Thursday, June 14, 2007

Patriot Express Pilot Loan Initiative

This just in from the SBA as reported in The Wall Street Journal on the new Patriot Express Loan Initiative. I have not yet investigated this program, but it seems the improvement is the higher SBA guarantee level when compared to the typical Express 7(a) guarantee of only 50%. I don't know if there's any reduction in SBA guaranty fees.

Here's the text from The Wall Street Journal...

The Small Business Administration on Wednesday unveiled a government-backed loan program especially for members of the U.S. military. The loan program – named the Patriot Express Pilot Loan Initiative -- is built on the SBA’s Express 7(a) loan program and will grant loans of up to $500,000 to U.S. veterans, certain active-duty military, reservists, National Guard members and spouses. The program will require that borrowers pledge collateral on amounts over $350,000.

The agency says the loans will carry interest rates of 2.25% to 4.75% over prime, depending on the size and maturity of the loan, and will be SBA-backed for 85% of the loan value for loans up to $150,000 and 75% guaranteed by the SBA for larger loan amounts. Those interest rates and loan guaranty levels are the best the SBA offers, the agency says.

The loans will be available for “most business purposes, including start-up, expansion, equipment purchases, working capital, inventory, or business-occupied real-estate purchases,” according to an SBA news release.

"More than 14% of businesses in America are owned by veterans, and SBA is proud that we guarantee more than $1 billion annually in loans for veteran-owned businesses,” SBA Administrator Steven Preston said in the release.

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