According to the latest U.S. census data, roughly 1 out of every 10 small businesses in the U.S. is owned by a veteran. If you have served our country and are now considering starting your own business, there are several resources that can help you achieve your goals.
With 61.8% of veteran-owned businesses relying solely on personal or family savings to get up and running, many vets could benefit from outside funding. However, strict credit requirements at most banks and other mainstream lenders can make this a difficult task. Fortunately, many organizations specialize in providing financial support to veterans looking to become entrepreneurs.
Small Business Association (SBA) Veterans Advantage 7(a) Loan
The SBA's most popular program, the 7(a) loan helps vets find affordable funding for their small businesses. Longer terms and lower down payments make the 7(a) more manageable than many other traditional business loans. Loans of more than $125,000 may require an upfront guarantee fee, which is typically less than the fee levied to non-veteran applicants.
Veterans Affairs Office of Small & Disadvantaged Business Utilization (OSDBU)
The OSDBU specializes in providing assistance to businesses owned by veterans with economic disadvantages. In lieu of grants or loans, the office strives to provide these businesses with government contracts. After your business is registered and verified with the OSDBU, it will be added to their directory of eligible businesses and may be matched with a government contract. The VA also offers a similar program for veterans with a service-related handicap.
Veterans Affairs Vocational Rehabilitation and Employment (VR&E) Self-Employment Track
The VA's VR&E self-employment program helps vets with a service-related disability further their business goals. To qualify, you must be enrolled in the VR&E and have a service-related handicap that prevents you from finding suitable employment. Take a look at the full list of requirements to see if this program can help you get your business up and running.
Military Reservist Economic Injury Disaster Loan Program (MREIDL)
While not ideal for all veterans, MREIDL offers low-interest loans for businesses facing financial hardship due to a vital employee being called to active duty. The loan is designed to help a small business cover its obligations until the employee returns and operations resume as normal. Veterans who have been released from active duty for less than one year are eligible to apply for the loan, which can be up to $2 million and have a term of up to 30 years. The program requires collateral for loans over $50,000. The SBA reviews all applications and will only approve funding for businesses that would otherwise be incapable of staying afloat.
Owned and operated by veterans, StreetShares specializes in helping fellow veteran business owners find loans that best fit their business goals. Flexible financing options include a lump sum loan, line of credit, and contract financing. A veteran team member walks you through the application process and will answer any questions you may have.
Hivers and Strivers
If you're a U.S. military academy graduate looking to start your own business, Hivers and Strivers may be a good resource for you. This angel fund is operated by fellow academy graduates from West Point, Annapolis, the Air Force, and the Coast Guard. They offer funding from $250,000 to $1 million for each round of submissions and may partner with other lenders for large investments. While there's no guarantee that your startup plan will receive funding, it wouldn't hurt to submit it for consideration.
Known for helping vets find education and employment in the tech industry, VetsinTech also offers financial workshops for vets looking to start their own businesses. The nonprofit organization offers a variety of programs to help you learn about funding strategies and choose the right type of funding for your startup. You can connect with industry leaders, ask questions, and pitch your ideas to a panel of business experts who can provide you with valuable feedback. While VetsinTech doesn't provide direct funding, you may find its educational programs to be just as valuable.
If you're a veteran and thinking about starting a business, Rocket Lawyer can help. We're proud to assist veterans with their small business goals by helping them incorporate, make business contracts, and connect with attorneys at an affordable price.
To all the veterans and their families who serve: Thank you, from the Rocket Lawyer team.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.