Article by Roger Schlueter, MBA
The SBA Patriot Loan is actually called the SBA Patriot Express. This loan is a mixture of using some of the rules of the SBA 7a Program and some rules of the SBA Express Program. The Bank must be SBA Express Loan eligible, in order to use the Patriot Express Program.
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The loan is Limited to a Total Loan Maximum of $500,000.
The SBA Percent of Guarantee is the same as the SBA 7a Program. The Program guarantees loans of $150,000 and less, 85% of the loan balance at any point in time of the loan term. The Guarantee is 75% for loans over $150,000 up to the Maximum of $500,000.
The Use of Proceeds is the same as the SBA 7a (Term loans for land, building, equipment, inventory, working capital, refinance, leasehold improvements and seasonal line of credit.) but the Patriot also lets the bank finance Revolving Lines of Credit up to a seven year maturity.
The Maturity for the Patriot Loan is up to 7 years on Revolving Lines of Credit and the same as the 7a Program for Real Estate 25 years, Equipment/inventory/working capital 10 years.
Maximum Interest Rate is the same as the SBA 7a program which is less than the SBA Express Program. The Max Interest Rates are:
Loans less than 7 years
$0 to $25,000 is Prime + 4.25%
$25,001 to $50,000 is Prime + 3.25%
Over $50,000 is Prime + 2.25%
Loans 7 Years or Longer you can add a half a point (add 0.50%) to each category.
Guarantee Fees are charged on the on the guaranteed portion* only. The fee is 0.25% on loans with a maturity of 1 year or less. The Guarantee Fee on Loans over 1 year in maturity are 2% for loans up to $150,000 and 3% of loans over $150,000.
* Loan is for $100,000 then the 2% would be levied on 85% of the $100,000 or $85,000 for a Guarantee Fee of $1,700.
Who Qualifies: same as the SBA 7a Program. The business needs to be For Profit, meet 7a Size Standards, show Ability to Repay, Eligible Type of Business, and be of Good Character.
– in Addition the Patriot Express Loan business must be owned and controlled by one or more of the following groups:
Veteran
Active Duty Military
Reservist or National Guard Member or spouse of any of these groups
Widowed Spouse or a Service Member or Veteran who died during Service or of a
Service-Connected Disability
Turn Around Time – The turn around time is suppose to be 24 hrs but that may very. The Turn Around is still faster than the other programs.
The Main Advantages:
Fast Turn Around
Maximum Loan of $500,000
Lower Rate than the Regular Express Program
Streamlined Process
Easy to Use Line of Credit
No Collateral for Amounts of $25,000 and less
Please contact me if you have any questions at roger@rogerschlueter.com or visit my website at schlueterfinancial.com for other information.