SBA Patriot Express Loan

Written by: Jean Scheid • Edited by: Michele McDonough
Updated Jun 18, 2010 • Related Guides: New Business | SBA | Loans

The SBA Patriot Express loan is designed for veterans, active military, and their families to fund an existing business or startup a new business. Here, we will discuss what you need to know about the Patriot Express loan and how to get one.

About the SBA Patriot Express Loan

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Similar to the Express Loan, the Patriot Express loan offers less paperwork to the lender and a fast turnaround decision. Unlike other SBA loan programs, the Patriot Express can be filed electronically through your lender.

Only veterans, active-duty military, reservist or National Guard members or a spouse or widow of any of these groups are eligible for this loan. Loans can be up to $500,000 and it can be used for both existing and new businesses. This loan is great for startup, expansion, equipment purchases, working capital, inventory or to purchase real estate and property.

Patriot Express loans of $150,000 or less are guaranteed by the SBA at 85%, loans between $151,000 and $500,000 are guaranteed at 75%. For loans of $350,000 or higher, the SBA requires lenders to lien all available collateral. This type of loan has the most attractive interest rates ranging from 2.25% to 4.75% over prime depending on the amount and term of the loan.

Rules for the SBA Patriot Express Loan

Just as with other SBA loans, you must seek an approved lender and submit the required Patriot Express loan documents. In addition the new or existing business must be at least 51% owned by a veteran or another qualified candidate.

Applying for the SBA Patriot Express Loan: The Loan Package

Along with the standard loan documents, which can be found in Part Two of this series, the SBA urges those interested in the Patriot Express loan to utilize their Starting a Business Guide to help veterans and other qualified candidates understand how to start, fund, and grow your business. These guidelines are key in applying for the Patriot Express loan so take time to review this SBA resource.

As always, if you need assistance, contact the SBA office nearest you to help you prepare your loan package.

Part Five of these series discusses the SBA 504 Loan.

Slycemedia Jan 31, 2012 12:30 PM

RE: SBA Patriot Express Loan

Can you use the Patriot Express Loan to purchase rental properties?

joe w Oct 15, 2011 8:51 PM

Welcome to the club Bob. PEL is propaganda imho. I hate to be so darned negative but our automotive business just cannot get long term credit lines.

joe w Oct 15, 2011 8:48 PM

Forget about it. Start ups are poison to the banksters and a poor credit score is fatal. In addition, restraunts have one of the highest failure rates. Even GE Capital is easing away from franchise financing in spite of the bull on their website.

joe w Oct 15, 2011 8:44 PM

Juan you are at least in the right place. SBA loans in California seem a lot better than Florida where it is just a waste of time. Probably the only straight shooter out there is Merchantile Capital but as I understand it they only do 504a loans. Good luck! I am a car dealer with a service department. Money is just really tight. I was talking to a loan officer that "do sba loans" (b.s.). She told me the bank has never closed a Patriot Express loan. The banks really cannot make any money off of these.

joe w Oct 15, 2011 8:39 PM

Yeah, get the money from relatives or other source. The SBA will just jerk you around. Go have a beer and forget these bums. Not even credit worthy business concerns can borrow money right now. Anyone who tells you different is misinformed.

Jean Scheid May 13, 2011 5:17 PM

Film Production

Hi,
What you are reading about how tough it is to get a patriot express loan is true. It is true because the SBA doesn't lend the money, banks do and they simply don't make any money on these loans and with the financial crisis, the hate to risk loaning money. As far as needing any collateral--I'm sure you will.
Your best bet is to visit your local SBA office with your business plan, financials and tax returns to see if they can help. If it looks good to the SBA, often they can steer you in the direction of banks that are lending money.
Good luck!

Jean Scheid May 13, 2011 5:14 PM

Hi,
What you are reading about Patriot Express loans being tough to get is true. While the government doesn't lend money, most banks aren't either for these types of loans simply because they don't make money and the risk is high. I am not sure about not needing collateral, but I would suspect you will need some. I would visit your local SBA office for help along with the feasibility of you being able to obtain a loan. The SBA is the first place to start.

ex-medic May 13, 2011 12:08 AM

film production

I'm on my way out of the army. I'm planning on starting a web production company with Patriot Express, but I've been reading it's mostly smoke and mirrors.

I only need 20k or so for equipment, since sets and actors can be pay deferred and bartered (taxable and deductible), and there are ridiculous tax benefits (all fed tax-free, and 30% budget tax credit). A 20k loan equals a 100k web season with no taxes and 30k back from the state before we make a single red cent from viewers and advertising, I just need a bank to sign on so we can get our equipment.

I read that under 25k doesn't require collateral, is there any hope? advice?

Jean Scheid Mar 25, 2011 12:09 PM

To Juan

The credit score can help, however, the lender will want collateral or a big chunk of money down--remember it's up to the lender, not the SBA. I'd try to find some sort of collateral, even if they are new business assets.
Good luck!
Jean

Juan M. Balderas Mar 23, 2011 3:50 PM

sba loan for current military

Hello Jean,
I am trying to start a business before I get out of the military and I dont have any large amount of money or collateral to put for the loan. I do however have a decent credit score of over 700 and I have a partner who is also in the military who wants to start it with me. He does not have any assets either. We want to start a mechanic shop in the the San Diego or Southern California area. What do you suggest.

Jean Scheid Mar 16, 2011 11:48 AM

To Laura

It sounds as if you have approximately the same sort of collateral that I had when I obtained an SBA PEL loan. I don't think you will be required to put any money down--the collateral will be enough here. You next step is patience and research. You can either start calling banks and ask them if they have an SBA loan department (skip the ones that don't) or make an appointment at your local SBA office and bring in your business plan, financials, tax returns, etc. Work with the SBA to help you find a bank that has an SBA loan department--many don't. The process is long--for the bank, not you so hang in there--it took quite a while from start to finish for me--approximately 8 months, however, I had to deal with so many banks before I found the right bank.

Good luck!

Jean

Laura Mar 15, 2011 11:41 PM

Additional information to previous post

In addition, to my previous information, I forgot to include the campground contains a 4 bedroom owners house and is on 12 acres. We would live on site, thus no longer having an additional mortgage.

Laura Mar 15, 2011 11:22 PM

Patriot Express Loan

My husband is retired (26 years active) and we are considering a PEL loan to buy a campground. The property carries itself, plus we have his retirement and I can work from home and keep my current job. We will have over 80K coming in without the campground income (higher now because he is working also). We are only looking for 200K-250K and the property will appraise at or above the purchase price and be used as collateral. Our credit scores are just over 700. Do you think we can find a lender that will do a 0% down PEL? How about a 10% down using some of the money we would receive at closing for the pre-paid seasonal spaces? Any advice?

Jean Scheid Mar 14, 2011 12:03 PM

To Kirk

As you might see from some of my comments to other readers, it's a long task to get a PEL. However, the 1/2 down payment should help and so would a strong partner (not co-signer). The problem with the partner is that they can not own more than 49% of the business--you have to own (as the Vet) at least 51% of the business. I would consider doing both and start by contacting your local SBA office for help.
Good luck,
Jean

Kirk Downing Mar 14, 2011 8:54 AM

PEL for Restaurant Opening

Hi there - I'm a Veteran and my wife and I would like to get a Patriot Express Loan to open a restaurant.

Neither of us have a very good credit score.

Would we be able to get a loan if we made a downpayment equal to the bank's loan liability?

What if we had someone sign on who has excellent credit?

Do both?

Thanks so much for your input.

William J Hoster Mar 11, 2011 9:34 PM

Unemployed once proud to be an american that was looking for a small loan denied

Good Luck to all of you Vets that are applying for a loan of any type during this time of economic crisis If you are new to this country the banks are willing to help .I am just waiting for the next economic crash in this country.

Jean Scheid Mar 11, 2011 10:51 AM

To Jon

Hi Jon,
SBA Patriot Express loans are not easy to get and you will need to put something down, is it possible to get a partner with either money/property/assets/good credit that you can list on your business plan and will back you?

Also, go directly to your local SBA office and ask them to help you..this is the very best starting place and if your office won't work with you, call another one, although they should. SBA office should know who is lending money (banks) and who is not.

Good luck, but I would suggest a financial backer or partner, especially since your business will be seasonal.

Jon hefner Mar 11, 2011 10:07 AM

Young

I am 21 yo in my first enlistment in the air force. I am planning on starting a indoor skate park and skate shop in alexandria va. I know I am young and that scares me when trying to think what the bank will think about giving me a loan. I will be needing $100,000 to start the business, but yet i hardly have any saved money up at the moment to help put into it. The skateboarding scene is really big around here(VA,MD,DC) area but dies down during the winter because they have no place to get out of the cold and snow. I know it will work if i just find the way to start the business. Any help would greatly be appreciated.

Jean Scheid Feb 8, 2011 10:53 AM

To Lana

I believe in order to qualify, both of your names have to be on the business structure entity and the veteran MUST own at least 51%.
Good luck!
Jean

Lana Feb 6, 2011 11:50 AM

Patriotic Express Loan

Hello.

My husband is a veteran and I am interested in obtaining a Patriotic Express Loan. He is a full time college student, so it would be my business. Does he have to cosign for the loan or can it be in my name only?

Jean Scheid Jan 31, 2011 4:17 PM

To Bob

Hi Bob, I am sure many of my readers (including myself) agree with you on the PEL! They are very hard to get! For instance, because my husband and I own a dealership and he is a VET, there were those promised SBA floorplan loans that are impossible to get! I would also contact your local SBA office and tell them you can't find a bank to help so what's the point of offering them! That's what I did and they did indeed help me find a bank for an SEL loan...but it took me an entire year to get it! Keep us posted!

Bob Remillard Jan 31, 2011 3:32 PM

Patriot Express Loan (PEL) for start-up

The SBA Patriot Express Loan Program is broken!! I recently contacted all of the banks in my state listed on the SBA Prefered Lender List. Of the 14 banks, 6 responded. Out of the 6 only 4 were aware of the Patriot Express Loan program. I have selected one bank to talk to regarding the PEL. I feel that Small Business is the answer to the economy and unemployment. Q: How do you eat an elephant? A: One bite at a time! Q: How do you solve unemployment? A: One employee at a time! I contacted the SBA Advocacy Group in Washington with my concerns two weeks ago and have yet to hear back from them. I will update you all as I progress(or regress).

Jean Scheid Jan 14, 2011 10:46 AM

To Pablo - Patriot Express Loan

Hi Pablo!
It took me a while to get our Patriot Express Loan. First, I would suggest calling some local banks and asking if they have an SBA loan department--if they don't move on. Skip the big banks, Wells Fargo and BofA aren't lending anything to vets. I used a local smaller bank--if you can't find one, call your local SBA office and ask them to recommend one.

Also, we got a $250,000 loan for an existing business and only used collateral (equipment) as money down so we had no downpayment. If you have some collateral (for your loan your really only responsible for about $25,000 of the loan in the event it goes sour) so do you have anything they can lien for $25,000? If so, you may not need anything down, but if not, expect at least 10% down.

Biggest advice I can give you is don't give up and take a trip to the http://www.sba.gov-they can realy help with info. Download some of the documents we provide here that SBA loans require and fill them out, that's a great start. Good luck!

pablo Jan 13, 2011 8:38 PM

Hi Jean.
I’m planning on opening a business; I am interested in getting about $298,000. I will like to know how hard is to get the loan, what percentage is the down payment and what is the best bank.

Jean Scheid Dec 8, 2010 10:13 AM

To Shane

Hi Shane,
Yes your partner's credit can be considered as well--you must, however,own at least 51% of the business to qualify (as the veteran). If your credit is average do keep in mind that banks make the final decision and they do look at your credit history. If your partner's credit is strong you may be OK.
Hope this helps,
Jean

Shane Niffenegger Dec 7, 2010 10:26 PM

Working the Numbers

Hi Jean I am a veteran and am looking to get the patriot express sba loan to become a partner with an existing business. When you are partnering is the loan consideration solely based on you or the other owner too? Also I have a average to poor credit rating how will that affect my chances?

Jean Scheid Nov 2, 2010 1:35 PM

Hi Bob,
It is ultimately up to the lender to take on the risk--even thought an SBA express means they only incur 10% of the risk, but the lender also is not making much money from your loan. It did take me 1.5 years to get mine, so call the SBA in DC and your local SBA and dont' give up! I do hear their are banks in Colorado that are lending, but if you get your $40K, you may have to bank with them. The "don't give up," is key here.

Bob Remillard Nov 2, 2010 11:32 AM

Patriot Loan Denied - now What?

Just got denied by a second bank! Both banks say my debt to income ratio is not acceptable. Both banks loved the Business Plan and everything else. Problem is I don't have an income until I launch the business and I can't launch the business until I get a loan. I asked for $40k not much I would say. Where do I go now? I would say in theory the Patriot Express Loan is attractive with 90% guarantee, but the banks want ZERO risk!! Any suggestions? Thank you.

M Damian Billy Oct 25, 2010 10:12 AM

Patriot Express loan for $25K or less

Hi Jean:

I have a technology that is ready to be deployed on a commercial basis. We are fortunate a European bank that will be our distribution agent for the product that will produce $1M in income for the venture over the next 12 months..

What I lack at this time is the $25K required for the attorney fees to finalize the contract. With owing 100% of the firm and being an honorably discharged Marine, what opportunity is there thru the SBA to fund my capital need?

It seems that in FL there are few if any resources for a veteran. I look forward to seeing your feedback.

Sincerely,
Michael

Jean Scheid Oct 19, 2010 3:41 PM

To Bill

Lending is hard these days, even for SBA guaranteed loans, mostly because any lender won't make any money off of the loan because they are government guaranteed loans.

Call your local SBA office and ask them who is lending even if they aren't in your area. You can also call the SBA in Washington and ask them..that's what I did.

Be patient and go to the lending sources recommended. It took me a year to get a Patriot Express loan, but I didn't give up!
Hope this helps,
Jean

Bill Delucchi Oct 19, 2010 2:54 PM

Been denied Patrot Express Loan

Am a Army Reservist and a veteran of OIF. Have started a business and am looking for additional funding utilizing the Patrot Express loan. Created a business plan and had several people proofread it, one was a former bank executive. All said it is a pretty solid plan. Cannot get a loan. Most common excuse is that the "underwriters" are not willing to lend to contractors at this time. Any suggestions?

R.A. Zerquera Aug 16, 2010 3:59 PM

Start a company

I am a Veteran (Go Army), looking to get a loan to start a trucking company. Wanting to get 2 trucks and less than $100K, realistically how possible is this? And would a really, really, REALLY good business plan help my efforts to get a loan for this type of business.

Brian Aug 14, 2010 9:23 PM

Expanding my business

Hello,

I'm in the reserves and in the process of trying to get a loan to expand my video game retail store and would need around $35,000 to do so. My credit score is pretty low though and was wondering how much that would hinder me getting a loan using Patriot Express. Thanks

Jean Scheid Jul 15, 2010 12:08 PM

To K Jeck

I'm not sure if you already own the business or are trying to buy this business by your question. In any event, if you are trying to get an SBA Patriot Express loan to help you pay off these loans, it can be used for that, however, keep in mind the lender will look at your ability to repay the SBA loan so: does this business generate enough revenue to pay off a combined $340,000K loan? Also, you can use it for working capital.
Hope this helps, let me know if you have any more questions.

K Jeck Jul 15, 2010 2:49 AM

In Business

Hi J, my company is currently in business and is paying on a $300K note in addition to an equipment finance loan of 40K. Would the patriot express program allow me or my spouse to purchase that business and eliminate the $300K note? Or can we get some working capital for the business? Thanks. KJ

Jean Scheid Jul 6, 2010 4:00 PM

To Christen

Hi Christen!
I'm not sure of this law, in fact, I am closing on a Patriot Express loan this week in New Mexico? I would call your local SBA office and ask. Here's the link to find the SBA Office in your

state:http://www.sba.gov/localresources/index.html

Good Luck!

Christen Jul 6, 2010 12:34 PM

new loan approved

Hi! I was told that Congress needed to pass the requirements for a Patriot loan before their recess this month. Do you know if they did and what they are or where I can find this information? I appreciate your help!

Jean Scheid Jun 27, 2010 3:47 PM

To Dave

Hi Dave,
On your coffee shop idea, I think this type of loan is fine just as long as your own more than 51% of the stock. Out of state or area should not matter. Good luck!

Dave Jun 26, 2010 2:20 PM

Long Distance Investment

Hi,

I was curious whether I can use the Patriot express loan to invest in a coffeeshop. I have about $8K to invest in a $40K business. So I do fall within the parameters. Still, I will take your advice in other posts and contact my SBA rep.

My question for you was whether I could be the owner of a business in a state other than my home residence? Thanks in advance for your advice and guidance.

Lt Dave

Jean Scheid Jun 25, 2010 12:21 PM

To Adam

As long as your corporate entity shows that you are 51% or more owner, I don't think the SBA will mind the co-sign from your Dad. Good luck.

Adam Jun 24, 2010 11:55 PM

taking over business with me and my dad

I was wondering if I have to be the only one on the loan or can my father be a co signer and have the collateral for the loan but i will have 51% ownership?

Jean Scheid May 10, 2010 12:20 PM

To Joe

Hi Joe,
The Patriot Express Loan is also offered to active duty military! Good luck.
Jean

Joe Nelson May 9, 2010 8:16 PM

Thanks for the info I have one more question

Thanks Jean for the info. The only other question I had was can I be active duty and get the loan I have heard that I have to be getting out of the service in order to get this. Is this true? I want to make sure that I am eligible before I apply. Thanks Again

Jean Scheid May 8, 2010 1:14 PM

Hi Joe!
If you have a 51% interest in the restaurant (as the vet) to be eligible for a Patriot Express Loan. So if you have less than a 51% interest, I don't think you could apply. As far as credit, both the SBA and their affiliated lenders will look intensely at the ability of the business to repay the loan, that's key in obtaining an SBA loan so make sure you have current and actual cash flow proforms (cash flow and projection template links can be found in our Media Gallery. Let me know if you need anything futher.
Jean

Joe May 7, 2010 10:03 PM

Money for investing

Hi,
I am an active duty Marine who has been active duty for 5 years. I want to buy into a restaurant or nightclub back home as a passive investor. I have done a lot of research as far as the business is concerned but my question is my partner would be an established business owner of 10 plus years. I wanted to know if it is possible to utilize the loan without being there physically all of the time and if there was a way that I could do this while remaining on active duty? Also how high does my credit need to be before I even apply for the loan. Thanks for your time I appreciate it.

Jean Scheid Apr 12, 2010 3:34 PM

To Timothy

Hi Timothy,
You can try and apply with a 600 credit score, however, keep in mind that most banks that offer Patriot Express loans look for important items: 1) Do you have enough cash flow to pay back the loan each month, you must be able to prove this convincingly 2) Do you have any inventory or assets the bank can lien or use as collateral? 3) Do you have any money at all to put down on the loan?

Banks do also consider a good credit score. If you have deliquent accounts, they may not approve you.

Hope this helps,
Jean

Timothy Stanton Apr 11, 2010 10:53 PM

Funeral Home

I am a veteran, Have 28 Years exper in the Funeral
industry startedmy own business doing fairly
well but would like to get a patriot loan to get
more working capital credit score around 600
do you see a problem or wait aliitle longer to apply

Jean Scheid Mar 10, 2010 11:13 PM

To Brandon

Hi Brandon,
How many lenders did you pursue? It took us 4 to find the right one and we are in the auto industry (talk about bad industries to be in!)

I would try a small community lender or call some banks and ask if they have their own SBA loan department (that's where we got ours). I would also steer clear of large national banks, Wells Fargo, for example, is not doing any, even though they boast in on their homepage.
Keep trying!

Jean Scheid Mar 10, 2010 11:09 PM

To Yolanda

Hi Yolanda,
You would be eligible because of your spouse and you...meaning you would be 100% owners (a veteran and the spouse of a veteran). Active veterans are still eligible.
Hope this helps!
Jean

Brandon Martinez Mar 10, 2010 1:31 AM

Re: Current Lending Landscape

Well the results are in. The Lender required 50% owner cash investment, but they tried to play it off on the SBA as the bad guy. I have spoken to the SBA, and they insist that they only require 15% owner cash infusion as a requirement, so I will validate Jeans comment that "no matter what the SBA states, the lender makes the final decision on how much of a guarantee they feel safe with..."

Good luck to any who apply for this loan. I have top credit, little debt, and a decent net worth, but still unable to secure a loan for $50K unless I put forth $25K of my own cash. Realize though that the type of business you are pursuing also affects the risk. Retail is still very high risk, therefore more is required from borrowers to start-up or kickoff their own business.

Yolanda B. Mar 9, 2010 9:51 PM

Hi, I'm a spouse. My husband is active duty Army. I'm looking to start-up an online e-commerce business. My husband and I will both be owners in an LLC. I was going to file with us as 50-50 ownership. Would that qualify or would he have to have 51% ownership. Lastly, and most importantly, would we even qualify for this type of loan being that he is active duty with about 6 more years until retirement? Thank you for your info and help.

Jean Scheid Mar 7, 2010 7:23 PM

To Chris

Hi Chris,
Yes members of the US Reverves are eligible for the Patriot Express Loan. Loan terms depend upon the amount borrowed, but can be as high as 20 years. Interest rates are typically between 2.45% and 4.75%. If you are interested in a Patriot Express Loan, I woul visit your lender or local SBA office very soon. President Obama has extended the 90% SBA loan guarantee to March 26, 2010. Also, you must own at least 51% of your business to be elibible.
Hope this helps,
Jean

christopher chastain Mar 7, 2010 3:41 PM

I forgot to tell you

I'm a reservist

christopher chastain Mar 7, 2010 3:39 PM

What is the max terms or length of patriot express loan?

I have business already but like to get some working capital and investment money to improve my assets. So,what is the max length of time on for the loan.

Jean Scheid Feb 26, 2010 1:55 PM

To J Garcia

Retired vets are also eligible for Patriot Express loans. As long as you have your DD214, I would make an appointment with your bank or find your nearest SBA office to discuss the possibility.

Jean Scheid Feb 26, 2010 1:54 PM

Hi Brandon,
My husband, who is a veteran received a PE loan and was asked to provide 50% as well in collateral and owner equity. Unfortunately, no matter what the SBA states, the lender makes the final decision on how much of a guarantee they feel safe with...so in asking for 50%, you lender is doing what they feel comfortable with.

Brandon Martinez Feb 25, 2010 2:12 PM

Current Lending Landscape

Hello,

I am planning on opening my own business and as a veteran I am looking at Patriot Express or Veteran Backed SBA loan to accomodate my startup needs. I just had a visit with a lender who works with the SBA to provide loans. They mentioned that they recently did a PE Loan but that the SBA required 50% owner investment. Is this the trend? What benefit do we have as veterans to appply for a loan if we have to provide 50% of the investment?

Jean Scheid Jan 29, 2010 6:11 PM

For Marvin M.

Hi Marvin,
I still think you should make an appointment with your local SBA office and speak honestly about your personal credit. To be eligible for SBA Patriot Express loans (as well as all SBA loans), you must show the business will have the ability to re-pay the loan. That is the most important issue.

The business you start, and the equity you put in such as inventory, building improvements, cash, etc can all be used to show your strength. Equipment and buildings can be used as collateral.

I say you give it a try!
Good Luck,
Jean

Marvin. M Jan 29, 2010 5:01 PM

Patriot Express

I'm looking to open a restaurant in April. I've heard about the Patriot Express Loan and wonder if there is a problem for vetrans with less than perfect credit. Please advise on what I should do.

Kelly Jan 11, 2010 2:06 PM

Patriot Express for start-up

I am in the process of getting out of the military and would like to open my own business. I do not have my DD214 yet but would like to get my business up and going while on terminal leave. Also, from your experience, have veterans been having any luck getting loans for start-ups?? thank you

Jean Scheid Jan 9, 2010 10:48 PM

Hi Jerry,
I would go find your local SBA office and get their help on applying for a Patriot Express loan. To qualify, they may lien your equipment and other items, but if you have good credit, you can get up to $150,000 guaranteed by the SBA up to 85%. Before you visit your bank, make an appointment with your local SBA office, there are links in these SBA articles to help you find an office near you. Keep in mind that you will need your DD214 paperwork to show veteran eligibility. Good luck!

j garcia Jan 9, 2010 8:56 PM

sba loan for vet

do i quality to make loan as vet retire. i want buy coin laundry mat . owner selling own coin laundry. looking forward your reply. thanks

jerry

SBA Patriot Express Loan

About the SBA Patriot Express Loan

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