When you’re ready to finance your business, there are several ways to approach it. In our “Ultimate Guide for Veteran-owned Small Businesses,” we outline the three main types: self-financing, equity, or debt financing. And debt financing is the route many companies take once they’re established businesses with some revenue under their belts.
As a reminder, debt financing can include both secured and unsecured loans and lines of credit. It’s for the veteran business owners that need lines of credit that we’ve specifically created the Patriot Express Line of Credit.
Previously, the SBA offered the Patriot Express Loan but it expired in 2013, which was unfortunate. It was a very popular program that funded $663 million in SBA-guaranteed loans. Veterans could get large loans at very low interest rates and low fees.
Fortunately, a few other programs exist to help veteran business owners get funding. The SBA has a similar program called the SBA Express Loan Program. Additionaly, StreetShares has created the Patriot Express Line of Credit, which is not associated with the SBA.
How It Works
Our Patriot Express Line of Credit works like any other business line of credit would. Let’s use a personal credit card as a similar example. Depending on your needs and credit history, your lender will grant you access to a specific amount of funds. Lines of credit work similarly.
In fact, lines of credit are often referred to as “revolving” because they can be tapped into repeatedly. Also, lines of credit do not charge interest unless the funds are tapped into.
For example, if you have access to a $50,000 line of credit and you only need to take out $10,000, you’ll still have access to the remaining $40,000. If you pay back the $10,000, you’ll have access to the entire $50,000 without having to reapply.
Businesses take out a line of credit for many reasons. Some businesses may be cyclical, seasonal, may need it as working capital or to make payroll.
Scale Small Business Growth with a Line of Credit
Many companies like MN8 Foxfire/LumAware, become profitable after a few years but are also wanting to increase growth. (MN8 Foxfire creates illuminating products that increase visibility for firefighters while in dark buildings filled with smoke and fire.)
Even though they had steady orders coming through, MN8 Foxfire’s buyers were paying them at a slow pace and all of their cash was tied up in certain places of the business.
At times Zachary Green, CEO and co-founder, wasn’t sure if they could make payroll due to the lag. “It’s very difficult to grow and be profitable at the same time and that’s where StreetShares came in,” he said.
Zachary has taken out a Patriot Express Line of Credit several times through StreetShares. He’s used it for pay his employees while waiting on payment for an order to come through. He’s drawn on his line of credit to pay for inventory upfront when he knew he had a purchase order to fill.
As a Marine Corps Veteran, Zachary applies many of his military experiences to the business world. “In battle, you want to make sure your supply can keep up with the attack. That’s basically how we’ve been able to work with StreetShares,” he said. “We’re using a line of credit as our supply so that we’re on the front line of war. We want to make sure we’ve got enough supply to keep up with the demand. StreetShares has been a great partner. We’ve taken out four lines of credit so far and look forward to working with them more in the future.”
The Patriot Express Line of Credit is available to veterans, active duty military or military spouses who have been in business for a year or more and make at least $25,000 in revenue. These business owners can get access for up to $100,000 through the Patriot Express Line of Credit. Click here to qualify for free or contact us to learn more.