The 5 Best Financing Options for Veterans
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When you ask successful entrepreneurs what it takes to run a successful business, they’ll usually answer with a personal character trait, not a specific skill.
Tenacity. Determination. Passion. Adaptability. A willingness to take calculated risks.
No one encapsulates these traits more than U.S. military veterans. While veterans of our active service or reservist military have already honed the attributes they need to succeed as business owners, access to funding too often becomes the key hurdle holding servicemen and women back from achieving their civilian mission. To help you overcome this obstacle, we’re detailing an updated list of the best financing options for veterans who hope to start or expand their small businesses.
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Veteran Entrepreneur Portal
For U.S. veterans just getting started with their search for business funding, the Department of Veterans Affairs’ Veteran Entrepreneur Portal provides a terrific starting point. The VEP’s mission is to connect veterans with a variety of federal services for assistance with their small business ambitions, including development resources and help with accessing financing.
This one-stop shop for all things related to veteran entrepreneurship is a must-visit for any U.S. veteran who hopes to open a new small business, expand their existing business or purchase a franchise.
Military Reservist Economic Injury Disaster Loan
The sacrifices made by active duty military and reservists extend far beyond the battlefield and impact every aspect of their lives, families and communities. When a military reservist leaves a small business behind during deployment, these sacrifices can be particularly steep. That’s why the U.S. Small Business Administration created the Military Reservist Economic Injury Disaster Loan (MREIDL), a loan program that offers very low-interest loans to help reservists rebuild their businesses after serving their country.
Veterans within one year of release from active duty can apply for the MREIDL and obtain a loan with terms up to 30 years. In addition to the one-year timing limit, the SBA must also determine that the business would be unable to recover without government assistance.
While this loan program obviously applies to only a very specific subset of veterans, those who meet the eligibility requirements often credit it as the key to rebuilding their civilian lives after service.
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Service-Disabled Veteran-Owned Small Business Program
Following in the footsteps of the MREIDL, the Service Disabled Veteran Owned Small Business Program is another SBA program designed to serve a particular subset of the U.S. military veteran community. Through this program, veterans with a service-connected disability who are principal owners of a small business may be connected with sole-source government contracts of up to $5 million.
Accion Veteran-Owned Business Loans
Government agencies aren’t the only source of funding support for U.S. military veterans. Outside the Department of Veterans Affairs and the Small Business Administration, the nonprofit organization Accion is also doing its part to provide additional financing options for veterans.
After completing the Accion Network’s simple, 15-minute application, veterans may be eligible for financing up to $1 million, depending on their business need. Accion’s loans can be used to buy or upgrade equipment, purchase inventory or supplies, hire staff or even market businesses to potential customers.
Because Accion is a nonprofit, the organization is often able to fund loans for veteran business owners who may not be eligible for a commercial loan. And, if Accion is not able to approve your loan request right away, they offer financial planning and even organizational and management resources to help your veteran-owned business become loan ready.
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Another great non-government resource for veteran-owned businesses, StreetShares is a for-profit loan marketplace on a mission to provide funding for as many veteran-owned businesses as they can. Through the platform, investors compete in an online auction format to fund different portions of specific applicants’ business loans. In each auction, the investor that offers the lowest interest rate “wins” the agreement.
While the StreetShares marketplace is also available to non-veterans, CEO and veteran military officer Mark Rockefeller has committed the company to a continued focus on veteran aid. Last November, the StreetShares Foundation announced a partnership with JP Morgan Chase to commit $10,000 per month in awards to eligible reserve or active-duty service members and military veteran small-business owners. Each month, three winners are chosen to split the $10,000 prize based on the merits of their business plan and the potential impact of the business on the military and veterans community.
As a veteran of the United States’ active duty or reservist military service, you’ve already proven incredible discipline, courage and honor in your service our nation. With help from these financing options for veterans, we wish you well in your pursuit of these same values through your small business endeavors.