How Military Experience Could Help Secure Business Financing
Military service does not just display a veteran’s commitment to their nation. It also equips them with valuable skills and a strong mindset that could increase their chances of business success.
Public and private institutions recognize this and offer several financing options to help veterans start and finance their businesses. These often come with favorable terms to thank veterans and recognize their unique skills, experience, and work ethic.
This article explores several financing programs and methods for funding your business venture and succeeding at business ownership in civilian life.
1. Small Business Administration Programs
The Small Business Administration has numerous programs offering small business loans for veterans.
- SBA 7(a) loans: The SBA’s standard loan program, these loans offer significant funds for various business purposes.
- 504 loans: Large, long-term financing for major fixed assets.
- Microloans: Smaller loans of up to $50,000 for working capital and other smaller needs.
- Veterans Advantage Program: This program reduces SBA loan fees for some SBA loan programs, making them more accessible to veterans.
- Military Reservist Economic Injury Disaster Loan (MREIDL): Offers up to $2 million to businesses if one of the owners is a reservist called to active duty. The exact amount is based on the potential economic injury of the veteran owner being absent for duty.
The SBA offers courses on running a business and getting funding to help you navigate business ownership confidently.
Plus, the SBA’s Veteran Business Outreach Centers (VBOCs) offer workshops, mentorship, training, and other resources to help you achieve your business goals.
Visit the SBA website to learn more about each program’s requirements to see if you qualify.
2. Private Business Loans
Banks, credit unions, and online lenders may offer special financing programs for veterans. Programs vary by lender, but some perks may include:
- Faster or easier approvals
- Lower interest rates
- Larger loan amounts
- Reduced or waived fees
- Flexible repayment terms
Furthermore, some lenders primarily focus on helping active duty or veterans. A few allow only military members and their families to be customers or members.
In either case, these lenders may thoroughly understand your unique needs as a veteran business owner and tailor financing products to help you grow. For example, they might not just offer financing but also help you explore veteran-specific business resources.
Research veteran business financing programs between lenders to find financing that makes the most sense for your business.
3. Grants For Veterans
Small business grants for veterans are forms of financing you don’t have to repay, making them essentially free money if you qualify. However, they tend to be offered for specific purposes or certain industries. Governments and nonprofits typically offer these.
Beyond that, your military service and experience could give you a leg up when applying for non-veteran-specific small business grants.
Governments, nonprofits, and some corporations award grants to any type of small business if they apply and are chosen. Some only want you to meet certain requirements, whereas others are competitions.
Either way, veterans can leverage their skills and experience to show why they deserve to win the grant. This gives them a wide range of grant opportunities to apply for, helping them obtain debt-free financing.
4. Venture Capital
Venture capital (VC) is a type of financing where an investment firm offers early-stage or startup companies’ significant capital to fund growth.
The VC firm buys partial ownership in the company — called equity financing — and thus gets some decision-making power. This means you do not take on debt.
Military experience is attractive to VC firms since veterans have experience handling pressure, navigating fast-paced environments, and leading others. Some venture capital firms invest exclusively in veteran-owned startups.
Therefore, if you’re launching a startup firm, VC could be a way to acquire significant funding without debt. Keep in mind that the VC firm owns a stake in your company.
Secure Favorable Veteran Business Financing
The skills you earn and valor you displayed in serving your country give you access to exclusive financing sources and give you an edge when seeking traditional financing options.
Both the SBA and private lenders provide numerous programs to help you secure debt financing with favorable terms. Meanwhile, grants offer free capital for specific uses, while venture capital firms can help you get a business off the ground.
Take full advantage of your financing options — debt, equity, and grants — to help you gain an edge in the business world and succeed.
