Patriot Express Loans: What Percentage Must Be Veteran-owned?
To qualify under the Patriot Express loan program
, an SBA program providing business loans for veterans, 51% of the business must be veteran-owned, including widows or spouses of a veteran. This is simple to calculate if the veteran owns the business 100%. But what about other situations? Here are some of the examples that may apply:
- A veteran owns 51% with the remaining 49% owned by a non-veteran. This is acceptable.
- No one veteran owns 51% but a combination equals that percentage. For example, Fred has a 20% interest and John has a 31% interest, both veterans. This would be acceptable.
- Fred is a veteran and his wife Judy is interested in opening a beauty salon. Even though she is not a veteran, as long as she is the lawful spouse, she can make the application 100% because she may qualify "stand alone" due to her marriage status.
- In the same example above, Fred and Judy may be on the application as 50% each. This is because either of them by themselves would qualify for the program.
- Hank is not a veteran but his father is. His father may make the application as 51% but he cannot act solely as a co-signer. The father must have some active participation in the business, even though the day-to-day operations are managed by Hank.
Bear in mind that only 20% or more owners of the business fill-out and sign the application. So, for example, if a person only has a 15% interest, they would not be guaranteeing the loan or be part of the loan process.
As seen above, the regulations specify that the current lawful spouse of a veteran or service member may apply under the program. Obviously, this would exclude a divorced spouse, but what about all the gradations in between? Here are some of the rules:
- It is uncertain whether a common law marriage would qualify. It would probably be the case that if your state acknowledges certain benefits between two persons who have a common long relationship, it would also apply to this Federal law.
- If you are simply separated with your spouse, the benefits would probably be available. However there is a gray area if you receive a court decree of separation.
- But what if you are merely estranged from your spouse and not communicating? Can the other spouse prevent you from signing the papers for a loan? No. This is because you can make the application alone without the knowledge or consent of the other spouse. The other spouse would not be liable for the loan and wouldn't even be entitled to seek information about it (that would be confidential). It is based solely on your credit.
So, what exactly are these loans? They are under the U.S. Patriot Express program. They are military small business loans exclusively for veterans, reservists, and their spouses and widows. The funding does not come from government sources, but solely from private lenders who are licensed under the SBA. In other words, private lenders disburse the money and they are licensed and supervised by the Small Business Administration. Because the U.S. Government covers any bank losses upon default, there is more incentive for the lenders to make the loans in the first place. Paperwork is specifically devised to be quick and simple, with no tax returns, business plans, or financials. The interest rate is also federally regulated, and is currently only 7.75% or principal and interest of $60.00 per month for every $5,000 borrowed. The loan amounts are typically between $5,000 and $25,000. And now some good news: There are actually lenders who are funding under this program currently. A deserving program for the men and women who have placed their lives on the line for our country.
by: Sue Brinck
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