The U.S. Small Business Administration has announced the SBA's Patriot Express Pilot Loan Initiative for veterans and members of the military community wanting to establish or expand small businesses. 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 all available collateral.
The SBA has many programs targeted to assist economically and socially disadvantaged individuals, and to help rebuild economically depressed or hurricane shattered communities. According to Joel Szabat, the SBA's Chief of Staff, "The SBA has only one set of programs designed to help people, not for who they are or where they live, but for what they done. These are programs the SBA has established to serve those who have taken up arms and risked their lives for our country."
Patriot Express was recommended to the President by the task force of returning global war on terror heroes, led by the Secretary of Veteran's Affairs, Jim Nicholson.
There are approximately 1.2 million men and women on active duty, 1.8 million in reserves and the National Guard. Of that total, 1.5 million have been deployed to Afghanistan and Iraq since the war on terror began.
There are nearly 45 million veterans in America today. Veterans are an important part of the small business community. According to the SBA's statistics, 15% of veterans are self employed.
Eligible military community members include, Veterans, Service-disabled veterans, Active-duty service members eligible for the military's Transition Assistance Program, Reservists and National Guard members, Current spouses of any of the above and widowed spouses of a service member or veteran who died during service or of a service-connected disability
Eligibility for Reservists and National Guard members is limited to current members of the Reserve or Guard (and their current spouses). Former Reservists and National Guard members (and their spouses) are not eligible, unless they qualify from active duty as Veterans.
Certified copy of a DD Form 214, which is provided for everyone other than dishonorably discharged veterans is required on all Patriot Express loans.
The Patriot Express loan can be used for most business purposes, including start-up, expansion, equipment purchases, working capital, inventory or business-occupied real-estate purchases.
Due to the special nature of Patriot Express, particularly the level of authority and autonomy delegated to lenders under this initiative, SBA is particularly concerned that Patriot Express loan proceeds be used exclusively for business-related purposes.
SBA therefore expects lenders to use reasonable methods to ensure that loan proceeds are used for business-related expenses, which means conformance with verification procedures at least as thorough as those used for their non-SBA guaranteed commercial loans.
At a minimum, lenders must thoroughly communicate to borrowers that all SBA loan proceeds must be used only for business-related purposes, must clearly set forth that requirement on the loan authorization, and must secure a certification from the borrower that all loan proceeds will be so used.
Patriot Express loans feature SBA's lowest interest rates for business loans, generally 2.25 percent to 4.75 percent over prime depending upon the size and maturity of the loan. Lenders cannot charge prepayment fees on SBA loans.
Small business loan can be used for new business or existing business. If you are into the new business then small business loan can be used for buying the raw material, land, machinery, etc but in the existing business, small business loan can be used for paying off the debt, up-gradation of the business by enhancing new machinery, recruitment or advertising etc.
Businessman can opt either for the secured or unsecured loans. Unsecured business loan caters the borrower’s urgent financial requirements as no time is occupied in the collateral evaluation. Small businessmen usually don’t have resources to be kept against the loan so unsecured small business loan is more popular than the secured loan. Moreover, no much time is needed in the paperwork formality.
But if the borrower wants to enjoy the attractive features and larger loaned amount then he should opt for the secured small business finance, but for that he has to place some valuable collateral against the loaned amount.
Leading lenders, high street banks or financial institutions itself are sources from where businessmen can take out small business loans. Moreover, to promote the establishment of industries and new businesses, lenders introduces some schemes under which a businessman can get avail subsidy or grants i.e. which he don’t have to pay back.
Small business loans are also available online. Online is considered as the best and easy way to deal with the shortage of funds. Borrower just has to fill in a simple online form regarding the information asked by the lender.
While applying for the small business loan borrower must be ready with the complete business plan, as lender will consider your application on the basis of your plan and on approval businessman may get the loan very quickly.
Business loans can be used to expand an existing business or to bring a new business into existence.
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Paul Chavez has sinced written about articles on various topics from Finances, Business Loans and Foreclosure Help. Paul Chavez is business consultant with over 10 years of experience specializing in assisting small business owners obtain the financing necessary to realize their dream of starting their own business and is very proud to be aiding America's Heroes. The P. Paul Chavez's top article generates over 14800 views. to your Favourites.
Michael T. Brian has sinced written about articles on various topics from Business Loans, Banking and Business Loans. Michael T.Brian is the author of this article. He is Masters in Business Administration and expert in finance. He writes about various finance related topics. To find. Michael T. Brian's top article generates over 246000 views. to your Favourites.