Where Can Veterans Find Small Business Loans?
According to the Veterans Affairs, there are currently over 2.5 million businesses in the US that are owned by veterans, the bulk being sole proprietorships and small businesses.
In order to help ensure success in the business world, you need to obtain the right funding. Whether you need a vital equipment upgrade or an in infusion of cash flow to compensate for late invoices, having access to affordable financing could help you get out of various business bottlenecks.
With this in mind, knowing where exactly to obtain a small business loan is immensely crucial. Below is a rundown of veteran-friendly small business loan options.
Small Business Administration (SBA) Loans
The Small Business Administration (SBA) is an agency under the federal government known for being a champion and great resources for small businesses. It guarantees small business loans to business owners and encourages approved banks and lenders to lend money to small enterprises and new businesses at rates that are ordinarily only offered to more established businesses.
The agency offers various SBA loan options, with some specifically made for veterans. Particularly, three loan programs are geared made specifically toward veterans, including the SBA 8a Service-Disabled Veteran-Owned Business Contracting Program, The Veterans Advantage for SBA7a, and the Military Economic Injury Loans.
The Veterans Business Fund (VBF)
The Veterans Business Fund (VBF) is a nonprofit organization available to veterans as a financial resource. It is available to veterans looking to buy a franchise, grow their existing business, or those who wish to start their very own business. Note that the VBF won’t finance your outright so you will have to bring in a lender and 50% of the required equity capital.
In addition, it would only approve loan applications if you were unsuccessful in obtaining bank funding because of insufficient equity.
Business Credit Cards
While not veteran-specific, you can use business credit cards as a short-term source of revolving credit. In the event that you have a good credit history, there’s a chance that you will qualify for an APR of 0% from the issuer of the credit card. Essentially, it’s an interest-free loan for the entire loan term, which is usually about nine to 15 months.
This is an organization that’s operated and owned by veterans. Its chief function is to lend money up to $100,000 to veterans who want to be business owners. In select instances, it also offers lines of credit to some veterans in very particular circumstances, depending on the industry and location, via a peer-to-peer or P2P lending program. StreetShares is a viable funding alternative as far as short-term loans go, since it can provide financing within a couple of hours, offer relevant resources and information to help veterans succeed in their business, and offer affordable APRs that won’t exceed 39%.
It’s crucial to note though that not all loan programs will be perfectly suited to your business’ specific needs. Do your own research when exploring the small business loans available to you.