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VAMBOA no fee loans

There is great news for veteran entrepreneurs! The U.S. Small Business Administration (SBA) is extendingits Veterans Advantage program through September 30, 2015. The Veterans Advantage program is also being expanded to include loans up to $5 million. The SBA will continue to offer its provision to eliminate the upfront fee paid by all borrowers for the guaranteed portion of 7(a) loans of $150,000 or less.

Prior to the change, entrepreneurs using the SBA guarantee through private lenders had to pay up to 2% of the guaranteed portion of their loans. This would leave small business owners with fees of up to $2,700.

The SBA is also waiving servicing fees for participating lenders paid by them on loans of $150,000 or less.  Beginning on October 1, 2014, the servicing fee that lenders pay each month on 7(a) loans greater than $150,000 will drop to 0.519% on the guaranteed portion of the outstanding balance.

The up-front guaranty fee is being waived for qualified Veteran owned small business owners using SBA Express loans for amounts up to $350,000.  For Veterans using 7(a) loans outside the Express program, upfront fees continue to be waived for loans up to $150,000.

For loans of $150,000 to $5 million, with a maturity in excess of 12 months, the no upfront-fee will drop by 50% using this formula:

Loans of $150,001 to $700,000 will be at 1.5% of the guaranteed portion.

Loans of $700,001 to $5,000,000 will be at 1.75% of the guaranteed portion up to $1,000,000, plus an additional 1.875% of the guaranteed portion over $1,000,000.

Loans with a maturity of 12 months or less can expect to pay an upfront fee of 0.125% of the guaranteed portion.

In order to qualify for SBA Veterans Advantage, small businesses must be at least 51% owned and managed by an individual or individuals who are veterans, service-disabled veterans, active duty military service member participating in the military’s Transition Assistance Program (TAP), Reservists and National Guard members. Also eligible are the current spouses of any of the previous,  or the widowed spouses of service members who died while in service, or of a service-connected disability.  Verifying documentation proving eligibility is required.

The Veteran and Military Business Owners Association (VAMBOA) is a non-profit business trade association that promotes and assists Veteran Business Owners, Service Disabled Veteran Owned Businesses (SDVOB) and Military Business Owners. Small businesses are the backbone of our economy and responsible for job generation. That is why VAMBOA provides its members with Business Coaching, Contracting Opportunities, a Blog that provides information, Networking contacts and other resources. Membership is FREE to Veterans. Join Now!

VAMBOA: SBA Extends No-Fee Loans: By Debbie Gregory

In 1546, writer, John Heywood was credited for the phrase, “Many hands make light work.” But for small businesses, especially Veteran owned small businesses, very few hands carry a majority of the load. The success or failure of a small business can easily be shaped by the presence or absence of its owner, or a key employee.

With the number of Reservists who own small businesses and have been called to active duty in support of their country, a significant number of them have seen their economic fortunes suffer as a result of their military service. But the good news is that there is relief for these entrepreneurs.

Small businesses that sustained economic losses due to their owner or a key employee being summoned to active duty can apply for a loan of up to $2 million from the U.S. Small Business Administration (SBA).

The SBA provides Military Reservist Economic Injury Disaster Loan (MREIDL) to small businesses affected by the absence of a critical military employee. Applications for MREIDL loans are accepted any time from the date that the member was notified of their call-up to one year after the date of discharge or release from active duty. The loans are designed to allow eligible small business to maintain a current balance on operating expenses that the business could have covered if the business owner hadn’t been called to active duty.

The MREIDL program is managed by the SBA’s Office of Disaster Assistance. The loan is a direct working capital loan, not meant to grow or expand the recipient business, but to maintain the funding of daily operations. It also can’t be used to replace lost profits or refinance long term debt. Interest rates on MREIDL loans are at 4%. No collateral is required to secure MREIDL loans of $50, 000 or less.

Interested Reservist business owners should visit the SBA’s MREIDL portal where they can find more information, including how to apply for the loan. Reservist business owners can also call the SBA’s Disaster Assistance Customer Service Center at (800) 659-2955 or email the office at disastercustomerservice@sba.gov.

Veteran business owners and military business owners often need SBA loans to either get off the ground or to grow their businesses. SBA business loans provide businesses the chance to build larger facilities and obtain necessary equipment and machinery, among other things, by offering small business loans specifically created for smaller entities. There are different SBA loan programs to help starting and growing a business. These programs come with different SBA loan rates but they are all loans that can be used for fundamental businesses investments.

One of these SBA lending programs is the Patriot Express Loan Program, a program specifically created for SBA small business loans for veteran business owners and military business owners. The Patriot Express loans are only available to veteran business owners and military business owners, generally decreasing the competition between businesses, but competition is still high among veteran owned businesses. Eligibility for these SBA loans is only applicable through the end of December 2010. SBA business loans programs such as the Patriot Express loans are a step forward for military business owners and veteran business owners because they often have smaller SBA loan rates than other SBA lending programs.

SBA small business loans for veteran owned businesses and military owned businesses are made to meet the financial requirements for small businesses in terms of SBA loan rates and SBA lending repayment programs. SBA loans specifically created for military businesses are usually more affordable than other small business loans from other lenders. Veteran business owners can use SBA business loans to purchase a multitude of business items. These small business loans can be used toward expanding a business structure, adding an additional room or purchasing new business space altogether. The SBA small business loans are very flexible in this regard. Unlike certain other general loans or small business loans that must be put toward a specific purpose in order to be obtained, SBA business loans help businesses thrive and grow in every department.

The SBA loan programs that are offered for veteran and military businesses are created to support the growing community of military and business owners who make up about 5% of all small businesses. The Small Business Administration works to promote these businesses by offering their low SBA loan rates, specific SBA business loans created for military and veteran businesses and SBA loan programs and SBA lending services, offering flexible and helpful loans. The growth of the military and veteran business community has been largely helped by SBA small business loans and will continue to succeed with the support of SBA loans.

Contact the Small Business Administration for more information on SBA loans.