The U.S. Small Business Administration unveiled a new pilot loan program Wednesday for members of the armed services, military veterans and their spouses.
The Patriot Express Loan Program promises faster turnaround times on applications, lower interest rates and a broader availability.
Military veterans, active-duty members in the military’s Transition Assistance Program, National Guard members and reservists can borrow up to $500,000.
The program is also open to spouses of the above individuals, including those who have lost a husband or wife in service or due to related injuries.
“Prior to Patriot Express, the definition of a veteran was six months of active duty,” said Elton “Mick” Ringsack, regional administrator of the SBA’s Region VIII, which includes Colorado.
That restriction limited the availability of SBA loans to National Guardsmen and reservists, who are more likely to be in business for themselves.
The Patriot Express program is capped at 10,000 loans made on a first-come, first-served basis, said local SBA spokesman Chris Chavez.
Loans of $150,000 or less are backed with an 85 percent government guarantee, while those of $150,000 or more will be backed with a 75 percent guarantee.
Patriot Express loans will carry a maximum interest of the prime rate, currently 8.25 percent, plus 2.25 percent to 4.25 percent, depending on the size and length of the loan.
Lenders will have discretion to provide a lower rate, said Rudi Bianchi, vice president for small-business lending at United Western Bank in Denver.
A long list of lenders is participating in the program, including Bank of Choice, Bank of the West, Colorado Business Bank, J.P. Morgan Chase, Key Bank, Premier Bank, U.S. Bank and Vectra Bank.
The new loan program speeds up processing time to three days by accepting an originating bank’s loan documents rather than requiring SBA forms, Bianchi said.
Borrowed funds can be used for startup, equipment purchases, working capital, inventory or the purchase of business-related real estate.
Colorado has a high concentration of veterans and businesses owned by veterans, who account for about 15 percent of all small businesses nationally, Ringsack said.
About 425,000 veterans, 30,000 active-duty military personnel, 5,000 reservists and a similar number of National Guard members live in the state, he said.
More information about the new loan program is available at sba.gov /patriotexpress.
The SBA guarantees about $1 billion worth of loans to veterans each year, including through the Military Reserve Economic Injury Disaster Loan Program, which provides loans of up to $1.5 million for small businesses injured because the owner or essential employees have been called to active duty.
Staff writer Aldo Svaldi can be reached at 303-954-1410 or asvaldi@denverpost.com.
