Q: Your column recently mentioned a Small Business Administration loan program called Patriot Express for military veterans and their families. Can you provide more details about the program?
— Geoff M., Bonita Springs
A: Geoff, yes, if you are a current member or veteran of the military, the Reserves, National Guard or a spouse or widow of any of these you may qualify for a Small Business Administration loan guarantee from a participating lender.
To find a participating lender, go to www.sba.gov/patriotexpress.index.html. Click on “Lender List & PE Forms” and then click on “Approved Patriot Express Lenders.” This will bring up a national list of lenders, some of whom are domiciled or have branches in Southwest Florida.
Banks generally like the program because the government guarantees up to 85 percent of the loan if the borrower defaults. Loans can be used for a variety of purposes such as working capital, startup, expansion, purchase of equipment, inventory or business-occupied real estate.
The SBA guarantees 85 percent of loans up to $150,000 and 75 percent from $150,000 to $500,000. For loans of more than $350,000, lenders are required to take all available collateral, possibly including the deed on your home. Most banks also will require owner equity, which means you must put up to 25 percent of your own money into the business, independent of the SBA loan. The logic here is if you don’t have the confidence to invest your own funds, why should the lender invest in you?
Make no mistake, this is not a government welfare program. Borrowers must qualify based on credit score, collateral, owner equity, a solid business plan, and demonstrate an ability to repay the loan in a timely fashion. However, if you are having trouble securing a conventional business loan, an SBA guarantee may be the solution.
source : http://www.naplesnews.com/news/
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