January 14, 2013
By Michael Fina, Vice President Union Affinity Manager, First Trade Union Bank
Deciding to step out on your own and start a small business, or even grow an existing business in today's economy, can be challenging. But the Small Business Administration's (SBA) Patriot Express Loan program is giving veterans, reservists, National Guard members and even their spouses or widowed spouses, the opportunity to fast track the whole lending experience and get the funding they need much quicker.
"The main purpose of the SBA is to alleviate some sort of weakness that makes conventional lending difficult," says Kathleen Kelly, Vice President / SBA Lending for First Trade Union Bank. In 2012, FTUB approved 22 percent of their total SBA loans to veterans through the SBA's Patriot Express Program, earning the institution the distinction of being the number one SBA Lender to Veterans.
Patriot Express loans can be used for a variety of purposes, “including build outs, new inventory, working capital, and acquiring equipmentor real estate, among various other purposes," Kelly says.
Unlike the old GI Bill, loan approvals are not automatic. However, applying for funding through the Patriot Express Program makes lending a lot more attractive to banks. It is important to note, still, that banks expect creditworthiness, personal cash injection, available collateral and cash flow. With startups, a well-formulated business plan with sound projections and experience in the industry are key to obtaining funding.
Patriot Express loans are available up to $500,000 and have a 75 percent to 85 percent guarantee to the bank. This can be in the form of a term loan or a line of credit.
The recession has hit business startups hard, and only underscores the need for programs like Patriot Express. According to the latest statistics from the SBA, the rate of new business startups from 2007 to 2010, fell 12 percent from 844,000 to 742,000. New startups are also creating fewer new jobs.
But the Patriot Express Program is just one type of lending program that preferred banks like FTUB are offering small business customers looking to buck the downward trend. Other available programs might be better suited to different individuals and their circumstances. Some, for instance, cater to businesses looking to purchase commercial real estate, while others are tailored to exporters.
Preferred lenders like FTUB have the expertise to easily navigate the system and can help every applicant decide what type of loan program is right for them. The SBA, meanwhile, can help existing small business owners and potential small business owners gain access to a variety of free counseling services. They'll even help you write a business plan for free, through services such as SCORE or MSBDC
For more information, check out www.SBA.govor contact Kathleen Kelly at firstname.lastname@example.org.