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SBA Program Encourages Returning Veterans to Launch Businesses

The wars in Iraq and Afghanistan are controversial to be sure, but they are also creating a whole new generation of military veterans.

We had a small influx of veterans during the first Gulf War but the current war has created hundreds of thousands of combat veterans.

Coupling the new problems facing returning veterans to those of the thousands of veterans of all wars, and the federal government needed to create a financial program to assist those who wanted to begin a business.

On July 1, the Patriot Express Pilot Program, which addresses this concern, began. This pilot program, managed through the Small Business Administration, provides services to veterans and members of the military community.

The target audience is as follows:

– Veterans;

– Service-disabled veterans;

– Active-duty service members eligible for the military’s Transition Assistance Program;

– Reservists and National Guard members;

– Current spouses of any of the above; and

– The widowed spouse of a service member or veteran who died during service or of a service-connected disability.

This program creates an amazing opportunity for eligible personnel in need of a financial boost to get their business going.

Loans may go up to $500,000 and qualify for SBA’s maximum guaranty of up to 85 percent for loans of $150,000 or less, and up to 75 percent for loans above $150,000 to $500,000. For loans above $350,000, lenders will be required to take all collateral available.

As with the current SBA Express loans, Patriot Express will use a streamlined, centralized and expedited SBA loan process.

Interest rates for Patriot Express loans will range between 2.25 percent to 4.75 percent over prime depending upon the size and maturity of the loan.

The SBA reports that 4 million veterans own small businesses, and 13 percent of reservists in the labor market are small-business owners.

In spite of those figures, research shows that only 22 percent of service members leaving active duty consider starting a business.

In addition to the loan provisions, Patriot Express also offers help to veterans in the form of business plan writing, management training, contracting opportunities, export assistance and equity financing matching venture capitalists with their small business.

Any lender approved for SBA Express or the Preferred Lender Program may make Patriot Express loans.

“This program provides financing opportunities for Americans, who by virtue of their service and sacrifice, deserve special consideration. By guaranteeing a significant portion of the loan, the SBA encourages loans to this group with reduced rates, preferred underwriting conditions, expedited service, longer repayment terms and limited collateral,” said Frank Hutchins, vice president and senior loan advisor, Community National Bank, a small business lending leader.

In other North County news:

– San Marcos has a major mixed-use development winding its way through the public hearing and approval process. The San Marcos Creekwalk project is more than 230 acres of everything but the kitchen sink. The breakdown shows more than 1 million square feet of retail, 589,000 square feet of office and more than 2,300 homes. During July, the planning commission and then the City Council will weigh in with considerations.

– Carlsbad seems to be a hot spot for hotel building, buying and selling. There are three new hotels opening in Carlsbad this year, the largest being the 700-room and time share Sheraton owned by Grand Pacific Resorts Inc. The two others include the Hampton Inn Carlsbad North opening in October, and the Homewood Suites of Carlsbad, both Hilton hotels. Both the top resorts in the city were sold this year. The Four Seasons Resort Aviara was sold to Broadreach Capital Partners in Palo Alto. The La Costa Resort and Spa was sold this month to a private partnership called Whitehall Street Real Estate, run by the top-drawer investment banker Goldman, Sachs & Co. The management of both facilities remains the same.

Carlsbad, the golf manufacturing capital of the universe, is rapidly becoming the fitness center of the world. PureFitness opened its 70,000-square-foot health facility last year; 24-Hour Fitness is about to open its 60,000-square-foot corporate headquarters and gymnasium facility in August. On June 20, the Planning Commission approved a 100,000-square-foot two-story health club on the grounds of the Olympic Resort Hotel.


Ted Owen is president and CEO of the Carlsbad Chamber of Commerce.

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