Each and every year, millions of small businesses open up for the very first time – with many of them led by veterans. That with 28.8 million small businesses in the US alone, employing 56.8 million people, it should come as no surprise that this is an engine for economic growth that needs to be supported.
According to the US Small Business Administration 82% of ALL businesses are going to fail because they have cash flow problems.
A lot of entrepreneurs (particularly veteran entrepreneurs) hear this fact and figure and immediately believe that they simply need to bring more cash into their operation. But in all honesty, the timing of the cash flow that they have to manage as entrepreneurs is just as important (if not even more important).
Any business that operates an invoicing system needs to be doing everything it can to manage current cash flow, projected cash flow, and cash flow that is coming in behind schedule.
A lot of businesses that are seasonal in nature have a real tough time with this. Landscaping companies, for example, may have zero cash flow problems in the spring and summer when business is booming. But the moment that the fall and winter seasons rolled around jobs start to dry up, cash starts to get tight, and all of a sudden these veteran owned operations are scrimping and saving just to try and get by.
This is why it’s so important to better budget and prepare how to analyze your cash flow situation, reconcile your accounts, understand your invoice timing (on average), and really dig down deeper into the specifics of your financial situation.
Thankfully, with the help of small business loans for veterans – like VA business loans, for example – all of this becomes a lot easier to manage and mitigate. Many of your cash flow situations can be resolved with strategic veterans small business loans designed to help you float through these otherwise rough, rocky, and tumultuous times while building and growing your business.
You’d be amazed at the amount of small business owners that have absolutely no idea they have a business credit score distinct and different from their “traditional” credit score – and that it has a huge impact on the kinds of financing they are able to take advantage of.
45% of all business owners (including veteran business owners) are ignorant of the fact that they have a specific business credit score, and 41% of them are unaware of the importance of this credit score when it comes to securing loans and financing packages.
As if that wasn’t bad news all on its own fully 82% of all business owners don’t know how to interpret their business credit score. It becomes a huge puzzle piece that they have to try and manage without really understanding exactly what it is, what it means, or how to improve or correct it.
That really puts veteran business owners behind the eight ball when it comes time to secure the funding they need to establish, build, or grow their new small business.
To top things off, the majority of small business owners (veterans especially) feel that the government isn’t doing everything they can to support their entrepreneurial initiatives.
Kaufman 2018 State of Entrepreneurship Study in the United States showed that 79% of entrepreneurs running small businesses believe that the government cares very little about them and is instead only interested in supporting larger, more established companies – particularly those described as “too big to fail”.
79% of entrepreneurs also reported that they received little to no support from the government to launch their business, and 60% of veterans stated that they just believe the government was interested in prioritizing the help they needed to build or grow their operation.
On top of that, the overwhelming majority of small businesses in the United States – veteran owned businesses for sure – can get started with microloans of $3000 or less.
The US Small Business Administration reports that most home-based franchises can be started with between $1000 and $5000, that 64% of all small businesses are started with less than $10,000, and with the average US SBA loan coming in at just around $13,000 veteran business owners do not need a mountain of money to get started making their financial dreams come true.
The important thing here to figure out is how to make the most of everything that small business loans for veterans have to offer.
With so many different options available to pick and choose from this can become a real tall task, but that’s why we have put together this quick guide. Use the inside information below to better understand the kinds of veterans small business loans available, how to choose the right VA business loan for your needs, and how to maximize the funding potential you have moving forward.
Let’s dig right in!
For obvious reasons, veterans very often get preferential treatment from traditional lending institutions like banks, credit unions, and other financial service organizations.
These kinds of companies love nothing more than to do everything they can to help America’s heroes that have all volunteered to risk life and limb to keep our country safe and protected in any and every way possible.
Dozens of different financing packages are available for entrepreneurs to take advantage of, many of them labeled “veteran small business loans”.
Other programs exist – including programs established by the US government, programs that can be leveraged from organizations like the Navy Federal Credit Union, and private organizations that want to conduct business with veterans first and foremost.
The odds are pretty good that if you have any military service under your belt you’ll see preferential treatment from these kinds of organizations. Unfortunately, finding the right solutions for your specific needs can still feel like a bit of an uphill battle – especially if you are brand-new to the world of entrepreneurship.
… You will not have to worry about struggling to find the kinds of VA business loans you need to get your business up and running, to take advantage of new opportunities as they become available, or to access the cash and capital necessary to grow and expand your business and make your financial dreams a reality.
Today’s financial organizations are more willing than ever before to support American veterans with the financing they need to make their business work. Nontraditional lending organizations, including government entities, nontraditional financial organization, and even crowdsourcing operation are also sources of funding you can leverage when you need to get the money to build your business.
Not all of these solutions are going to be perfect for your specific needs, your goals, or the kind of business you are looking to build. At the same time, however, the odds are pretty good that some of these programs and loan opportunities will be able to suit your needs right down to the ground – and a combination of them may be picture-perfect for the financial future you are striving to create.
As we highlighted a little bit earlier, some of these VA business loan opportunities are going to be better than others. You’ll want to do your research and due diligence to be sure that you are moving in the right direction to secure the financing you deserve – and that’s what we are going to detail in depth below.
Just know that no matter what kind of business you’re looking to build as a veteran there are going to be small business loans set up specifically for you to capitalize on. The application processes, the specific qualifications, and lending institutions you may have to leverage to get this money may be different and distinct for each individual veteran but the loans are definitely out there.
One of the biggest advantages in these specific types of small business loans for veterans is the fact that you are going to see significant discounts as well as total waving of loan guarantee fees from top to bottom when you are approved.
Just to really clarify this point, the Veterans Advantage program isn’t exactly offering a specific type of loan available only to veterans, businesses owned by veterans, or businesses operated by veterans. Instead, VA business loans instead offer a whole host of perks and benefits attached to more traditional US Small Business Administration loans that nonveterans will never have access to.
For starters, the ability to access guarantee fee discounts for all Small Business Administration Express loans as well as SBA 7(a) loans that you are approved for are not available to nonveteran individuals.
These kinds of loans can be good for anywhere up to $350,000 dollars – putting plenty of cash and capital in your business bank account to grow, expand, or start up the business of your dreams – and you won’t have to worry about paying ANY guarantee fee (a 0% guarantee fee, to be exact) the way that nonveterans looking to secure this exact same kind of loan will inevitably have to.
Through the SBA 7(a) loan program in specific, your loans will be limited to less than $125,000 – but again you’ll have that same 0% guarantee fee attached to your veteran business loans that nonveterans will not have access to. Any of the small business loans for veterans that exceed $125,000 in this particular category will have a guarantee fee limit capped at specifically 0.125%-3.75%.
It should come as no surprise to anyone that nonveterans won’t have access to that perk, either.
While traditional lenders (your big banks, your credit unions, and national lending institutions) are a lot less likely to approve small business loan – including small business loans for veterans, you won’t have that problem with the Small Business Administration.
The SBA reports that only 26.9% of all small business loan are approved by big banks, with smaller banks and credit unions really only approving 50.2% of applicants. Institutional lenders in general only approved 64.7% of applicants looking for funding for their business.
That means that if you go the traditional road to getting funding for your small business as a veteran you are almost always going to be rolling the dice with a 50-50 chance (or worse) of getting the money that you need.
When you shift gears and move forward with the SBA (particularly thanks to the advantages that your status as a veteran provide) those odds skyrocket astronomically.
All of a sudden you’re looking at a 75% approval rate or even higher. In fact, there are some SBA backed and guaranteed small business loan programs (especially those classified as microloans) that have a near 100% approval rate when you throw in the veteran status kicker of a no fee guarantee.
These are the kinds of financing packages you are going to want to pursue.
Yes, going through the actual SBA approval process can take a lot longer than most people expect or anticipate. It’s certainly going to take a lot longer than going through the loan application of process when you eliminate the SBA altogether.
But if you want to be sure that you have every chance of getting the small business loans for veterans that you deserve it’s worth a little bit of foresight, little bit of preplanning, and an application process that can take upwards of four weeks or more to move through.
We are going to dig a little bit deeper into these details right now. By the time you are done inside info we highlight in the rest of this quick guide you’ll know how to apply for VA business loan offers, SBA veterans small business loan, and other financing packages from traditional, nontraditional, and SBA backed lending institutions without having to worry about pulling your hair out along the way.
Individual rules, regulations, and specific qualifications may be added on top of the ones that we highlighted above by the individual lending institution you are actually going to be working with in the future.
The details that we highlighted above are just some of the most important core elements you’ll need to make sure that you meet, a bare minimum standard as a veteran that you will have to prove, and the general “low barrier of entry” that needs to be hurdled for you to take advantage of these kinds of lending packages.
Most institutions (including big banks, small credit unions, and traditional as well as nontraditional lenders) will go out of their way to help you as a veteran provide the documentation you need to prove that you meet these qualifications.
We have highlighted time and time again the advantages that you have as a veteran receiving the small business loans you need to build the business you’ve always wanted to – and many of the financial institutions you have the opportunity to work with are going to want to help make that happen for you.
You aren’t going to have to provide a mountain of paperwork to go through the VA small business loan application process, but you’ll definitely need some documentation to successfully complete this process.
The more you do to organize your paperwork, to get all of your ducks in a row, and the better you prepare for this application process by getting all of these key pieces of documentation (and copies of them you can present to the financing service you choose to work with) the better off you are going to be moving forward.
All of this documentation is pretty standard fare when it comes to putting together an SBA loan application even if you weren’t a veteran.
These are the documents that any financial institution are going to want to have a look at, the data and information that all financial institutions are going to want to review, and core pieces of information that you’ll want to have ready for presentation – with copies you can provide for their records – before you begin the application process.
If at any point in time you are unsure of or unclear about the documentation being requested don’t hesitate to contact the US Small Business Administration (or the loan officer you are working with) to get more details.
They do this kind of work every single day with veterans just like you, are motivated to help you secure the lending package you are after, and will almost always go out of their way to help you better organize your application for a streamlined process.
Some of this information (like your DD 214, DD 1173, and other military records) will either have been provided to you upon your discharge from your military service or will need to be accessed by contacting someone in your branch that can help you receive new copies.
As a veteran, you don’t have to be told that it can take a long time – a LONG time – to get your hands on these pieces of documentation. It’s critical that you do everything you can as early as possible to request any of the forms and records you do not already have access to if only to speed up the process as much as you reasonably can.
Don’t be shy about regularly contacting the military for this information, either. You want to be certain that you aren’t being pushed to the back burner, particularly if you are hoping to capitalize on your veteran status for funding that allows you to cash in on new entrepreneurial opportunities that may be time sensitive.
Some of these programs are going to be better suited to businesses that only need a little bit of cash and capital (those that can be built with microloans, for example), others are going to be specifically designed to help different classifications of veterans (like disabled veterans), and others still are available for any veteran to capitalize on looking for the funding to make their entrepreneurial dreams come true.
This program allows veterans a “head start” compared to nonveteran owned businesses when they are competing for government contracts.
Veteran owned operations will ALWAYS have a competitive advantage over businesses that do not have veteran ownership, and it’s critical that you capitalize on these kinds of opportunity – especially if you are in industries where lucrative business contracts from the government can change your financial future almost overnight.
More information regarding these specific programs can be found at www.va.gov.
Again, we are talking about a program that gives veterans an advantage over companies that aren’t owned by veterans – but this gives even more priority access to lucrative business contracts from the government to veterans that have disabilities.
Very often these other veterans that have paid the highest price when serving our great nation and the very least that can be done is to provide them with an opportunity to “cut to the firm of the line” when lucrative contracts are made available to US operations.
Consider Veteran Business Grants
While searching for the best financing packages available when it comes to a VA business loan is obviously a good idea you do not want to miss out on the opportunity to take advantage of “free money” set aside in the form of Veteran Business Grants.
Unlike loans, these grants have been established to provide money directly to veterans to build and grow their business without any expectation that they will ever be repaid. This is a gift to veterans (established privately or with the help of the US government) to give our American patriots the opportunity to hit the ground running building their business without having to worry about being saddled with traditional small business loans for veterans.
If you’d like to learn a little bit more about these kinds of programs it’s a good idea to look into these Veteran Business Grant opportunities in specific:
- VetFran Business Grant Fund
- USDA Veteran and Minority Farmer Grant
- StreetShares Commanders Call Veteran Business Award
- Little Caesars Veterans Program
Obviously these four programs only barely begins to scratch the surface of the financial support you can secure as a veteran through different grant opportunities.
The liaison you are working with through the US SBA to secure veteran small business loans can almost always point you in the direction of other grant programs you’ll want to dig deeper into. Again, this is free money with zero expectation that any of it will be repaid – money that can help you build your business without having to worry about whether or not you’re able to make payments on big loans along the way.
Used in conjunction with traditional veteran small business loan it can really accelerate your growth, fast-track your success, and help you capitalize on all kinds of new opportunities that just wouldn’t have existed otherwise.
