Updated to include new information and clarify details.
) -- Throughout the height of the recession, U.S. veterans used the Small Business Administration's
Patriot Express Loans
to grow their businesses.
"As Independence Day arrives it is only natural for us to reflect on America's veterans -- men and women who have the leadership skills and experience to become successful entrepreneurs and small-business owners," SBA Administrator Karen Mills said in a statement on Wednesday.
"The impact of this program the last four years has meant thousands of veterans and their families have had the resources to pursue their dreams as entrepreneurs, and at the same time create jobs and drive economic growth at a critical time for our country," she said.
Derryl Caldwell, owner of DC Mad Hatter, an embroidery company, got a $50,000 line of credit from Harris Bank through the initiative in May 2010.
Caldwell, a U.S. Navy veteran, said without it he would not have had enough working capital as he became certified to be a federal contractor.
Besides selling embroidered items on Chicago's Navy Pier, DC's Mad Hatter has done work for President Barack Obama,
, Caldwell says.
"Being a veteran ... my viewpoint is I can take a bullet, I should be able to get a buck," he says. Caldwell says it took roughly two months from applying to actually getting the line of credit.
Patriot Express was launched June 28, 2007. Since its start, the SBA has extended $633 million in guaranteed loans to 7,560 veterans to start or expand small businesses, it says. The initiative expands on the more than $1.3 billion in loans the SBA guarantees annually for veterans.
The SBA announced in December that it was extending the 4-year-old initiative to veterans and military families for another three years.
The loan is based on the SBA Express program and offers the lowest interest rates for business loans (generally 2.25% to 4.75% above prime) and the highest guarantee -- up to 85% on the amount of the loan -- for veterans. It also includes such support mechanisms as counseling services through SBA partners including SCORE. Patriot Express loans are available for up to $500,000, the SBA says.
The loans, offered by participating SBA lenders and backed by the SBA, can be used for most business purposes, including startup, expansion, equipment purchases, working capital, inventory or business-occupied real estate purchases.
Since inception, the SBA has extended $633 million in SBA-guaranteed loans to 7.560 veterans to start or expand small businesses, it says. The initiative expands on the more than $1.3 billion in loans the SBA guarantees annually for veterans.
In the private-sector workforce, veterans are roughly 45% more likely than those without active-duty military experience to be self-employed, according to a recent study commissioned by the SBA's Office of Advocacy.
One in seven veterans are self-employed or small-business owners, according to the SBA. About 25% of veterans say they are interested in starting or buying their own business.
The SBA attributes it to leadership and management skills veterans learned during their active duty and reserve service that are ideally suited for success as an entrepreneur.
The number of self-employed people who claimed veteran status has been on the decline, though -- it was some 9% in 2009 vs. 12% in 2005 and 15% in 2000, according to most recent figures compiled by the SBA.
The decline is a result of the retiring of World War II, Korea and, to a lesser extent, Vietnam vets, according to an SBA spokesman.
--Written by Laurie Kulikowski in New York.
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