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NGExpert financial copywriter
One of the most popular financing options for veteran-owned businesses was the SBA Patriot Express program, which ended in 2013.
If you’re a veteran-owned business looking for financing, you’ve probably researched SBA Patriot Express loans. Though the pilot loan program ended in 2013, there are plenty of financing alternatives available for veteran and military business owners today.
Keep reading to find out how the SBA Patriot Express loan worked, what your options are now and which veteran-focused SBA resources you should take advantage of.
Page written by Paige Smith. Last reviewed on August 14, 2024. Next review due October 1, 2025.
The SBA Patriot Express, also known as the Patriot Express Pilot Loan Guarantee Initiative, was a loan program designed to give veteran business owners and other eligible military members expedited financing to start or expand their businesses.
The SBA started the Patriot Express program in 2007 under the umbrella of the 7(a) loan program. Qualified businesses could receive up to $500,000 to use for a variety of business-related purposes. To be eligible for the loan, businesses had to meet the SBA’s typical 7(a) eligibility criteria, which includes falling within SBA small business size guidelines, being a for-profit operation and doing business in the US.
However, business owners also had to be members of one of the following groups to be eligible for the Patriot Express: veterans, service-disabled veterans, active-duty members of the military in the Transition Assistance Program (TAP), National Guard members or reservists.
The Patriot Express loan was an appealing option for veteran-owned businesses and other military members for three key reasons:
No, the Patriot Express program ended in 2013. However, in the first four years the program ran, it funded over $663 million in SBA-guaranteed loans to 7,650 veterans.
According to a report from the US Government Accountability Office, the default rate on Patriot Express loans was higher than other SBA loans. One in five business owners who borrowed less than $25,000 from Patriot Express couldn’t repay their loans. When the program’s losses began exceeding its income, the SBA discontinued the program.
Fortunately, there are plenty of financing solutions for veteran-owned businesses or military entrepreneurs looking for capital. Here are some options to consider:
The SBA Express loan is part of the 7(a) program, but it stands out for its speed. Instead of waiting weeks or months for a response from your application, you’ll hear back from the SBA within 36 hours. If you qualify, you can get up to $500,000 to use for a term loan or business line of credit. You can put the funds toward a variety of areas, including business expansion, equipment and real estate purchases, working capital and debt refinancing.
Interest rates for Express loans are 4.5-6.5% above the current prime rate, depending on the amount of money you receive. Repayment terms for lines of credit are up to seven years, and between 10 and 25 years for term loans. For qualified veterans or spouses of veterans, the guaranty fee on Express loans is 0%.
The Military Reservist Economic Injury Disaster Loan Program (MREIDL) is designed to support small businesses whose essential military reservist employees are called to active duty. MREIDL gives loans of up to $2 million to businesses that have suffered economic losses in the wake of a military reservist employee leaving for active duty.
The SBA determines your exact funding amount according to your business’s losses, your business interruption insurance and how much funding you have to maintain operations. If you have enough capital to continue operations on your own, you won’t qualify for the MREIDL loan.
Your business can use the funds for working capital only—not to cover lost income, expand your business or refinance debt.
Here are the terms:
Veteran-owned businesses and military entrepreneurs can also apply for the SBA’s other loans, including:
Beyond financing, the SBA also has a handful of helpful programs and resources for veteran business owners.
If you get certified as a service-disabled veteran-owned small business (SDVOSB) with the SBA’s VetCert program, you can compete for federal sole-source and set-aside business contracts. The federal government sets aside 3% of all federal contracting dollars for SDVOSBs.
You can also get certified as a veteran-owned small businesses (VOSB) to pursue sole-source and set-aside business contracts with the US Department of Veterans Affairs (VA). The VA sets aside a minimum of 7% of its contracting dollars each year for VOSBs and SDVOSBs. Getting certified also gives you access to business training, counseling and networking opportunities.
Though the VA used to handle the certification process for veteran-owned businesses, the SBA is in charge as of January 1, 2023. To qualify for certification, your business has to be at least 51% veteran-owned and controlled, you need to abide by the SBA small business size rules and you need to be registered as a small business with Sam.gov. You can visit the VetCert website to apply for certification or review the list of FAQs here.
As a VOSB, you can also potentially access unused federally owned personal property for your business purposes—for free. To be eligible, your business must:
For more details on the program, contact the State Agency for Surplus Property (SASP) in the state where your VOSB is located.
Purchasing a franchise is a popular option for veteran entrepreneurs looking to own a business. Veterans make up 7% of the US adult population, but they account for 14% of all franchise owners. Not only do franchises come with instant brand recognition, many also have turnkey operating systems that make the transition to ownership a little easier.
If you’re interested in financing a franchise, here are some resources that can help:
The Office of Veterans Business Development (OVBD) is an SBA department dedicated to supporting veteran business owners, service-disabled veteran business owners, Reserve Component members and their dependents and survivors.
The OVBD has countless resources for veterans, including training, coaching, mentorship, grant and networking opportunities. See the full list of categorized resources here or check out these popular offerings:
Ask yourself these questions before deciding which SBA loan to apply for:
Check out the SBA’s Lender Match tool to find lenders in your area, or sign up with Swoop for personalized guidance on the right loan for you.
To work out the monthly repayments of your loan, use our SBA loan calculator here.
If you’re a veteran-owned business in need of financing, Swoop can simplify your search process. Our detailed financing comparisons give you a clear breakdown of your options, so you can make the choice that sets you up for success. It just takes a few minutes to join. Register with Swoop today.
Written by
Paige Smith is a content marketing writer specializing in the intersection of business, finance, and tech. Paige regularly features on a number of B2B finance and fintech websites including Fundera, Funding Circle, Fundbox and Nav, amongst others.
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The interest rate on Patriot Express loans was 2.25-4.75% above the prime rate during the years the Patriot Express program was in effect. The program ended in 2013.
The Patriot Express program ended in 2013. However, when the program was in effect from 2007 to 2013, eligible groups included veterans, service-disabled veterans, active-duty members of the military in the Transition Assistance Program (TAP), National Guard members and reservists.
The easiest SBA loan to get approved for depends on your credit score and business qualifications. You can generally qualify for an SBA microloan with a credit score of 620, but you’ll need a credit score of 640 or above to qualify for a 7(a) loan.
The minimum credit score for an SBA Express loan is usually 640.
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