantities And Lower Interest Rates
Loan program made available Patriot Express Loan. The Patriot Business Loan‘s goal is to speed up army veterans’ access to business funding, but there isn’t an ironclad guarantee like there is with most loans. They provided among of the SBA’s shortest loan approval turnaround times. The Patriot Express Loan Program was based on the SBA Express Loan Program, which was previously successful, and enhanced its guarantee and interest rates.
A veteran must have practically all of their company to qualify. They must also be a reservist, a national guard member, solution disabled, or on active duty. The individuals, as mentioned above’ spouses, as well as the widowed partners of those who passed away in remission, were also eligible. Disgraceful release ultimately proved to be a deal-breaker.
The Patriot Express Loan provided finance up to $500,000 for army company owners in the form of personal lines of credit and term loans. That money could be used for beginning costs, even to purchase real estate or firm stock. Refinancing financial obligations has also been an option.
Necessary Substitutions for the Patriot Express Loan Program
Since Patriot Express is no longer available, veteran business owners may be wondering what their best options are for business loans.
SBA loans continue to be among the best financing options for veterans. Even though they no longer provide this program exclusively for veterans, several veteran business owners can still benefit from the SBA’s other loan programs.
The following SBA loan programs are all options for veteran company owners:
- SBA 7(a) loans
- SBA Express loans
- SBA microloans
- SBA CDC/504 loans
How Did The SBA Patriot Express Loan Fare?
Pilot project for the SBA Patriot Express Loan. Some sources claim that higher-than-expected loan default rates were one of the factors that led to the termination of that specific veteran lending program. According to certain studies, one in five borrowers could not repay.
Like FHA or V.A. mortgages, the SBA offers loan guarantees on its commercial loans. The agreement requires the Small Business Administration to reimburse the lender for each loan default.
The program was eventually terminated in 2014 due to financial strain brought on by excessive loan defaults.
In the end, you might have been let down to discover that the Patriot Express loan program is no longer offered. You still have a lot of opportunities from the SBA to fund and expand your veteran-owned small business, as we’ve covered in this guide.
No doubt, any SBA loan will provide the best terms, sums, and interest rates available on the market, regardless of whether you believe an SBA Express loan or an SBA microloan is the best fit for your company. Obtaining an SBA loan will necessitate fulfilling several specified requirements and enduring a time-consuming application process. However, you may discover that the cash you receive is worth the time and effort you put into the business loan application process if you organize your documentation, work hard with your lender, and select the appropriate program for your firm.
Additionally, the SBA (as well as several other organizations) can still offer veteran-specific services to assist in setting your firm on the road to success, even if you don’t qualify for an SBA loan.