Finding the Best Small Business Resources for Veterans
People often confuse Memorial Day and Veterans Day. Memorial Day, which takes place at the end of May, honors members of the military who have sacrificed their lives in combat. On November 11, Veterans Day celebrates members of the armed services who are still among us. The holiday, formalized in 1919, began following the end of WWI, which ended a century ago on November 11, 1918.
Many former service men and women are entrepreneurs. In fact, veteran-owned firms represent 9% of all U.S. firms, according to the U.S. Census Bureau. Of the 26 million veterans in the United States, nearly 2.5 million vets own small businesses, and those companies employ nearly 6 million workers.
To help servicemen and women make the transition into civilian life, the Small Business Administration (SBA) offers a broad range of support for vets opting to go into business for themselves. The SBA provides workshops that offer assistance in writing business plans and also connects veterans with mentorship and training programs.
The Operation Boots to Business program guides veterans through the process of launching and growing an enterprise. Additionally, the Office of Veterans Business Development (OVBD) is devoted to promoting entrepreneurship opportunities for veterans, service-disabled vets, reservists, active-duty service men and women, and their dependents or survivors. Visit the SBA site to find the nearest OVBD center.
Government agencies and large corporations set goals to include veteran-owned businesses in their supply chains. The federal government encourages veteran-owned businesses to register with the VA’s Center for Veterans Enterprise and its System for Award Management that veterans can use to get government contracts. Further, the average American consumer typically prefers to purchase from a veteran-owned business, according to Buyveteran.com, which publishes an online directory that veteran-owned companies can join.
A frequent challenge for veterans – just like it is for any entrepreneur – is finding funding to launch and grow a business. Loan programs for veterans require that the applicant (veteran, spouse or widowed spouse) own 51% of the business. While the SBA offers several loan-guarantee programs, it does not directly lend money. Rather, its authorized lending partners (banks and other lenders) provide capital backed by the SBA’s government guarantee to repay a portion of the loan if a company were to default. By mitigating the lending institution’s exposure to risk, the SBA makes it more palatable to issue loans – sometimes to borrowers who might not be able to qualify for traditional term loans.
The Small Business Administration 7(a) program offers attractive loans for veterans with good credit. The SBA Express Loan program provides loans up to $350,000 with a repayment period of up to seven years. This program is also available with expedited review from the SBA (a decision response may be given in 36 hours or less). Veteran business owners who apply through the Express Loan program also benefit from the SBA Veterans Advantage, meaning all upfront fees are waived if the loan application is approved. For these loans, lenders require borrowers to have good-to-exceptional credit.
SBA Community Advantage Loans can help veteran-owned businesses in areas that are not well-served by major or regional. CA Loans are offered up to $250,000 with terms up to 10 to 25 years, and borrowers have access to management and technical assistance. Like any other borrower, a veteran in search of capital must demonstrate a history of creditworthiness and the viability of their business idea to qualify for funding.
Military Economic Injury Loans provide funding to help eligible businesses meet ordinary and necessary operating expenses incurred because an essential employee was called-up to active duty as a military reservist. If you own a company that has experienced financial distress as a result of your active duty service, this program offers low interest loans that can assist in recovery from economic loss. This funding is available to veterans within one year of being released from active duty and allows for terms up to 30 years.
Service members transitioning back to civilian life typically possess the training, experience and leadership skills that enable them to start businesses and create jobs. Members of the military are team players who have learned to work together to get the job done. These are factors that serve them well in launching and growing business. Fortunately, the SBA, the Veterans Administration and other entities are willing to help them pursue their entrepreneurial dreams.
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