For veteran-owned businesses looking for extra capital to get over the "hump" in these trying economic times, there is no better starting point than the U.
S.
Patriot loan program.
Promulgated in June of 2007 and going strong each year, the program confers needed capital to our veterans and spouses for literally any business need.
These loans come from private lenders which are supervised and licensed by the SBA.
These powerful loan packages come with a 90% U.
S.
government guarantee for any losses suffered by the lender.
Right up the alley at a time when our small businesses need them the most.
Over the years, I've received a number of questions about the program, and the purpose of this article is to highlight some of the commonly asked questions.
Do you have to be a combat veteran to qualify? The other day I received a call from a Vietnam era reservist who had been stateside for approximately six years and trained troops who would go onto Southeast Asia.
In the course of the conversation I explain the U.
S.
Patriot program and told him it applied to veterans, including his situation.
His response was: "Well, that's nice, but I'm not a veteran.
" I asked him what he meant.
The explanation was that because he had not been in a combat situation he did not qualify.
This is not the case.
We all acknowledge the invaluable contribution our combat veterans have made to our cherished democracy.
And we all have the utmost respect for their sacrifices.
But realize for purposes of this program, anyone who is ultimately discharged and receives a DD 214 qualifies.
This means that if you have an honorable discharge, you receive the benefits of the program regardless of whether you had been in a combat situation.
Are there benefits for my spouse? The regulations under the U.
S.
Patriot loan initiative specify that the current lawful spouse of a veteran or service member may apply under the program.
Obviously, this would exclude a divorced spouse, but what about all the gradations in between? Here are some of the rules: oIt is uncertain whether a common law marriage would qualify.
It would probably be the case that if your state acknowledges certain benefits between two persons who have a common long relationship, it would also apply to this Federal law.
oIf you are simply separated with your spouse, the benefits would probably be available.
However there is a gray area if you receive a legal decree of separation.
oBut what if you are merely estranged from your spouse and not communicating? Can the other spouse prevent you from signing the papers for a loan? No.
This is because you can make the application alone without the knowledge or consent of the other spouse.
The other spouse would not be liable for the loan and wouldn't even be entitled to seek information about it (it would be confidential).
It is based solely on your credit.
Can the loan be used for everyday cash flow requirements? The simple answer is yes.
Cash flow is generally defined as money's needed for such purposes as meeting payroll, rent, utilities, office supplies, insurance, vehicle payments, equipment rental, and the other usual and customary requirements to keep your doors open, exclusive of capital purchases and inventory.
In other words, what is needed to keep the doors opened and the lights on.
There is no question that a Patriot loan can be used for these purposes.
But how does the bank look at it? Frankly, this depends upon the economy.
A year ago, most bankers would not "bat an eye" allowing this for cash flow requirements, especially during downtime.
But things have changed because of the recent market crash.
There is somewhat of a reluctance for the banker to look at this favorably.
But why? Some bankers look at this like broadcasting the fact your business is not doing well enough to take care of basic needs.
They worry that the income is so low you cannot ensure the future success of the business.
It is almost as if the money is going down a hole and will not be seen again.
But this is not always the case, because the business could be doing very well but reaches a seasonal low each year due to market conditions.
In these times the business can use some help even though it has a healthy profit margin.
On the other hand, if the business uses the proceeds to buy a new printing press or to launch a marketing program, the theory is that it will equate into tangible increased revenues which will increase profit margins.
It will also allow the business to expand.
Whether this is true or not, bear in mind the particular proclivity of the bankers mind.
There are few businesses that do not need to purchase tangible equipment, hire another employee, increase inventory, or expand their market.
With the economy being what it is, it is probably better to package your application with that in mind.
S.
Patriot loan program.
Promulgated in June of 2007 and going strong each year, the program confers needed capital to our veterans and spouses for literally any business need.
These loans come from private lenders which are supervised and licensed by the SBA.
These powerful loan packages come with a 90% U.
S.
government guarantee for any losses suffered by the lender.
Right up the alley at a time when our small businesses need them the most.
Over the years, I've received a number of questions about the program, and the purpose of this article is to highlight some of the commonly asked questions.
Do you have to be a combat veteran to qualify? The other day I received a call from a Vietnam era reservist who had been stateside for approximately six years and trained troops who would go onto Southeast Asia.
In the course of the conversation I explain the U.
S.
Patriot program and told him it applied to veterans, including his situation.
His response was: "Well, that's nice, but I'm not a veteran.
" I asked him what he meant.
The explanation was that because he had not been in a combat situation he did not qualify.
This is not the case.
We all acknowledge the invaluable contribution our combat veterans have made to our cherished democracy.
And we all have the utmost respect for their sacrifices.
But realize for purposes of this program, anyone who is ultimately discharged and receives a DD 214 qualifies.
This means that if you have an honorable discharge, you receive the benefits of the program regardless of whether you had been in a combat situation.
Are there benefits for my spouse? The regulations under the U.
S.
Patriot loan initiative specify that the current lawful spouse of a veteran or service member may apply under the program.
Obviously, this would exclude a divorced spouse, but what about all the gradations in between? Here are some of the rules: oIt is uncertain whether a common law marriage would qualify.
It would probably be the case that if your state acknowledges certain benefits between two persons who have a common long relationship, it would also apply to this Federal law.
oIf you are simply separated with your spouse, the benefits would probably be available.
However there is a gray area if you receive a legal decree of separation.
oBut what if you are merely estranged from your spouse and not communicating? Can the other spouse prevent you from signing the papers for a loan? No.
This is because you can make the application alone without the knowledge or consent of the other spouse.
The other spouse would not be liable for the loan and wouldn't even be entitled to seek information about it (it would be confidential).
It is based solely on your credit.
Can the loan be used for everyday cash flow requirements? The simple answer is yes.
Cash flow is generally defined as money's needed for such purposes as meeting payroll, rent, utilities, office supplies, insurance, vehicle payments, equipment rental, and the other usual and customary requirements to keep your doors open, exclusive of capital purchases and inventory.
In other words, what is needed to keep the doors opened and the lights on.
There is no question that a Patriot loan can be used for these purposes.
But how does the bank look at it? Frankly, this depends upon the economy.
A year ago, most bankers would not "bat an eye" allowing this for cash flow requirements, especially during downtime.
But things have changed because of the recent market crash.
There is somewhat of a reluctance for the banker to look at this favorably.
But why? Some bankers look at this like broadcasting the fact your business is not doing well enough to take care of basic needs.
They worry that the income is so low you cannot ensure the future success of the business.
It is almost as if the money is going down a hole and will not be seen again.
But this is not always the case, because the business could be doing very well but reaches a seasonal low each year due to market conditions.
In these times the business can use some help even though it has a healthy profit margin.
On the other hand, if the business uses the proceeds to buy a new printing press or to launch a marketing program, the theory is that it will equate into tangible increased revenues which will increase profit margins.
It will also allow the business to expand.
Whether this is true or not, bear in mind the particular proclivity of the bankers mind.
There are few businesses that do not need to purchase tangible equipment, hire another employee, increase inventory, or expand their market.
With the economy being what it is, it is probably better to package your application with that in mind.
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