How to Get Business Loan Financing for Veterans
02 Jun, 2016 / Comments: Comments Off on How to Get Business Loan Financing for Veterans / By William Mahnic
Military veterans have several benefits that they are eligible for once they exit the military and become citizens once again. One such benefit is free help in locating and obtaining needed funds to start, run or grow a business. The Small Business Administration (SBA) works with the United States Department of Veteran Affairs to aid veterans in securing these types of loans. The SBA created the Patriot Express Pilot Loan Initiative in 2007 in order to provide veterans with easier access to funding for their business ventures. Every year this initiative guarantees over $1 billion in small business loans for veterans who own a small business. If you are interested in starting a small business or already have one, but would like to see it grow or need funds to keep it on its feet, then a small business loan for veterans can be the way to go. This type of loan will likely provide you with some of the best terms available on the market. Here is a look at how to get business loan financing as a veteran and a little bit about how this type of loan works.
Where to Find This Type of Loan
You can obtain a Patriot Express loan from any lender, credit union, bank or other financial institution that participates in the program throughout the country. The SBA guarantees these small business loans for veterans. However, they are not the ones who directly provide them. If you are interested in taking out a Patriot Express loan, then you must apply with a participating lender. If you want to find out more about this type of loan, then you can either get into contact with a participating lender or you can talk to the SBA directly and they will aid you in finding a lender that suites your needs.
One of the reasons that the Patriot Express program is an attractive option for veteran businesses is that it allows veterans to be eligible to receive a loan for as high as $500,000. Additionally, the interest rates for these SBA-regulated veteran loans are capped at 2.25 percent above the current prime rate listed in the Wall Street Journal for short-term loans with lengths of less than five years. This means that veterans can rest assured that they wouldn’t be charged an exorbitant interest rate. Keep in mind that if you take out a loan for less than $50,000, lenders will only be permitted to charge an extra two percent on top of the prime rate instead of 2.25 percent.
In order to qualify for this type of loan, you must have documentation that you received an honorable discharge from the military and that you were disabled during service. Moreover, lenders must be given your eligibility certificate from the Veteran Affairs office in order to successfully apply. Lastly in order to secure the loan, you must own at least 51 percent of the business you are seeking financing for.
The Application Process
Most lenders use a standard processing time that ranges from between two to four weeks. Once the lender has approved your loan, it will then be turned into the Small Business Association to go through one last review before your eligibility is determined. However, the SBA guarantees that they will take no more than 36 hours in order to process a loan and come to a decision. The Patriot Express program uses a streamlined process and so you won’t have to fill out any special or additional paperwork to secure financing. Instead, you will simply have to fill out the typical paperwork given to you by your chosen lender. If the SBA approves you, your loan will typically be disbursed into your account in no more than 24 hours.