Do you know the businesses veterans own generate around $1.2 trillion in annual receipts? This according to the Small Business Administration (SBA).
The revenue comes from the 2.5+ million businesses and the millions of people they employ in the U.S. And this has resulted in one in every 10 business being owned by veterans. But as more military servicemen and women finish their tours and enter the civilian world, they need resources to get them up and running. One of these resources is access to capital to fund their venture.
However, before you apply for a loan figure out why you need a veteran small business loan; get the loan requirements and documents in order; evaluate all of your options and fully review your loan agreement before you accept.
If you don’t have the necessary expertise to go through all the details of the loan and there is something you don’t understand ask for help. Ask the lender or find another source. Additionally, take the documents home, go over them again and sign the papers 24, 48 or even 72 hours later.
Here are 10 sources for small business loans for veterans along with how you can apply.
Business Loans for Veterans
SBA Express Loan Program
SBA’s Express Loan Program provides financing of up to $350,000. One of the best things about this program is that you will receive a response to your request within just 36 hours! It is this quick turnaround time that has made the program vastly popular among veterans.
How to Apply?
To apply, you will have to provide a variety of information, including your personal background, tax returns, credit report, and bank statement among other information. For a complete description of the application process, check SBA’s SOP 50 10 5(G) (PDF).
Some of the other loans you can get from the government include the SBA 7a loan program, SBA 504 loans, SBA Microloans, USDA Veteran and Minority Farmer Grant and others.
Connect2Capital
Connect2Capital offers loans to veterans who own small businesses. A non-profit lender, Connect2Capital provides loans in the range of $50,000 to $4 million. A key feature of the loan by the organization is the lower down payments that start as low as 10 percent.
How to Apply?
To get started, you need to provide information about your business, your financing needs and credit score, along with other details.
Hiver & Strivers
Many of the vets in the U.S. are graduates of military academies. The goal of Hivers & Strivers is to provide early stage investment to support startup companies founded by these graduates.
Most of the investors are themselves graduates of military academies and they want to help by investing in their ideas. Unlike the other firms in this list, Hiver & Strivers doesn’t provide a loan, but it helps with funding a venture.
If the firm finds your idea worthwhile, it invests in human and capital resources. This includes active involvement- investing time and experience to ensure the greatest chance for success. They will serve as advisors and board members to help open doors by offering their expertise and providing counsel.
The capital Hivers & Strivers invests typically is $250K to $1M in a single round.
How to Apply?
The application process involves submitting your idea and waiting for a response.
StreetShares
A peer-to-peer lending marketplace for small business loans, StreetShares was co-founded by Mark Rockefeller, an Air Force veteran who served in Iraq. The company has an auction-based funding model that connects entrepreneurs with investors. The StreetShares marketplace combines lowest bids into a single loan to reduce the borrower’s cost to the lowest possible rate. The platform is open to non-veteran small business owners as well, although about 60 percent of the loans listed are for veteran-owned businesses.
How to Apply?
StreetShares has a four-step process for funding businesses. You can apply for a loan in 10 minutes online, or call the company to understand the application process. Once you complete this step, you will instantly find out if you qualify. The next step is to submit all documents for verification purposes and build a business pitch. The loan gets the fund via auction on the StreetShares marketplace.
Veteran Entrepreneur Portal
The Veteran Entrepreneur Portal (VEP) is part of the Veterans Affairs Office of Small and Disadvantaged Business Utilization. The VEP connects veteran entrepreneurs to BusinessUSA and offers listings of small business loans for veterans. It also offers growth lessons, resources geared toward the veteran small business community, franchising opportunities and more.
How to Apply?
To access financing options, you need to fill out some basic information such as your location, financing needs, and the industry you operate in. Once you provide all the information, you will receive a recommendation of state and federal financing programs based on your answers.
Veterans Business Services
Veterans Business Services (VBS) connects veterans to financing and provides resources as well as knowledge to move in the right direction. This private consulting service has tie-ups with national SBA 7a Lenders — loan providers with government guarantees from the U.S. Small Business Administration — and other respected financial intermediaries to provide a range of financing options to veterans across the United States. VBS also helps veteran entrepreneurs develop a financing strategy to blend eligible and practical capital resources.
How to Apply?
Start the process by visiting the VBS site and provide information about your business interest, business plan and NAICS code.
Military Reservist Economic Injury Disaster Loan Program
The Military Reservist Economic Injury Disaster Loan program (MREIDL) is intended to provide for the necessary expenses that cannot be met when an essential employee has been summoned to active duty in their role as a military reservist. The purpose of these loans is not to cover lost income or lost profits. Moreover, the program offers loans at low-interest rates of four percent.
How to Apply?
For loans over $50,000, you need to show collateral. Although a loan isn’t typically declined for lack of collateral, the SBA requires borrowers to pledge collateral that is available. It’s also important to note that the filing period for small businesses to apply for the economic injury loan assistance program begins on the date the essential employee begins active duty and ends one year after the employee discharges.
You may apply directly to the SBA for assistance. The SBA will send an inspector to estimate the cost of your damage once you have completed and returned your loan application.
SmartBiz
SmartBiz is a San Francisco-based marketplace for online small business loans. According to SmartBiz, it makes it easy for veterans to access funds by making the application process simple and less time-consuming. This includes an application for an SBA-backed loan. It is ideal for veteran entrepreneurs looking to expand their business with the least expensive financing.
How to Apply?
To qualify, you should have a credit score of 600 or higher and report revenue between $50,000 and $5 million. You’ve to be in business for at least two years with no bankruptcies or foreclosures in the past three years. The pre-qualification process takes just five minutes and requires you to provide basic information. Once the process is complete, it takes about seven days before the funds reach your
Veteran Launch
Veteran Launch is an affiliate of OBDC Small Business Finance. This is a non-profit organization specializing in financing California veteran-owned businesses. The support includes financing, consulting and networking support.
The organization offers access to micro and small business term loans with low fees and competitive interest rates. Loans in the range of $25,000 to $250,000 are available with no prepayment penalty.
How to Apply?
To apply, you can give Veteran Launch a call, or simply fill out an online form. You will need to provide some basic information about your business.
Minnesota Reservist and Veteran Business Loan Program
The Minnesota Reservist and Veteran Business Loan Program provides business loans to firms that are affected when their employees are called to active military duty. It also offers business loans to veterans returning from active military duty and want to set up their own business.
Both types of loans provide one-time, interest-free sums of $5,000 to $20,000. The loan terms are 54 months, with no repayment for the first 18 months and equal monthly payments over the remaining 36 months.
How to Apply?
To be eligible for startup loans, your business should have 20 or fewer employees. You also need to have had less than $1 million in annual gross revenue in the preceding fiscal year.
Veterans who qualify under this program must have been:
- On active duty on or after September 11, 2001.
- Separated from service under honorable conditions after having been on active duty for at least 181 consecutive days or for the full period for which called to active duty (or if a disability incurred while on active duty).
Generally, it takes four to six weeks to finalize the application process and the funds to reach you.
Image: Depositphotos.com
Aira Bongco
It is now easier for veterans to create businesses because of these financing options. This is amazing.
ashish
Brilliant article. Many veterans may not have this kind of knowledge. I am sure they can also approach these new-age fintech companies like LendingKart for a business loan as the processing is pretty quick there and they also offer good interest rates.