Starting and growing a successful business can be difficult when there is insufficient funding. Most veterans setting up their businesses will quickly know that financing is one of the major hurdles they must sort out to run a thriving business. However, government and other financial institutions offer financial support to veterans needing help, as transitioning from military to civilian life can be quite challenging. Funding for veteran-owned businesses can come from loans, business lines of credit, or grants.
As you go through the process of building your business what you will find is that alternative lenders, like Financing Solutions Business Line of Credit, is a nice compliment to traditional grants and financing.
For example, The Small Business Administration (SBA) supports veterans entering the business world. SBA programs provide veterans access to capital to help them facilitate the operations of their small businesses. In addition, they provide funding for programs, training, and federal contracting opportunities.
Besides the SBA financing for veteran-owned businesses, there are plenty of other funding opportunities for veterans seeking financial support. Some of the financial assistance need little paperwork, and might not even require collateral and a personal guarantee.
Read on as we dive deep to discuss key issues about small business loans for veteran-owned businesses.
Summary
What Is a VA Small Business Loan?
In recent times, more veterans than non-veterans have ventured into businesses in the US. The activities of the veterans in the business world have a significant impact on the American economy. For instance, veteran-owned firms employ 5.8 million individuals, as 45% more veterans than non-veterans are likely to be self-employed and employ other people. Consequently, veterans need a small business loan more than ever before.
That said, what is a VA small business loan? A VA small business loan is financial support accessible for veterans looking to start small businesses, obtain financing for ongoing business operations, or get financing for expansion. One good thing about VA small business loans is that they have lower fees, preferential interest rates, and better terms, making them far more appealing than non-veteran loans.
VA loans are granted by banks or other financial institutions, such as credit unions. If it’s a partial loan guarantee, the SBA will partially reimburse the financial institution granting the loan if the borrower defaults on it.
How Do You Qualify for VA Small Business Loan?
You might be wondering whether you qualify for VA small business loan. However, like all types of loans, there are pre-conditions you must meet to be eligible to access the VA small business loan program.
Typically, you will be required to meet at least one of these qualifications below:
- You are on active duty and participating in the Transition Assistant Program (TAP)
- You are a reservist
- You are a National Guard member
- You are discharged under conditions other than dishonorable
- You are a service-disabled veteran
- Your spouse is on active duty, a reservist, a national guard member, or a veteran
- Your spouse died during military service or from a disability connected to their service
However, there are other decisive requirements you will also need to meet for the grant or loan. For example, factors like credit score, years in business, business plan, and more can also play important roles in your quest to obtain a VA loan but getting a VA business loan is not an easy process.
3 Types of Small Business Loans for Veteran-Owned Businesses
Savvy veterans want to cast a wide net when looking for small business financing. Exploring many funding options will help you make a sound decision that will impact your business more. Three veritable sources of funding for veteran-owned small businesses include SBA loans for veterans, business lines of credit, and grants.
SBA Loans for Veterans
The U.S. Small Business Administration helps veterans get funding to start small businesses or expand their existing companies by setting guidelines and reducing lender risk. SBA extends various credit assistance, such as 7(a) loans, 504 loans, Microloans, and Military Reservist Economic Injury Disaster Loan (MREIDL) to veteran entrepreneurs.
SBA loans for veteran-owned businesses provide financial cover and access to capital, especially for veterans that fall short of a financial institutions’ s requirement to get a small business loan through traditional loan programs.
Further, SBA works with lenders across the United States to help get small business loans into the hands of military spouse entrepreneurs with great business ideas but uncertain how to get funding.
Business Lines of Credit for Veterans
Lines of credit can be a reliable source of financing for veterans seeking financial help. Small businesses have been using credit lines over the years to meet working capital needs, take advantage of strategic investment opportunities, or cater to emergencies.
A line of credit is a preset amount of money that can be borrowed when needed, repaid, and borrowed again. The lender sets the amount of interest and the size of payments you will make.
One good thing about lines of credit from financing institutions other than traditional banks is that they can be set up pretty quickly. And some institutions like Financing Solutions don’t even ask for collateral or a personal guarantee. However, you need to do small paperwork. Plus, you need a 650 personal credit score, and your business needs to do $400,000 transactions per year in revenue.
Grants for Veterans
Government, companies, or foundations do provide grants to veterans with excellent business ideas to help facilitate or incentivize their business performance. Typically, grants don’t need to be repaid under most conditions, making it an excellent option for veteran-owned businesses.
In order to receive a grant, you must file and write up a grant proposal or an application. The grant writing process entails submitting a proposal to the grantmaker to solicit funding for specific business objectives. Below are some grants opportunities you might want to consider for your small business:
- Small Business Innovative Grant
- Small Business Technology Transfer Program
- The National Association for the Self-Employed Growth Grants
- Idea Café Grants
- Self-Employment Grants for Service-Disabled Veterans
- Vocational Rehabilitation and Employment Program for Disabled Vets
- The StreetShares Foundation
- Women’s Veteran Entrepreneurship Training Program
Are You a Veteran Needing Financing for Your Business?
Trying to get financing for your small business can be hard, especially when dealing with commercial banks. Approval for bank loans can be difficult when they are not convinced with your overall financial profile, including your credit score. Plus, when they finally approve the loan for you, it usually comes with a much higher interest rate and fees than previously anticipated.
At Financing Solutions, we provide unsecured business lines of credit for small business owners helping them to run their businesses. Our lines of credit program are easy to get in place, inexpensive when used, and costs nothing to set up.
Smart small business owners should always have a ready-to-go credit line in case of unexpected emergencies or to take advantage of opportunities. Our small business financing product is an excellent alternative to a traditional bank line of credit. Our business line of credit with instant approval requires no collateral and personal guarantees, making it a great backup cash plan.