Overview and History
The SBA Patriot Express Loan was launched in 2007 as a special pilot program by the U.S. Small Business Administration (SBA) to help veterans, active-duty service members, reservists, National Guard members, and their spouses obtain faster access to business financing. The goal was to reduce paperwork and speed up approval for loans that could be used to start or expand small businesses.
Eligible applicants could receive loans up to $500,000, with the SBA guaranteeing 85% of loans up to $150,000 and 75% above that amount, significantly reducing lender risk. Interest rates were competitive and application turnaround times were faster than standard SBA loans.
Despite its popularity, the program ended on December 31, 2013, primarily due to a higher default rate compared to other SBA loan programs. The streamlined process may have contributed to riskier loans being approved, leading the SBA to focus on more sustainable veteran lending through existing SBA programs with veteran benefits.
Eligibility Criteria
The Patriot Express Loan catered to a broad range of the military community, including:
- Veterans with honorable discharges
- Service-disabled veterans
- Active-duty members eligible for the Transition Assistance Program (TAP)
- Reservists and National Guard personnel
- Current and widowed spouses of eligible military members
Why Was the Program Discontinued?
An SBA Office of Inspector General audit in 2012 revealed that Patriot Express loans had a markedly higher default rate than other SBA 7(a) loans. The expedited approval process, though well-intentioned, increased financial risk, making the program financially untenable over time. Consequently, it was phased out at the end of 2013.
Current SBA Loan Options for Veterans
Veterans seeking business financing today can benefit from several SBA programs including:
- SBA Veterans Advantage: A fee reduction program that lowers or waives upfront guarantee fees for veterans using SBA 7(a) and Express loans.
- SBA 7(a) Loans: The most common SBA loan option, ideal for general business needs, offering competitive rates and flexible use.
- SBA 504 Loans: Designed for fixed-asset purchases like real estate or equipment with long-term, fixed-rate financing.
- Military Reservist Economic Injury Disaster Loans (MREIDL): Provides working capital when key employees are called to active duty.
Additionally, veteran entrepreneurs can access business training and counseling through SBA initiatives such as the Boots to Business program.
FAQ
Can I still get an SBA Patriot Express Loan?
No, the program ended in 2013 and is no longer available.
Was the Patriot Express Loan a grant?
No, it was a loan requiring repayment with interest.
What is the best SBA loan option for veterans now?
The SBA 7(a) loan with the Veterans Advantage fee waiver is often the best choice for general funding, while the 504 loan suits large asset purchases.
For more details, visit the SBA official website on veteran loan programs or review the SBA Office of Inspector General audit report on the Patriot Express Program.
