Maybe you have already or are about to leave military service. But the question arises, what to do now?
Maybe this would be an excellent time to start a small business. As a veteran, you have some strong advantages in attaining a veteran small business loan. Both the Veteran’s Administration and the Small Business Administration will be your allies.
Or maybe you are a veteran who already owns a business but you need financing for expansion purposes or something needed to grow your business.
There are things you need to know about the veteran small business loan process. It will help you be prepared to get that loan you need to start your entrepreneur journey.
How The Small Business Administration Can Help You
Most people know that the SBA (Small Business Administration) will guarantee small business loans for eligible people. But when it comes to veterans, the SBA offers even more.
Office of Veterans Business Development
This office within the SBA is designed to aid veterans in their entrepreneurial dreams. They offer all this:
Veteran Entrepreneurial Training
The SBA offers several courses to help veterans enter the world of business. They range from online courses to in the classroom training.
- Boots To Business is a part of the Department of Defense’s Transition Assistance Program (TAP). It is available at various military installations and is for those who are soon to be veterans. It consists of a 2 day classroom course followed by 8 weeks of online courses.
- Boots To Business Reboot is the same as the above only for those who have already left military service.
- V-Wise is an initiative to train female military members and spouses of male military members on becoming entrepreneurs. It can be done online and is a great program.
- The National Center For Veteran Institute For Procurement is a training program for veteran owned small businesses showing how to have success at getting federal contracts.
How The SBA Helps With Veteran Loans
The Small Business Administration has the Veterans Advantage lending program. The list of person who must own at least 51% of the business are:
- Veterans – unless dishonorably discharged
- Active duty who are enrolled and participating in the Transition Assistance Program (TAP)
- National Guard and Reserve members
- Current or widowed (who died while in service or from a service connected disability) spouse of any veteran, active duty, National Guard or Reserve member.
These loans are express and
- There are no up front fees
- There is a 2 page application and expedited approval
- The 3% up front guarantee fee is waived for Veteran borrowers only
The up front fees were dropped as a result of the Veteran’s Entrepreneurship Act of 2015.
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Preparation For Getting Funding
You do not just get loan approval without being prepared. I am going to summarize what you need for a veteran small business loan…
You need a well written business plan
You need a detailed business plan that will include:
- An in depth explanation of the product or service your business will offer.
- A detailed look at the market your product or service will help and how you plan on marketing to them.
- How you will use the money you are funded with.
- And much more… This article from Forbes explains it perfectly.
Keep in mind that if you are a disabled veteran, you should include within your marketing strategy the Service-Disabled Veteran-Owned Small Business Concern program (SDVOSBC) which helps disabled veteran owned companies a strong advantage in obtaining government contracts up to $5,000,000.
Complete a SBA Veteran Small Business Loan Application
Don’t let the process of filling out the application for a small business loan through the SBA scare you off. The SBA itself does not make the loan, they are your advocate.
There are SBA counselors prepared to help veterans through the process of applying. What you will need is:
- Your business plan
- The discharge paperwork from your days in service
- All required info for standard loan applications. That would include income verification, contact info as well as, assets and debts. Your personal credit will also be checked.
You just complete the application and submit it. It is then time to find a lender. Your SBA counselor will surely have a list of approved lenders.
Various Lenders Who Favor Veteran Small Business Loans
You should check any and all sources for your small business loan. Your bank may have a good opportunity, but they must be approved by the SBA to have their assistance and backing.
I did some research and found lenders.
OnDeck
OnDeck is an online lender that offers term loans and lines of credit. Term loans can be anywhere from $5,000 to $500,000. The APRs can be anywhere from 9 to 99%. Repayment is either daily or weekly.
You can see the pros and cons of OnDeck here.
StreetShares
Here is a great crowdfunding resource that reacts favorably with veterans becoming entrepreneurs. Learn what all StreetShares can do for you at this link. If you have bad credit, this may be your best choice.
Accion
Accion is a great choice for veterans who are in their business start up mode. Accion has partnered with Syracuse University’s Institute for Veteran and Military Families to offer programs and services. This non-profit can probably help you. Visit the Accion website.
Those are just a few. There are many more; you can go through the reference links below and discover many.
The Military Reservist Economic Injury Disaster Loan
For those who answer the call to duty by being in the National Guard or Reserves, and their business suffers because of the call up, MREIDL comes to the rescue. To help the entrepreneur and veteran back on the path of business success, this program gives low 4% interest loans and up to 30 years to pay it back.
Loans over $50,000 do require collateral.
Final Thoughts
While it may seem monotonous going through the hurdles to get a small business loan, it is well worth it by following the path I laid out for you here.
If you have been through the process and would like to offer any other advice, I am sure it will be appreciated. And, if you have any questions, please post them too and we will get you an answer.
Join the other 2+ million veterans who have become entrepreneurs. You will be happy you did!
Thanks for coming by and please share this with your fellow soldiers.
Chuck Holmes
Former Army Major (resigned)
Publisher, Part-Time-Commander.com
Email: mrchuckholmes@gmail.com
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It is important to read reviews online on different lenders to learn about their application requirements, speed of approval and funding, acceptance rate, costs, repayment terms, and minimum qualifications. Some online lenders are probably going to be more lenient towards your credit score compared to traditional bank lenders. If you understand the minimum qualifications and likelihood of approval, you’ll know which lenders you shouldn’t waste your time on.