Thinking about entrepreneurship? Veterans might already have what it takes!
Entrepreneurs who have a military background are emerging as one of the fastest growing segments of new business ventures. The Small Business Administration (SBA) estimates that 22 percent of veterans are considering starting or purchasing a business in the near future or are already in the startup phase.
If you’re a vet, you probably have what it takes to establish and run a business. According to an SBA study, more than one-third of veteran business owners had obtained skills from their military service that was relevant to business ownership. Those who had a longer military term had rudimentary training in time management, supervisory techniques, budgeting, accounting and supply chain management.
Stats prove vets’ business acumen. Twenty-five million. That’s the number of small businesses in this country. And 14 percent, or about 3.5 million, of those small businesses are owned by military veterans. With an estimated 24 million military veterans in the U.S., that means that one of about every seven vets is involved in a small business. And, the success of startups by vets is high in comparison to typical new business ventures.
No doubt this is due to the experience and discipline received from their military service. So the future looks good for veterans and business.
Vet-oriented SBA program helps fund business ventures.
There’s a relatively new loan program established by the U.S. Small Business Administration just for the military community and their families. Its purpose is to help them establish or expand their businesses. Called the Patriot Express Loan Initiative, this loan is based on the SBA’s highly successful Express Program but with enhanced guaranty and interest rate features. Many of those eligible may not be aware of the program because it was only launched in June 2007. The Patriot Express loan can be used for business purposes including start-up or expansion expenses, franchise purchases, equipment, working capital, inventory or business-related real estate purchases.
In the first 20 months of the program, the U.S. Small Business Administration approved more than $250 million in loan guarantees to more than 2,800 veterans and their spouses. Much of this funding has been through the Patriot Express program. Those veterans are using the money to establish or expand their small businesses.
Larger loans. Lower rates.
Under this program, larger loans—up to $500,000—are available. This is more than the ordinary SBA program which caps loan amounts at $300,000. The average loan is about $88,000. Patriot Express loans feature SBA’s lowest interest rates for business loans, generally 2.25 percent to 4.75 percent over prime depending upon the size and maturity of the loan. The application process is also more streamlined. To obtain a Patriot Express loan, applicants must contact a bank that offers SBA loans. After loans are submitted by a partnering bank to the SBA, the SBA approves most applications in less than a day.
The SBA recognizes the entire military community.
Patriot Express is available to military community members including veterans, service-disabled veterans, active-duty service members participating in the military’s Transition Assistance Program, Reservists and National Guard members, current spouses of any of the persons, and the widowed spouse of a service member or veteran who died during service or of a service-connected disability.
Find a banker that’s knowledgeable about veterans’ affairs.
When inquiring if your local banker offers the Patriot Express Loan Initiative, it’s almost important to ask your banker how knowledgeable that person is about veterans’ affairs, like several of the specialized bankers at Minnwest Bank. If you find such a specialist, you’ll know he or she also “has what it takes” to help you with your business venture.
Contributing author: William Swanstrom, EVP/Market President, MINNWEST Bank
2010-07-31 23:00:00 -0600