Veterans looking for business loans can have hindrances that other entrepreneurs don’t face – they may not have an established credit history, there could be possible difficulty in translating their military skills to the civilian world, and of course, they might find themselves with limited access to traditional financial networks. But veterans looking to start their own businesses have more of a leg up than they might imagine – the SBA’s Veterans Advantage Loan Program is one of many government-backed initiatives and state-level programs for veterans to thrive in the business world. If you’re a veteran but you’re not quite sure where to begin your journey to obtain a business loan for veterans, check out these programs and groups.
Program #1: SBA Veterans’ Advantage Loan Program
The SBA Veterans’ Advantage Loan Program offers some reduced fees and favorable loan terms for veterans. To be eligible, 51% of the company must be owned by one of the following groups:
- Active-duty military
- Current spouse of a veteran
- Honorably discharged military members,
- Widowed spouse of a service member (who died in the line of duty)
This specific program eliminates upfront guarantee fees, also called “g-fees,” for SBA Express loans up to $350,000. They also offer reduced fees on standard 7(a) loans depending on a veteran’s financial situation, how much money they’re asking to borrow, and more factors.
Program #2: Veteran-Owned Business Grants
Grants allow veteran entrepreneurs to access certain non-repayable funds, but the process of getting a grant can be harder than a loan. These grants can be offered by federal agencies, state governments, and private foundations, each with varying eligibility criteria and funding amounts – groups like Warrior Rising, Veteran Business Fund, Second Service Foundation, and more. Some grants focus on specific industries, while others target veterans with disabilities or those located in underserved communities.
Program #3: Military Veteran Loan Programs
Beyond the SBA Veterans’ Advantage Loan Program, several other government-backed initiatives cater to veteran entrepreneurs. The Department of Veterans Affairs (VA) offers the Veteran Readiness and Employment (VR&E) program – while it’s mostly focused on vocational training, it can also provide funding and support for veterans pursuing self-employment. To be eligible for VR&E though you must not have received a dishonorable discharge and have a service-connected disability rating of at least 10% from the VA. Many states also offer veteran-specific loan programs through their economic development agencies. These programs frequently feature lower interest rates, extended repayment terms, or even forgivable loan components – but you’ll need to visit your individual state’s website to investigate further.
Program #4: Online Lenders and Alternative Options
In addition to traditional and government-backed avenues, veteran entrepreneurs have access to online lenders and nonprofit organizations. For those who need quick access to capital, often online lenders can provide streamlined application processes and faster funding, but it could also come with higher interest rates. Some online platforms specifically target veteran-owned businesses. Nonprofit organizations, such as community development financial institutions (CDFIs) and veteran-focused nonprofits, can also provide microloans and business advisory services.
Program #5: Networking and Support Groups for Veteran Entrepreneurs
Connecting with veteran-focused business networks like the Veterans in Business Network gives veterans the opportunity to talk shop with those who are in the same position they are. These networks or support groups offer mentorship, guidance, and peer support from fellow veterans who understand the unique challenges of transitioning from military service to business ownership. They also, in some cases, give access to potential investors, partners, and customers, especially if a veteran meets a connection in their market of choice.
Making Businesses Work for Veterans
Even if it might seem like a hard market, aspiring veteran business owners have access to an array of options, ranging from SBA-backed programs with reduced fees to online lenders and nonprofit organizations offering tailored financing. On top of financial resources, veterans have social resources as well – specific networks and support groups that improve their chances of overall success. All in all, the business world isn’t so scary for a veteran, if you know where to look.
