. This is an excerpt from an interview with a SBA small business loan provider, related to the program known as express USA Patriot. This program is for business business loans for Veterans (active duty members, veterans and their widows and spouses), if the start-ups or existing businesses. The purpose of this interview is to obtain a real, in the trenches, in the view of how the program from someone who does it every day. Does it benefit our veterans?
interview extracts US Patriot Express program loans
p. greetings and thank you for giving me the opportunity to speak with you. R.
p. I would like to start focusing on the US Patriot Express initiative loan program. Title of fantasy, but what exactly?
is a long-winded way of saying the Bush administration came up with a veterinarian for business owners loan program. These are loans of veteran business owners. The funding comes from private lenders and banks that are licensed with the SBA. As an incentive for lenders to make the loan, which are guaranteed by default, i.e., are reimbursed 85% of the value of the loan. I have to tell you, this makes a big difference because it really motivates lenders. Gets ten cents coin and makes them more willing to open their coffers.
p. then the money does not come directly from the VA or the small business administration?
a. right of. The IS not involved in providing the money. However, they are big fans of the program. SBA loans directly contributing money only under its disaster program. In this program, the SBA approved lenders and guarantees the values by default. Private banks and lenders loans actually veterans money.
p. but called a guaranteed SBA loans program. Does not mean that the approvals would be assured if you are a veteran?
a. I wish that it was the case. It’s the approvals that guarantee. If you make a small business loan and does not make their payments and goes into default, the Bank is alert to the Federal Government, and after taking several steps and trying to pick up, the Bank will finally pay 85% of the value of the loan. The guarantee of the SBA acts as a policy of insurance to the lender; 85% guarantees the lender for making the loan.
do p. then the veteran does not receive no special consideration in the process of approval of the loan? A.
of the Act, the lender must use its practices review of usual, customary and prudent credit used for conventional and SBA business loans. But let me cut right through all this. It depends on the lender. We are professional “veteran small businesses” and you will try everything possible to make the loan. Way until this program became popular in June 2007 politician; We were making a lot of loans to veterans and trying everything in our power to say “Yes”. Only have to meet us halfway, more positive than negative in personal credit.
p. OK, so now as well. Due to the 85% guarantee, doesn’t this mean that veterinary applicant only has to put up to 15% of collateral because the rest is covered by the warranty?
a. Unfortunately, does not work that way. First of all, most of my small business loans is not guaranteed and so even don’t ask about warranties. It is not describing your equity in your home, the value of your trade accessories, or anything else. There is simply no right of retention on the property. For larger loan guarantee will be needed and in today’s market, usually it will be real estate.
p. checked credit personal or business of the applicant? I notice that there are a lot of companies online that you can get commercial credit without using your personal social security number. Does it work in this case?
a. Unfortunately, lenders in the majority of cases only check your Equifax, Experian, and TransUnion personal credit report. There are companies out there that promise to get you a credit card or an unsecured small business loan only using your taxpayer identification number and not your social security number. Be careful. Although there are people who have been successful, there are so many that they failed to do so. And it takes much time, because you have to first create credit in the name of the company and then make the application.
p. I am an adult and can tell me as it is. What is the minimum score required?
a. these military loans are how to apply for a credit card. Rarely they based the decision solely on your credit score. They are in the global report of credit. En_cuanto_a that report, are: 1) the credit paying back seven to ten years of history, 2) the current status of your accounts, 3) the number of accounts, 4) the quality of the accounts… ((((.no’s a big difference between a credit card Capital One and platinum American Express, 5) how long has had accounts, 6) matters of public record such as judgments and liens tax 7) consultations and as 8) what are the credit card balances.
p. who can qualify for these loans?
a. the good news is that it applies to a lot of people. It may be a veteran, current service personnel active in the TAP program, veterinary service disabled, the component of the reserve or national guard, or the spouse or widow of any of the above. And if you’re the wife of a veteran, you can apply in your own name. Not have to be a veteran of combat. All what you need is your download honorable roles that are in the form of a DD 214.
p. can qualify any small business? I want to say, can be all it of raising chickens for development of software for systems of control of weapons?
to. curious is should say, because I’ve done two of them. There are very few categories that you make not eligible, including multi-marketing, speculative real estate, games activities, their own them investments private or property real estate, by naming some of them more large exceptions.
p. all those rights, some of the concepts basic have under our belt. How much can request?
R. Iran anywhere from $5,000 to $500,000. I specialize in the smaller Patriot Express from $5,000 to $50,000, which do not require any guarantee. That you require security. In the good ol days ‘ about a year ago, the Bank believes use of accessories from trade or business personal property. Then when the economy worsened, began to require some form of equity. Now most of them require 100% real estate equity, which is increasingly difficult these days because it is diminishing the value of the homes.
p. so easy. I am veterinarian, wants the full $50,000.
a. I’m with you, but remember that you have to qualify for the amount, which is why you get to select how much money you want to borrow and then all the key of our system of credit matrix components are in accordance with your request. We always try to provide you the highest amount, but you must qualify to do so.
p. what will cost me? What are the monthly payments and the interest rate?
. Although it is a difficult time for the credit, is a great time for low payments. A small Patriot Express loan is at least four years interest of 7.75%, which is equivalent to $60 per $5,000 borrowed. These are ten-year fully amortized, principal and interest loans. Because there is no penalty for early payment, you can pay early and stop the interest.
p. then can upload payments?
r. unsecured small loans are variable and not fixed. But because payments extend for a long period of time, as it raises the interest, there is a growth precipitated in the monthly payment. Historically, it began six years at $89 for $5,000 borrowed and they are now up to $60.00.
p. in his Patriot Express initiative loan program, should put the equity in my house or have privileges in my assets?
a. not at all. 100% unsecured are small business loans. In fact, they don’t even ask you or describe their assets.
p. I am in the process of completing my business plan. I submit the application without one? R.
you can. It is not necessary. On the contrary, help. So I tell people if they are a couple of hours of completing your business plan, by all means do so. It is beneficial that even if you do not request the loan. But if you are going to take two or three weeks, don’t sweat it send the request. We always work in the plan of business later.
p. how long est(e) it will take, from beginning to end?
r. larger loans take longer because there is more paperwork and review more required by lenders. Little ones do it very fast. Usually you can get answers in 24 hours and is connected to its account of business within approximately ten days with complete documentation. We have a special software that allows you to speed up the process. The program requires a quick issuance of a number of SBA loan from the central processing center, so a time all finished, can generally obtain a number of SBA loan within one or two days and then wired the money.
p. banks most do these types of loans?
a. any bank that is already approved by the SBA is able to make these loans. But the sad reality is that the majority of banks do not make them. I found even to lenders who have not even heard of the program. They will just run you through their process of application without focusing on the fact that you are a veteran. We are veteran friendly and encouraging to these applications.
p. before this interview, really did not know what a patriot loan was. How taken this time to hear about this loan?
r. the plain fact is that run on Veterans all the time who have not even heard of the program. That hurts. It is here for our military – and we need everyone to help get the word out.
p. If my credit is not good, can I use a co-signer?
a. Unfortunately not. On the other hand, anyone with a 20% or more interest in the business to fill the application and have your credit checked. But keep in mind that you must have at least 51% or more of the veterans to qualify.
p. what happens if I have gone through bankruptcy? I shot myself in the foot?
a. applicants have all the time who have worked after the bankruptcy and your credit in the high 600 score. Some banks do not touch you but will do it. We require that conclude the bankruptcy, wait about 6 to 8 months after to restore credit and demonstrate that you are paying your bills quite the time thereafter. This means that you can’t go on a basis of “money for all” because it must first establish credit and has to demonstrate that it is fulfilling obligations in time. We give you a chance to make a mistake but after you need to show he has learned from the mistakes.
q. assume religiously paying my bills on time, but I have high credit card. Will this hurt my chances?
r. This has become a very big problem. We have a lot of people who pays their bills on time, but they have high credit limits. This is a factor seriously considered by lenders. You have more and more your limits, is considered more negatively. The only problem is that many companies stay afloat with their credit cards and no other options because the banks are not lending.
p. taxes and financial business returns?
r. This is definitely necessary in larger loans, but not small. The documentation is designed to be short and simple by what can be processed quickly. Must
p. incorporate or form an LLC?
a. not all. You can be a sole proprietorship. The nature of the business is not one of the factors in the credit decision.
p. have a score of good credit and do not want any more than it brings down my score. Is there anything I can do?
is a defined problem. We have to pull your personal credit report is mandatory. On the other hand, my staff can give you a general idea of your chances if you know your credit score. That way you won’t be disappointed.
p. would find that the veterinarians who treated as program?
r. absolutely love. For good reason, they have put their lives on the line and feel entitled to a shock of fair start or expand your business. Be grateful that there is a program that is there for them.
p. do have some inside suggestions about how the person can increase your chances? (
insurance a.: the following really help: 1) a business with finance plan. Financial statements are the most important part. But I also say to people that you not try to get an “A” in a term paper. Just a good basic job and trying a “C +”. (2) tell them exactly what you’re going to spend and by. Saying that you need for cash flow don’t quite do it. I had a case where someone had once a restaurant and were expanding their kitchen. I had spent weeks shopping and gave a detailed list of accurate equipment, model numbers and price. This was very impressive and really helped them to obtain a loan. (3) a well written letter accompanying the application positively describing the market and its future plans. Test read a misspelled letter could back fire. Recently, we have received with fourteen errors of spelling in a sentence, which one is the winner!
p. are considered riskier companies? R.
Yes, but are still able to finance them. E.g. restaurants and dry cleaners are considered more risky as a result of Federal studies.
p. is find people more is inclined to enter into business themselves rather than working for someone else?
a. no question about that. Days we have gone when our adult working in factories, large corporations and Government offices, sometimes working for a single employer throughout his career. There have been unleashing massive of these people, due to lack of jobs, and many of them are in the private sector, trying to start their own businesses. It’s sad and exciting at the same time. For this reason, the SBA should provide more loans to small businesses 27 million that can fuel our economy.
P. Now let’s talk about real practicality. We are in a credit crunch like never before. How has it affected their success rate?
r. hit the nail on the head. We are definitely in a credit crisis, and I’m seeing lenders require best credit reports. Fortunately, we are not in the fiasco of the toxic mortgages and have funds for loans. But remember that they are supervised by the SBA and the big problem is that it has closed the secondary market. Although this makes it more difficult, but we are still the very veteran-friendly and give special consideration to them. We continue loans to veterans, several a day, and it plans to do so in the future
in general, how would you rate the program?
r. is a program of great and well deserved. If I were to improve, increase the reach that the Veterans most knew about that.
p. thanks for your time. R.