How has military life been for you? The joy that comes with serving your country is just out of the world. However, don’t let your military service keep you from achieving your dreams of having your own business.
You can take advantage of start-up business loans for veterans, which will give you the financial assistance that you need to make your dream come true. This is a smart and fiscally responsible way of doing things.
By providing start-up loans for veterans, the government has invested its resources in helping these individuals achieve success through small businesses. This comes in handy, for people passionate about bettering their lives, and that of their community.
This article covers all about start-up business loans. We’ll talk about what they are, where to find them, the qualification requirements, and their pros and cons. But first, take a look at the top lenders.
The business loans for veterans help to provide the funding that is needed to get a business started. The government will allow military service people to take out these loans without having small amounts of money upfront.
You can qualify for startup business loans if you have served in active duty and meet the criteria established by the government.
The loans can be taken out based on several factors, including the amount needed for your capital investment and your credit history.
Once you apply for the loan, then the government will process it. While most people are approved in less than a week, there is no guarantee that you will be approved immediately due to your situation and past credit history.
If you qualify for startup business loans, then the money can be released to you within as little as three days in some cases. When many people are struggling financially, this is the type of help that can get you back on your feet again.
If you are a veteran, then you probably qualify for government loan programs. However, many people do not realize that they may be eligible to take these loans out because they assume that the only way they can get assistance is through the military itself.
This is not necessarily the case! You can easily access small business loans for veterans by working with civilian lenders who are willing to work with your circumstances.
You can qualify for government grants and loans if you meet the right criteria, like being part of a low-income household or having small amounts of money in the bank.
Different lenders have set requirements for qualifying for start-up business loans. Generally, you must be a legal resident of the United States aged 18 years and above.
It is necessary that you have served during wartime in active duty and that your small business will serve a public good. If you are an entrepreneur, then this is one of the better ways that you can get the money that you need to keep your business going.
You must also have been honorably discharged from the military to qualify. Spouse or guardians of active-duty service members are also eligible for the loan. Spouses and guardians of those who died in the line of duty can also apply.
You have to fill out an application and then the money will be available in three days or less. This is a fast way of qualifying for financing, which can help your business get off on the right foot.
There are many types of start-up business loans available for veterans. Some of them can be very beneficial, while others may not give you as much value in comparison to what you’re paying back.
The available loan options include;
Small business Administration loans are issued by the US Government, but indirectly. The Government does this by guaranteeing loans from active lenders including non-profit Community Development Financial Institutions (CDFIs), banks, and credit unions.
You, therefore, should make sure your chosen lending institution is approved by the SBA to offer the said loans, generally revolving around zero-lender and borrower discrimination.
Please note that apart from the lender requirements, you must also meet the general SBA requirements. you, therefore want to take your time and shop around for the right loan product – one that conforms with your financial goals.
The common SBA. loan programs include 7(a) loans, SBA express loans, SBA microloans, and 504 CDC loans.
Initially, you could borrow up to $1 million with SBA express loan program. However, effective October 1, 2021, you’ll only borrow up to $500,000.
SBA loans are accompanied by a 2 – 3% waiver for veterans and their spouses or guardians.
These are revolving loans, like typical credit cards. You’ll be assigned a borrowing limit you cannot exceed, usually up to $50,000.
Business credit cards are best for small business purchases. The good thing about them is you only pay interest on the funds withdrawn. Using a business credit card is an excellent way to conserve the business cash flow.
Depending on your lender, payments can be made monthly, bi-monthly, even quarterly. However, please note that you’ll incur far more expenses with a business credit card than you would on a typical business loan.
Through microlending, an entrepreneur gets a small loan (usually less than $50 000) at very reasonable interest rates. The repayment terms are also flexible and often depend on how much the borrower makes on an annual basis. For example, Kiva lets you borrow as little as $100 and pays the entire interest without charging any other fees.
Military Reservist Economic Injury Disaster Loan Program also forms a part of the SBA loan program. Here, a start-up business can qualify for a loan amount of up to $2 million, and a repayment period of up to 30 years.
The loan amount is not constant. SBA will work it out depending on the economic injury at the time of application.
MREIDL is usually low-cost, and it’s meant to meet its financial obligations, basically staying afloat till normalcy resumes.
Hivers and Strivers Angel Fund would best serve veterans eyeing investment capital. These are mostly reserved for veterans and service academy graduates.
The basic qualification for such is that your business must be veteran-led, and be off-the-ground, properly positioned for consequent growth.
Start-up business loans for veterans are incredibly beneficial to the U.S. economy from so many different perspectives that it would be hard to name just one:
To sum up, the SBA loan guarantee for veteran small businesses is a smart investment because it creates jobs and increases economic activity.
Some of the most common disabilities suffered by veterans are hearing vision and speech impairments.
Furthermore, the VA reports that 1/3 of all veterans suffer from a mental illness, nearly half report chronic pain and more than a quarter struggle with Post Traumatic Stress Disorder (PTSD). This is why SBA has developed a special set of programs and initiatives directed at disabled veterans.
The SBA has a separate loan guaranty for disabled veterans: if the borrower suffers from a disability, the SBA may make up to 100% of the loan amount.
Furthermore, if the veteran is unable to secure a traditional lender because of his or her disability, SBA provides technical assistance and training to help them find alternative sources of funding.
In addition, SBA has a special initiative for disabled veterans called the Disabled Veteran Business Enterprise (DVBE) program. This program offers mentoring and training services to disabled veterans entrepreneurs.
It also helps them get financing through the 7(a) Loan Guarantee Program: if a veteran lender is unable to fund the business because of the veteran’s disability, the lender may submit a loan guarantee application to SBA.
Note that this is done at the lender’s own risk: if a borrower defaults on their loan, the guaranty fund will pay it off.
There are some very creative ways for veterans to raise capital and here is a brief overview of them:
No, VA doesn’t offer business loans. We recommend going for The Small Business Administration (SBA) loans instead.
Any active duty or honorably discharged veteran.
Banks, online lenders, and other non-profit institutions offer that. Check out the table above.
A score of above 600 is admirable.
Veteran entrepreneurs can raise capital through grants, gifts and donations, crowdfunding, small business loans, and even lottery.