Calling All Veterans
The SBA has made it a top priority to assist veterans in financing their businesses or even starting up a business. In June of 2007, the SBA created the very popular SBA Patriot Express Loan Program. This loan program, known as the “GI BILL” for businesses, has a maximum loan amount of up to $500,000. It is available to all honorably discharged veterans from active duty, National Guard or Reserve service. The program is also open to existing service-members transitioning out of the military where their service requirements have ended. Even spouses of veterans are eligible for this program. The SBA does require the veteran to own at least 51% of the business. A DD214 is the only service-related document that is required. A DD214 is essentially a one-page record of the veteran’s military record. Obtaining their DD214 can be done online here.
How Can You Use the Funds?
Loan proceeds can be used as a line of credit, a term loan or an owner-occupied commercial mortgage. The veteran can buy a business, finance working capital in a line of credit, purchase machinery and equipment, purchase inventory, or as mentioned above, start a new business.
Skills to Pay the Bills
With the large number of service members returning from both Iraq and Afghanistan, the Patriot Express Loan Program can be a great resource to veterans and is also a wonderful way to assist in job creation. The US Department of Labor has reported 12% of Iraq and Afghanistan war veterans are unemployed. Many veterans have obtained valuable skills and resources that are transferable to the civilian world and some will create new opportunities for themselves that may require financing. The SBA attributes the potential success as business owners to leadership and management skills veterans learned during their active duty and reserve service that are ideally suited for achievement as an entrepreneur.
In the private-sector workforce, veterans are roughly 45% more likely than those without active-duty military experience to be self-employed, according to a recent study commissioned by the SBA’s Office of Advocacy.
Did You Know?
One in seven veterans are self-employed or small-business owners, according to the SBA. About 25% of veterans say they are interested in starting or buying their own business.
Many banks offer SBA Patriot Express loans, but it is important to work with a bank with experience in the Program. Knowing the requirements and paperwork to cut through any red-tape to obtain a decision as quickly as possible is very important. Experienced lenders will also guide and recommend the correct loan structure and some even reduce fees and interest rates as a “thank you” for their service to our Country.