Veteran-owned businesses have long been a key part of the American economic engine. Following World War II, an incredible 49.7 percent of returning veterans went on to start their own business. Today, according to the most recent census data, there are 2.45 million veteran-owned businesses in the United States, contributing $ 1.22 trillion in sales each year to the national economy.
These numbers show how important veteran entrepreneurs are to the American economy and society.
If you’re a veteran running or planning to start a business, understand that having sufficient capital on hand is crucial to the success of your company. Unfortunately, challenges to obtaining financing have been among the reasons why fewer veterans are starting businesses today than after Word War II.
Fortunately, there are still many resources for veterans to fund their venture:
1. Small Business Administration (SBA)
The SBA has a wealth of resources available to help veterans start and grow a business. The Office of Veterans Business Development supports and empowers existing and aspiring veteran entrepreneurs and military spouses through a variety of training programs, like Boots to Business and financial services.
The SBA also offers financing help to veterans through the following programs and services:
- SBA Veterans Advantage Guaranteed Loans: Along with small business loans, the SBA offers training courses and counseling to ensure military veterans or their spouses have proper support. Loans of $ 150,000 or less have no guaranty fee, as the SBA hopes to remove some of the stress involved with borrowing to start a business. Larger loans for eligible veterans and spouses usually have low guarantee fees. The business must be 51 percent owned by an eligible active military member, veteran or military spouse.
- SBA Express Loans: As of 2015, there is no upfront borrower fee for eligible veterans and military spouses on loans up to $ 35,000.
- Leveraging Information and Networks to Access Capital (LINC): Think of LINC as like a matchmaking service for obtaining small business loans. Search on the site, and you’ll be connected with SBA-approved non-profit lenders.
2. U.S. Department of Veteran Affairs
Like the SBA Office of Veterans Business Development, the Department of Veteran Affairs is a comprehensive resource for veteran entrepreneurs. To help streamline the financing process, the department has created the Veteran Entrepreneur Portal (VEP), which can help you quickly identify financing resources for your business and then apply.
In general, the U.S. Department of Veteran Affairs is a great starting point for looking for financing. The department keeps updated and relevant information for veterans and can guide you go suitable sources of funding for your small business.
3. International Franchise Association (IFA) — VetFran(R)
The IFA has what’s called the VetFran(R) program, which is designed to help veterans start their own business. To date, more than 600 franchises participate in the program, including famous brands like Liberty Tax Service, Sport Clips, Firehouse Subs and Jiffy Lube.
While these aren’t traditional business loans for veterans, the VetFran(R) program offers financial incentive for veterans to launch a franchise. All the companies listed make it less expensive for veteran entrepreneurs to open up a franchise.
For instance, UPS participates in the program and offers veterans $ 10,000 off the franchise fee, as well as 50 percent off the initial application fee. 7-Eleven, another participant in the VetFran(R) program, offers up to 20 percent off the initial franchise fee, up to 65 percent financing through 7-Eleven and even special financing offers.
4. Organizations and resources for veteran entrepreneurs
As a veteran, it’s vital to use all the resources available to you to find financing for your business. In addition to lenders, know that there are a lot of support organizations and resource centers out there for you.
The following resource centers and organizations are quite reputable:
5. Lenders who focus on veteran entrepreneurs
Since there are so many lenders operating in the small business space, it can be difficult to know which ones will offer you fair terms and rates. Thankfully, there are a number reputable lenders out there who work specifically to provide small business loans for veterans.
While there still needs to be increased access to funding for veteran-entrepreneurs, veteran-focused lenders popping up more than ever.
6. Specialized small business loans for veterans
Given your situation, you may also qualify for specialized small business loans for veterans.
One of the most common specialized loans for veterans is the Military Reservist Economic Injury Disaster Loan. This loan helps active-duty military personnel and reservists who have to leave a business behind when their country calls. The Military Reservist Economic Injury Disaster Loan is a low-interest loan that can help you run your business smoothly again when you return.
If you’re looking to fund an agricultural operation, research the USDA Veteran and Minority Farmer Grant. Run by the Department of Agriculture, this grant program aims to bring traditionally underserved people into farming through training and technical and financial assistance. Awards for veteran farmers vary by state.
Get the funding you need to succeed
While securing funding a veteran can feel overwhelming, know there are ton of resources out there to help you get started and secure the funding you need.
You’ve made sacrifices for our country, so take advantage of all that’s available to you, especially those resources designed specifically for veterans. Funding challenges shouldn’t prevent you from turning your business idea into a wonderful success.
(By Meredith Wood)