To illustrate, while the national unemployment rate has fallen to 6.7 percent, the unemployment rate for disabled Americans remains at a staggering 12.8 percent. Keep in mind this includes only the disabled who are willing and able to work.
While federal law prohibits discrimination against disabled candidates who can otherwise do the job, it’s clear employers don’t always play ball. That may be one reason disabled Americans have increasingly turned to starting a business as a solution to their career and financial dilemmas. According to the Small Business Administration (SBA), the disabled are 50 percent more likely than the non-disabled to venture out on their own.
Of course, not everyone – especially those with serious health issues – has a few hundred thousand dollars laying around to pump into a new business. However, the SBA offers financial resources for such individuals to get them off the ground. Here are a few.
Patriot Express Loan
The SBA allows lenders with Patriot Express authority to offer low-interest loans to certain military personnel and veterans. These include:
- Active-duty personnel eligible for the Transition Assistance Program
- National Guard members
- The spouses of any of the above
- Widows of service members or veterans who died during service or of a service-connected disability
Patriot Express loans can be used for startup, expansion, equipment purchases, permanent working capital and inventory or business-occupied real estate. Interest rates are generally 2.25-4.75 percent above prime, which are the SBA’s lowest rates for business loans. Loans can be taken out for as much as $500,000.
Only the federal government could go from a name as inspiring as Patriot Express to a dud like “7(a).” Regardless, this is an option if you don’t qualify for the former.
A 7(a) loan allows business owners to finance mostly the same items as a Patriot Express loan. You may be able to secure up to $5 million. The fees are reasonable and your interest rate will depend on your deal with the lender.
Note that a 7(a) loan is not specifically designed for disabled entrepreneurs. That’s because the SBA doesn’t have a program for the disabled at large. In other words, if you or your spouse are not or were not in the U.S. Military, you’ll have to play by the same rules as everyone else.
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Other options you can try, although not specifically for the disabled, include microloans and CDC/504 loans. Yes, the SBA managed to outdo the 7(a) with CDC/504 in non-descripitive names.
A microloan is just as it sounds: a small loan. You may secure up to $50,000 for items such as equipment, furniture, inventory, working capital and more. Interest rates are generally in the eight to 13 percent range.
A CDC/504 loan is fairly limited in scope. While you may borrow up to $5.5 million at rates pegged a bit above U.S. Treasuries, it’s only good for financing fixed assets and you cannot have sufficient business or personal funds to do so on your own. Also, you need relevant management experience and a feasible business plan. There are plenty of other what-ifs, as well, so it’s safe to say this should be plan Z on your list.