SBA Patriot Express Loans – Small Business Loans For Veteran-Owned Businesses – Is Anyone Lending? – Business Loans

You are a veteran or current service member and are bitten by the entrepreneur bug. Truth be known, you have always been an idea person, and mull over in your mind constantly business models and new strategies. You can’t wait to start your own business. Or, you are currently in business and exploding with concepts for expansion. In both instances, you have always dreamed taking on the world by succeeding in your own business. Your biggest problem is: How do you start? Where do I go from here to put into effect those ideas? More significantly, who is going give you the working capital (that’s right, the money) to put those fervent hopes to the test?Well, there is something out there for you. Congress has rightfully acknowledged the service our veterans have conferred upon the nation by providing various benefit programs. We are all aware of benefits under the categories of home loans, education, rehabilitation, and the like, but what if you are the owner of a business? Fortunately there is a program that is devised specifically for our veteran and service-disabled business owners. It comes in the form of reasonable interest business loans administered through the U.S. Small Business Administration (“SBA”) and is called the Patriot Express Loan Program.The SBA since 1953 has been in the business of promoting the interests of small businesses. Traditionally, they were largely neglected by large banks and had to secure their financing by reaching into their own pockets, as well as gingerly extending a hand toward families and friends. So in order to encourage the banks to open up their coffers, they came up with the idea of guaranteeing any default a bank would have after loaning the money. Bear in mind this is not my money coming directly from the Veterans Administration or the U.S. government, but from private banks. The SBA loans direct taxpayer dollars only in cases of the disasters (“FEMA” loans). So then the idea is to give banks the incentive to make a loan because 85% of it is now guaranteed against default with the loss reimbursed from the government. The result: hopefully banks will be more encouraged to make the loan in the first place. This all makes sense from an economic standpoint because as we all know, small businesses grow into large and more productive business models.If you are currently a business owner or planning to take the plunge shortly, paramount in your mind is access to capital. Even the best ideas need the backing of moneys earmarked for development, advertising, inventory, office supplies and equipment, rental of office space, production costs, payroll, and the whole panoply of cash flow needs. This applies across the board to start-up businesses as well as existing ones who wish to expand. But where do you go to receive such funding? It is a dilemma that has been analyzed by Congress and they have come up with a solution.So for years the SBA was licensing the private lenders and monitoring their activities along this line. But what about us veterans? Finally on Flag Day, June 2007, they inaugurated the “Patriot Express Loan Program” which was specifically devised for veteran own businesses. It worked under the same business model so the capital would land in the laps of such deserving business owners. Making it even easier, all existing licensed SBA lenders could get involved in the program with little paperwork. In fact, they used the same basic forms.The loan amounts are between $5,000 and $500,000. The larger loans typically require 100% real estate collateral, more comprehensive financial paperwork, and a cash down payment if you are startup. But for the smaller loans between $5,000 and $25,000, they trimmed down the paperwork and made it especially easy without tax returns, business plans, or financials. As a “lean and mean” application process, it allows the lenders to make decisions within one or two days with funding in ten days by the wiring of the funds directly into a business account.Because they are unsecured loans, the personal credit of the owners is analyzed. The good news is that many lenders allow a favorable review of such credit reports so as to give the maximum benefit to our veterans.Realizing business owners need flexibility in repayment, it was formulated so the loans can be paid off early, stopping all interest, and without a prepayment penalty. Thus, if the owner receives a large draw or payment on a contract, all or part of it can be paid down. And to reduce the monthly payment, it was spread out as a ten year fully amortized, principal and interest loan. Notes that unsecured loans are primarily adjustable rate vehicles, so the interest rate goes up and down based on the Wall Street Journal Prime. But because the payments are spread out over such a long period of time, an increase in the interest rate does not equates to that large of a jump in the monthly payment. This is all good news in our current economy since interest rates have fallen for the last several years.To further simplify matters, there is no longer a need to send in a check with a your payment coupon, since debits are done electronically on the first of the month through a business account.Sounds simple? Well it is, exactly what our veteran-owned businesses deserve. The program is scheduled to be renewed in December of 2010 so in the meantime, it is alive and well as a direct benefit to our veteran businesses, and to jumpstart our economy. Let us not forget that there are 27 million small businesses in this country, and they provide approximately 2/3 of the available jobs.To sum up, here are some of the details of the program:Who May Apply for These Business Loans:o Veterans
o Service-disabled veterans
o Active duty service members
o Reservists and National Guard Members
o Current spouse of a veteran or service member
o The widowed spouse of a service member who died as a result of a service disabilityWhat kinds of businesses? Applies to both start-ups and established businesses, regardless of size, and whether a sole proprietorship, partnership, LLC, or corporation.What kind of credit is needed? This program allows a special concession in the form of a “second look” at your credit report with a liberal and favorable review.How Long Will it be in Place? It was passed into law on June 28, 2007. It is scheduled to be in effect until 2010, when it will be reviewed by Congress. At that point a determination will be made as to whether it will be a permanent program or simply renewed. In other words, it is a pilot program and is not a permanent part of the SBA loan portfolio yet.What can the loan be used for? For most business purposes, including start-up, expansion, equipment, cash flow, payroll, overhead, working capital, or inventory.Lender Incentives to make these Loans. As with most loans through the SBA, the Federal government does not actually loan the money. The lending is done by private banks and finance companies. In order to give these institutions the incentive to make the loans, the SBA guarantees any defaults. For example, for loans up to $150,000.00, there is an SBA guarantee of 85%.TERMSo Loan amounts starting from $5,000
o No coupons or mailing-automatic ACH debit from your business account
o No prepayment penalty or balloon payments-pay off early and stop the interest
o Interest as low as 7.75%BENEFITSo Simplified paperwork
o Quick response time
o Business plans, financials, and tax returns are not required
o No collateral required
o Establishes credit for your business
o Money is wired directly into your business checking account

SBA Small Business Loans and How They Can Be Used – Business Loans

Small Business Administration (SBA) business loans come in several sizes and forms. Of course, the SBA does not actually “loan” the money, they only “guarantee” loans made through banks and other financial institutions. However, depending on the size of your business and the stage your business development is in, one of the SBA business loan programs may work for you.The first thing you need to determine is whether or not the SBA considers your business a “small business”. It is generally thought that the standard of 500 or fewer employees comprises a “small business.” However, that is not always the case. The SBA has definitions for small businesses that run from a maximum of 100 employees to 1,500 employees…and from a maximum of $0.75 million in annual revenue, to $27.0 million in annual revenue.So, your first job is to determine if your business is really considered a “small business.” You can do this by contacting your local SBA District Office, or online at sba.gov.The 7(a) SBA loan
The most popular of SBA business loans is their 7(a) loan program. Money from this loan can be used for just about any business purpose, and you should apply for this loan through your regular bank. You will need to present a complete business plan when you make your application. Even though the SBA does not make the actual loan, you will have to follow the SBA loan application process.What this means is that both the bank and the SBA must approve your loan. Both you and your business (if it is currently operating) must have a good credit standing when you make your application. Also, if your bank turns down your loan application–that’s it…there is nothing the SBA can do at this point to help you. Your best bet then is to improve your business plan and look for another bank.CDC/504 SBA Loan
This is a well-used program, but it is used strictly to purchase the assets of a business, or to pay for physical improvements. The money cannot be used for working capital, refinancing, or repaying debt. This loan program must also be handled through your bank (or other financial institution), so that is where you should start.SBA Micro-loan
This program was intended for short-term loans, with a maximum of $35,000. The SBA has designated only certain lenders to process these loans. This specific program has not worked well because of the excessive paperwork and government bureaucracy, but it is always worth discussing with your banker, or your nearest SBA District Office.Export Express Loan
The SBA export express loan is for those small businesses that have problems financing exports…usually due to the lengthy time required to process typical export loans. In this program the SBA guarantees up to 90 percent on export loans and gives an approval response in less than 24 hours. Eligibility is the same as for 7(a) loans, but you must have been in business for at least 12 months.Community Express Program
This is currently a very popular program because Sam’s Club has partnered with an SBA business lender to provide low interest rate loans to smaller businesses. The minimum loan is $5,000 and the maximum loan is $25,000. You can actually make an online application for this loan at samsclub.com (click on Services). The program was initially set up to make quick decisions on loans in “underserved” communities, and was then expanded through the “Community Reinvestment Act.”That is a brief overview of the major programs for SBA business loans. Most of these programs can be reached through your local bank, or directly from your local SBA District Office.

Low Rate Business Loans – Cheap and Reasonable Financial Aid For Business – Business Loans

For the overall growth and development of any business, you should have a constant supply of finances. But at times, it can be such that you might not have the right amount of finances to cover the expenses. Since it involves a large amount of finances, it is impossible to arrange it on your own. Low rate business loans are what you must consider in circumstances like these. You can avail these loans as per your need and convenience.The amount derived under these loans can be used for practically anything concerning your business. You can use the loans to start a new business or expand the existing one. It can be used to acquire a new plot, purchasing raw materials, installing and upgrading machinery and tools, paying wages to staff, clearing up past dues and so on.These loans are approved to you by categorizing it in to secured and unsecured form. Secured forms of the loans are meant fore those individuals who are looking for a bigger amount and can afford to place any valuable asset as collateral. The amounts under this option of the loans are approved on the basis of equity value present in the collateral. It is due to the presence of collateral that you get to derive the loans with low interest rates.If you are in need of smaller amount of finances, then you can consider availing the unsecured form of the loans. The interest rate levied on the loans is slightly higher so as to minimize the risks in the absence of collateral. But due to the intense competition among the lenders, a proper research will help you the loans with competitive rates.Before applying for the loans, it is suggested to prepare a detailed report or a plan to convince the lender about the viability of business. The better the plan will be, in turn it paves the way for you to grab a better loan package. Further to obtain a better loan, you can also use the online mode. Bad credit borrowers too can find a suitable loan deal by applying online.With low rate business loans, it has surely become easier for you to set up a new business or boost the existing one without putting too much effort.

3 Things Not to Do When Applying For Business Loans – Business Loans

Small business owners are some of the most hard working and knowledgeable people on this planet. They have big dreams and nothing can get in their way. One fall back for such a driven and motivated person is that often times, certain operational functions are not carried out correctly. Because small business owners want to move swiftly, certain details can often be overlooked, causing the business to not run as smoothly as we all want it to.Applying for business loans is one of those operational functions that small business owners just can not seem to get their arms around. Here are a few tips on some of the things you should not do when applying for business loans.Number 1 – Banks and lending institutions have no interest in taking on any kind of risk whatsoever. The recession has spooked lenders to not lend out money to anyone, or any business that does not have exactly what they are looking for. In knowing this, it is important to understand what the banks’ underwriting guidelines are. Do not be intimidated by the bank or its loan officers. Once you understand how their processes and guidelines work, it is easy to entertain those processes and guidelines. Ask the bank what it will take to be approved for the particular business loan you are looking for. Do they want a certain personal credit score? Do they require a good business credit score? Do they require you to be in business for so many years? Once you have found out what those guidelines are, you can go back and work on falling within those guidelines. Do not walk into a bank and apply for a business loan without first knowing what their underwriting guidelines are.Number 2 – Your credit score is one of the biggest factors determining whether or not you are going to be approved for business financing. Many banks are going to require that you have a decent personal credit score along with a good business credit score. Yes, the two scores are different. Before applying for financing, you need to check both your personal credit score along with your business credit score to make sure they are what you think they are. Applying for a business loan without knowing what those scores are is a big risk. There is nothing worse than applying for a business loan and being turned down because you thought you had a 700 credit score and you really had a 620. This will also affect your future chances of being approved for a business loan with any other bank or lender. Once you have been denied by three banks, you are most likely going to be denied by all other banks because your credit score has been checked too many times in such a short period. Do yourself and your business a favor and know your own numbers before anyone else does.Number 3 – There are two facts that many small business owners fail to see in our current economy. Number one is that nearly every small business owner in this country is starving for money, which means there are thousands of small business loan applications sitting on loan officers’ desks. Number two, loan officers are paid on commission, which means they are only paid when a loan has been closed. If we know these two facts to be true, then it is vitally important to have a very well assembled loan package. If you give the loan officer any excuse whatsoever to have to find more information on your business, your loan application is going right in the trash. Loan officers want to be paid, which we know only happens when a loan is closed. In this economy, loan officers are only going to spend their precious time on loan applications that they know are easy to close. Your loan application has to be prepared with everything the bank wants to see when applying for a business loan. This includes a well written business plan, professional looking financial documents, articles of incorporation, and good personal and business credit scores. If you have these documents, do not put them all in a shoe box and walk into the bank. Organize them neatly and professionally so the banks perception of your business is a positive one. Do not think you are going to be approved for a bank loan or line of credit without being prepared.In conclusion, think about the banks money as your own hard earned money. Would you lend out money to a business owner that does not have what is required to own and operate a low risk, positive cash flowing business? No, probably not. Put yourself in the banks’ shoes and think about what you would want to see. The more prepared you are when applying for business financing, the better your chances of getting approved for business financing.