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Veterans trying to make it big in small business can take advantage of loans with exceptionally low interest rates thanks to the new Patriot Express program put into place by the Small Business Administration.

As of June 28, the SBA has begun offering Patriot Express loans to veterans and their spouses, as well as other off-duty or transitioning members of the military community. The loans are intended primarily for veterans who currently own businesses or are interested in buying an existing business or franchise. 


With interest rates of 2.25 to 4.75 percent over prime, the Patriot Express program features the lowest rates available through the SBA. Veteran loans are available for up to $500,000, a substantial increase from the $350,000 maximum loan offered to other patrons. The program also boasts the SBA’s fastest turnaround time for loan approvals, according to the agency’s opening press release.

Furthermore, the SBA provides a government guarantee of 85 percent for Patriot Express loans less than $150,000 and 75 percent for loans greater than $150,000. SBA Express loans available for non-veterans, in contrast, normally provide a government guarantee of 50 percent for similar amounts. 

The SBA does not directly provide loans offered through their programs; rather, they provide government guarantees for loans financed through participating banks and credit unions. If a borrower defaults, the government will cover a percentage of the outstanding balance. In effect, the government guarantee offered through the Patriot Express program reduces risk for participating lenders and consequently drives down interest rates on loans.

Since the program’s inception, more than 200 lenders across the country have been approved to offer Patriot Express loans.

Prospective borrowers should note that Patriot Express is a pilot program; veterans may take advantage of the program’s benefits through December 31, 2010, after which the SBA will evaluate the initiative’s performance and decide whether or not to continue.

More information about the program can be found at the Patriot Express program homepage.