Important Update: The Patriot Express loan initiative has been discontinued.
Veterans can still get business loans through the SBA with no upfront fees through the SBA Veterans Advantage program which has been renewed through September 30, 2015.
I’ve kept the Patriot Express program information on this page for informational purposes.
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If you’ve spent years taking orders from superior officers, the thought of being your own boss and becoming an entrepreneur probably has a lot of appeal. Fortunately, the government has programs available for veterans and their spouses who want to start businesses.
Loans are available to help veterans start a new business or expand an existing business. Small business loans for veterans are not administered by the VA, however.
The Patriot Express Small Business Loan program, which is run by the Small Business Administration, allows vets to get funding for their small businesses. If your post military career plans involve starting a business or if you’re a veteran in need of funding to expand an existing business, the Patriot Express Veterans Small Business Loan program may be your best bet.
The Patriot Express Small Business Loan initiative, which was created to give veterans small business loans, is technically a pilot program. This means that although it has been in existence since late June of 2007, it may not be around forever. The program was originally set to expire December 31, 2010, but it has since been extended for another 3 years.
Veterans and veteran owned businesses have received hundreds of millions of dollars in business loans through the program. In the future, the program may be modified, kept as is, or eliminated. For the immediate future, it remains one of the best ways for veterans or their eligible spouses to get financing for their small business venture.
I have assembled a list of frequently asked questions about the Patriot Express loans program and its loan requirements. While I’ve gone to great lengths to ensure its accuracy, this FAQ is not official nor endorsed by any government agency. For complete guidelines and to contact an SBA representative, please visit their website.
Qualifications are straightforward and based on your military status:
A business that is 51% percent or more owned by a qualified veteran or veterans.
First and foremost, your business must be a for profit enterprise. While many types of businesses are eligible, certain types of ventures and industries are not. These include non-profits, lending businesses, businesses with a pyramid structure, gambling businesses, and others. If you are concerned your business may not qualify, contact the SBA for additional information.
Under the Patriot Express loan program, eligible veteran entrepreneurs can borrow up to $500,000. The Small Business Administration will guarantee as much as 85 percent of the amount borrowed for loans of $150,000 or less and up to 75 percent of the loan if it is between $150,000 and $500,000.
You can use the proceeds of your Patriot Express loan for most business purposes. Typical uses of funds include starting a new small business, purchasing equipment or inventory, maintaining working capital, expanding your current business, purchasing real estate for business use, and more.
Similar to the way the VA Home Loan program works, the U.S. government does not actually loan you the money. The government does, however, guarantee a significant percentage of the loan to a lender against default. Essentially, your rich Uncle Sam co-signs your loan application.
You do not have to have collateral in order to get a loan of $25,000 or less. For loans between $25,000 and $350,000, lenders can use their existing collateral policy, but if you are applying for $350,000 or more collateral must be considered.
Interest rates can be negotiated and may be fixed or variable. Lenders may not charge more than 2.25 percent over the Prime Rate for loans of less than 7 years and Prime plus 2.75 percent for loans with a term longer than 7 years. Lenders also have some leeway in that they may charge 1 percent more for loans of $50,000 or less and 2 percent more for loans of $25,000 or less, meaning your interest rate could range anywhere from 2.25 to 4.75 percent over Prime.
Again, interest rates are negotiable so there is no harm in at least trying to bargain for a lower rate.
Local district offices of the SBA maintain lists of Patriot Express loan lenders. The SBA maintains a list of local offices you can find on their website here.
While the Department of Veterans Affairs does not provide any type of VA small business loans, the VA is a strong supporter of the Patriot Express loans program along with the Small Business Administration. Veterans of the military and their spouses do have resources for small business financing at their disposal. If your dream career after leaving the military involves being your own boss, the Patriot Express loan program may make it happen.