Wednesday, January 6, 2016

VA Small Business Loans: Here’s Where to Find Them

Determination. Discipline. Self-confidence. Leadership skills. These qualities are a part of every veteran’s military training experience. They’re the traits that allowed soldiers and marines to survive on the battlefield, equipped naval and air force servicemen to achieve their missions, and emboldened coast guards and reservists to keep our country safe. And as it turns out, they’re also characteristics that make for strong, successful entrepreneurs.

It’s no wonder, then, that nearly half of all returning World War II veterans went on to own or operate a business—a proud tradition that’s continued in generations since. In fact, as of the most recent census, there were 2.45 million veteran-owned businesses in the U.S., contributing over $1 trillion in sales to the country’s economic landscape.

As a new generation of veterans transition from active duty to their post-military service lives, there is a greater push than ever to provide opportunities for veterans interested in business ownership. Despite the financial hardships and funding challenges faced by all Americans in the wake of the 2008 financial crisis, there are now more resources and opportunities than ever before available for veterans in search of VA small business loans, business development tools, and other sources of financing.

Let’s review the best resources available to veterans looking for VA small business loans, business development assistance, and other veteran-owned small business financing.

Government-Backed VA Small Business Loans

Any discussion of resources available to veteran entrepreneurs needs to start with the wide variety of government resources provided by the Veterans Administration, the U.S. Small Business Administration, and other federal agencies, as these by far and away offer the most resources for accessing VA Small Business Loans.

In fact, in 2014 alone, the SBA supported $766 million in loan dollars from third-party lenders to assist over 2,300 veteran-owned businesses. While the SBA itself doesn’t directly lend money to veterans or any other business owners, the administration’s guarantee program makes lenders highly more likely to approve VA small business loans for entrepreneurs who might otherwise struggle to access debt financing.

Here’s how to access the VA and SBA-backed financing options for veteran-owned businesses.

Veteran Entrepreneur Portal

If you’re just beginning your search for financing and aren’t sure where to start, check out the Veteran Entrepreneur Portal. A product of the Department of Veterans Affairs and BusinessUSA, the VEP is an excellent starting point for veterans interested in opening a small business, expanding a company, or purchasing a franchise.

The goal of the VEP is to connect veterans with federal services for small business assistance, including business development resources, access to financing, and franchise opportunities. The portal even provides resources to help veteran small business owners access lucrative government contracting opportunities for their products or services.

Almost every resource you can imagine for veteran small business owners is available through the Veteran Entrepreneur portal, especially information about and access to VA small business loans. Spend some time there and familiarize yourself with the resources available. You might happen upon business opportunities you didn’t even know to look for!

Military Reservist Economic Injury Disaster Loan

We know that active duty military and reservists alike make tremendous sacrifices in answering their country’s call to combat. For reservists leaving behind a small business, the economic impact of being called into active duty can be particularly debilitating.

To meet the needs of current and veteran military reservists whose small businesses were impacted by their service, the Small Business Administration’s Military Reservist Economic Injury Disaster Loan (MREIDL) program offers low (4%) interest loans to help reservist-owned businesses get back on their feet.

The loan is available to veterans within one year of being released from active duty and allows for terms up to 30 years. However, keep in mind that the program requires collateral for loans over $50,000.

Obviously, this loan is only the right fit for a select category of military personnel. In addition to the above criteria, the SBA is required by law to determine that the business would be incapable of recovery without government intervention. You’ll need to look into other sources of funding and show that alternative sources of credit either aren’t available or would create a financial hardship.

VA Small Business Loans from Private Organizations

In addition to the various loan options available from the Veterans’ Administration, the Small Business Administration, and other government entities, there are a number of commercial and non-profit organization that also provide special services for veteran entrepreneurs. Here are a few additional options to explore:


StreetShares is an online auction marketplace that connects entrepreneurs directly with business loans from investors with an interest in small businesses. The company offers services to a wide range of entrepreneurs—but as a veteran-owned and -run business, the StreetShares team has a particular passion for veteran entrepreneurs.

To help veterans on their entrepreneurial journey, StreetShares offers a special Veterans Business Campaign that connects veteran business owners seeking funding with fellow comrades-in-arms to walk them through the ten-minute application process. The company even boasts funding approvals in as little as a few hours. If you’re looking for funding and need a helping hand, StreetShares is a great non-government resource.

Veterans Business Fund

Although not yet accepting applications, the Veterans Business Fund is an up-and-coming 501(c)(3) nonprofit aiming to be a resource for veterans seeking funding to open or expand a small business, or purchase a franchise business. The organization relies on donors to provide funding for loans with favorable terms to veterans—often with low or no interest.

VBF will offer loans only in conjunction with the business owner’s personal equity and the participation of an outside financial institution, so don’t count on this as your sole source of business funding. But do keep an eye on this no- or low-interest loan resource to supplement your funding.

Small Business Assistance for Veterans

Though we all know it takes money to make money, we also know it takes more than just money to make it as a successful entrepreneur. That’s why, in addition to the various VA small business loans, grants, and other funding opportunities available from both government agencies and private organizations, there are also a number of initiatives to help educate and empower veterans hoping to one day own their own businesses.

Whether you haven’t even gotten started or you’re looking to make the best use of your funding, check out some of these additional veteran-specific resources to help you along your entrepreneurial journey.

National Veterans Business Development Council

Veterans feel strongly about supporting other veterans. That’s the basic premise of the National Veterans Business Development Council, the only third-party non-profit agency that offers certifications for businesses owned by U.S. military veterans.

By getting your business certified through the NVBDC, you’ll gain access to sponsorships, marketing opportunities, entrepreneurship training, and more. The agency can even help you connect to lucrative business opportunities through corporate and federal supplier diversity programs, which account for up to $80 billion in small business revenue dollars annually.

Office of Veterans Business Development

Within the umbrella of the U.S. Small Business Administration, the Office of Veterans Business Development is charged with maximizing the availability of VA small business loans and business development resources for veterans, as well as Service-Disabled Veterans, Reserve Component Members, and their dependents or survivors.

Along with connecting veterans with SBA-sponsored borrowing opportunities, the OVBD serves as an advocate for all veteran entrepreneurs, working to create more opportunities and resources to help veterans transition to small business ownership.

Operation Boots to Business

Offered by the U.S. Small Business Administration (SBA) as a training track within the Department of Defense’s Transition Assistance Program (TAP), Operation Boots to Business is a two-step entrepreneurial training program designed to help recent veterans begin their careers as small business owners.

Combining a two-day classroom workshop with an eight-week online course, Boots to Business equips veterans across the country with much-needed education, mentorship, and other resources for the transition from military service to entrepreneurship, as well as information about SBA-backed VA small business loans.

Since its 2013 launch, the Boots to Business program has had over 20,000 military service members and their spouses participate. And because the courses are offered at various military bases across the country, Boots to Business is an especially useful resource for current active duty military planning for their next career after retirement or discharge.

SCORE Veterans Fast Launch Initiative

The SCORE foundation—a nonprofit dedicated to helping small businesses get off the ground—partnered with several corporate sponsors to create the Veterans Fast Launch Initiative. The goal of this privately funded program is to honor the service of military veterans by helping them transition from military life into careers as business owners.

Although the program doesn’t offer direct access to business financing, it does offer free business mentoring, free marketing and advertising products, free software, and free downloadable template documents that will help you prepare the necessary business plans and financial documentation you’ll need when applying for VA small business loans. It will also direct you towards veteran-friendly lenders.

Veteran Franchising Portal

For military veterans specifically interested in owning a franchise business, the Veteran Administration’s Veteran Franchising Portal is a wealth of franchise-specific resources. Through the portal, you can connect to franchise financing opportunities specifically for veterans, use the International Franchise Administration’s VetFran Directory to identify franchises with special veteran ownership opportunities, and gain access to educational tools and even scholarships for aspiring veteran franchise owners.

While this resource won’t cover all the questions you may have about business ownership, it’s a great starting point for your questions specific to franchising opportunities.

Veterans Business Outreach Centers

Operating 16 local centers in ten regions across the United States, Veterans Business Outreach is an SBA-funded program that offers business development services. Through its local centers, the program offers access to mentorship, a business development boot camp, and veteran and career counseling.

If you prefer a face-to-face approach to small business development as opposed to online research and connections, your local veteran business outreach center is a great resource. And the center’s one-on-one business coaches are a great low or no-cost alternative to expensive private consultants.

From government agencies to nonprofits to commercial institutions, and from VA small business loan opportunities to special grants for veteran business owners, business development initiatives, and more—each one of these veteran-specific organizations shares one common trait. Each one believes in the potential of veteran entrepreneurs and in the importance of helping veteran business owners succeed.

As a military service member, you applied your discipline, determination, and sense of purpose to protect the homeland and defend our freedom as a nation. Now, you have the opportunity to translate those skills into a successful second career as a small business owner. We thank you for your service, and we hope that these resources will help you in your entrepreneurial journey.

The post VA Small Business Loans: Here’s Where to Find Them appeared first on Fundera Ledger.

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