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Nov 23, 2019

Small Business Loans for Veterans: Best Options for 2019, Nov 23, 2019

Small Business Loans for Veterans: Best Options for 2019
Many people who served in the nation’s military embark on new careers as small business owners. If you’re one of these veteran entrepreneurs, there’s good news: there are programs meant to help you start and grow your business.

These programs offer different forms of assistance, including low-cost financing. Here’s a list of options:

Grants

StreetShares’ Veteran Small Business Award

Launched in 2016,  the StreetShares Foundation was founded by veterans who sought to educate, support, and inspire American veteran business owners.
Each month, the StreetShares’ Veteran Small Business Award awards three veteran business owners up to $15,000 in business grants. Each winner receives educational resources and mentorship from business experts across the nation.
To apply you must download their featured ebook, write a 300 word summary, and submit a two-minute YouTube video about your business. To learn more about qualifying, click here.

The Global Good Fund Veterans Leadership Program

The Global Good Fund and the Smithfield Foundation launched the Veterans Leadership Program to support “veteran entrepreneurs.” The eight-month program offers “personalized leadership development and executive mentoring” to military veterans looking to build careers as entrepreneurs. The program includes a $10,000 leadership development grant. To learn more about Veterans Leadership Program, click here.

SBA Loans

SBA Veterans Advantage Lending

The U.S. Small Business Administration’s Veterans Advantage program offers veterans and other eligible servicemen loans of up to $350,000, with substantial fee reductions on major SBA loan programs, such as the SBA 7(a) and Express Loans. To qualify for the fee reduction you must own at least 51% of the business. Veterans who qualify include:
  • Honorably discharged veteran
  • Service-disabled veteran
  • Active-duty military service member eligible for the Transition Assistance Program (TAP)
  • Active reservist and/or National Guard member
  • Current spouse of any veteran, active duty service member, reservist, National Guard member
  • Widowed spouse of a service member who died while in service or as a result of a service-connected disability

Military Reservist Economic Injury Disaster Loan

If you are called into combat while running your small business, you may be able to apply for the Military Reservist Economic Injury Disaster Loan (MREIDL) from the SBA. This benefit features a 4% interest rate and a maximum loan terms of up to 30 years. MREIDLs are intended only to provide the amount of working capital needed by a small business to pay its necessary obligations as they mature until operations return to normal after the employee is released from active military duty. There are program limitations, as the MREDIL page explains: “The purpose of these loans is not to cover lost income or profits. MREIDL funds cannot be used to take the place of regular commercial debt, to refinance long-term debt or to expand the business.”
Loans of over $50,000 also require collateral.

Line of Credit

A line of credit is a smart option for veteran business owners who need flexible access to business financing. Many small business owners have turned to traditional banks for this type of financing, although the application process usually involves stringent requirements. The good news is  online business lenders now also offer business lines of credit that require little or no paperwork. The approval process can take less than a day.

Factoring

If you have invoices with net terms of over 30 days, you might understand the frustrations of scrambling to find capital to cover overhead expenses while waiting for your clients to send their payments. Invoice factoring solves for this problem by advancing you a percentage of an unpaid invoice (typically 85% to 90%). Once your client pays the invoice in full, the factor then pays you the remainder of the invoice minus a small fee. As a veteran business owner, factoring invoices is a great way to control your cash flow without taking on debt.

Additional Resources

National

The National Veteran-Owned Business Association

The National Veteran-Owned Business Administration,  or NaVOBA, aims to create corporate contracting opportunities for veteran business owners. The non-profit provides networking and training opportunities as well as a nationally recognized certification program that allows corporations to source the best veteran-owned businesses.

Veteran Business Outreach Centers

The SBA set up Veteran Business Outreach Centers that offer  comprehensive education programs to veteran entrepreneurs. The program includes mentorship, counseling, and business training for veterans or military spouses. The Veteran Business Outreach Center is offered in nearly every state.

American Corporate Partners

Over 20,000 veterans have participated with American Corporate Partners (ACP), a national nonprofit organization which seeks to help returning veterans transitioning to civilian life.  ACP offers mentorship from leaders of Fortune 500 companies, networking, and online career advice to thousands of veterans across the country. Recently, the ACP has expanded its services beyond corporate mentorship programs by offering mentoring programs for women veterans and citizens interested in becoming mentors.

Entrepreneurship Bootcamp for Veterans

The Entrepreneurship Bootcamp for Veterans, or EBV, Foundation gives post 9/11 veterans with service-related disabilities extensive training in entrepreneurship and business management. Even after completing the program, graduates of EBV receive mentorship, promotion, and small grants to start their business. Since its inception the EBV Foundation has given $414,850 in business grants to 230 graduates. Click here to apply.

Service-Disabled Veteran-Owned Small Businesses Program

Another excellent program is the SBA’s Service-Disabled Veteran-Owned Small Businesses (SDVOSBC) Program. Each year, the federal government awards three percent of all federal contracting dollars to service-disabled veteran-owned small businesses. This allows your business eligible to compete for set-aside contracts. Set-aside contracts were designed to limit competition for small businesses to compete and win federal contracts. To learn more about set-aside contracts, click here. For more information about SDVOSBC, click here.

Regional

West Coast

Nor-Cal FDC and StreetShares
Nor-Cal FDC provides financial solutions to millions of small businesses in California, and has partnered with StreetShares to make access to capital fast and easy. Nor-Cal FDC offers Lines of Credit and Term Loans up to $150,000 with three to 36 month terms. Click here to apply and learn more.

Northeast

Arms 2 Artisans Foundation
Founded by a veteran who runs a successful brewery in New Jersey, the Arms 2 Artisans Foundation trains post-9/11 veterans to work in artisanal fields such as brewing, hard cider, coffee, and woodworking. Selected applicants will work 30 hours per week learning brewing and career skills and will earn a weekly stipend of a few hundred dollars. Check out their featured story in Forbes here.
Syracuse University Institute of Veterans and Military Families
The IVMF has trained and educated thousands of veterans and their families in education, career, and life skills with their world-class programs since the 1920s. With over 70 professional staff members, the IVMF is a premier institute for veterans of all ages seeking additional work support and training. Click here to learn more.

Mid-West

Targeted Small Business Program
This program is designed to help service-disabled veteran business owners overcome the growth challenges of running a small business. Certification benefits include invitations to TSB networking events, promotion of business, the ability to access non-competitive bid opportunities, and more. The TSB also offers loans to qualified small Iowan businesses looking to grow or start their business through the Iowa Center for Economic Success of up to $50,000. Learn more here

South

PeopleFund
PeopleFund is a nonprofit lender and certified Community Development Financial Institution that offers loans and educational training to small businesses, start-ups, and nonprofit organizations across the state of Texas. They offer business financing up to $350,000 with terms up to 7 years, and Veteran business owners receive special interest rates. Click here to apply.  
Texas Veterans Commission, Veteran Entrepreneur Program
The Veteran Entrepreneur Program (VEP) is an amazing resource for any Texan veteran entrepreneur. VEP offers business education and skills training, personalized business assistance, and a Letter of Verification which can help save your business hundreds of dollars upon incorporating your business in the state of Texas. Find out more here.
This article was first published on May 21, 2018. It was updated on October 2, 2018.

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Disclaimer

The information and insights in this blog post are provided for educational purposes only, and do not constitute financial advice from BlueVine. Please consult your financial advisor before making any business financing decision. For information about BlueVine products and services, please visit the BlueVine FAQ page.

This article was first published on October 2, 2018. It was updated on
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