UniBank commits $5M to veteran lending

Staff Photo/Michael Novinson James Paulhus, president and CEO of Unibank for Savings, announced the bank will lend $5 million to veterans and their families through a new small business loan program.

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UniBank has committed to loaning $5 million to military service members, veterans and their families.

The Whitinsville-based bank said interest rates on small business loans to veterans will be 1.776 percent (after the year of America’s founding) for the first 12 months, well below current market rates of four to five percent.

Veterans will also earn interest of 1.776 percent for a year on deposits of up to $50,000, well above the market rate of 0.5 percent, according to James Paulhus, bank president and CEO.

“Talk is cheap,” said John Rainey, regional director of Clark University’s Small Business Development Center (SBDC). “UniBank has stepped up to the plate and is doing a wonderful job.”

UniBank will rely on Worcester-based Veterans Inc. to help identify veteran entrepreneurs looking to start or expand a business. The SBDC will provide counseling and technical assistance, Paulhus said.

Once the initial $5 million runs out, Paulhus said UniBank will invest more money into the veterans lending fund.

UniBank is one of 11 New England financial institutions – and the only one based in Central Massachusetts – that has pledged to increase the number of loans it makes to veterans by 5 percent annually for each of the next five years, according to Bob Nelson, Massachusetts director of the U.S. Small Business Association (SBA).

The SBA has also waived up-front guaranty fees on loans of up to $350,000 to small businesses owned by veterans, which could save borrowers up to $5,000, Nelson said.