This federal program helps provide up to $2 million in loans for small businesses that need help covering operating expenses that cannot be met due to an essential employee being called to active duty. The funds cannot be used to cover lost profit, to repay commercial debt, refinance debt, or business expansion.

Here’s a look at seven small business funding options for veterans.

1. SBA Veterans Advantage Guaranteed Loans

The U.S. Small Business Administration (SBA) offers many resources for veterans and their family members who are interested in starting a business.  For funding, veterans can take advantage of the Veterans Advantage guaranteed loan program that offers up to $150,000 with no upfront guaranty fee. The SBA also offers training programs to get them and their businesses lender-ready for participation. Other loans offered via the program have small guaranty fees, including:

Loans from $150,001 to $500,000:

• 1.5 percent with maturity greater than 12 months 

• 0.125 percent with maturity less than 12 months 

Loans from $500,001 to $5 million:

• 3 percent for amounts up to $700,000 with maturity greater than 12 months

• 3.5 percent for amounts between $700,001 to $5 million with maturity greater than 12 months (for amounts up to $1 million, plus $3,75 percent for amounts exceeding $1 million

• 0.25 percent with maturity less than 12 months

2. Service-Disabled Veterans Procurement

The SBA and Veterans Affairs both offer programs to help certain classes of small business owners with preferential access to business opportunities via federal agencies. The SBA’s program for service-disabled vet business owners offers connections to federal contracting officers that have set aside portions of business or are offering sole-source contracts for eligible veteran-owned businesses.

3. LINC-ing Up Financing and Vets

The SBA’s Leveraging Information and Networks to Access Capital (LINC) program is an online service that matches small business owners with non-profit lenders that provide financial advice, microloans, small loans, and real estate loans.

4. VA Veteran Entrepreneur Portal

This online resource guide helps vets with resources for starting a business, including access to financial resources and the aforementioned federal contracting programs. The portal also offers tools to help with strategic communication, access to franchising opportunities, and training and employment programs for service members.

5. Hivers and Strivers

This angel investment group was founded by and operated by graduates of U.S. military academies. The firm focuses on early-stage funding for companies run by young military veterans, usually in $250,000 to $1 million investments per round.

6. Street Shares

Founded in 2013, Street Shares connects veteran business owners with investors looking to earn financial rewards and give back to former service members. The company offers three funding sources:

• Simple term loans of $2,000 to $100,000

• Lines of credit from $5,000 to $100,000

• Contract financing with funding based on future earnings

7. Military Reservists Economic Injury Loans

This federal program helps provide up to $2 million in loans for small businesses that need help covering operating expenses that cannot be met due to an essential employee being called to active duty. The funds cannot be used to cover lost profit, to repay commercial debt, refinance debt, or business expansion.

Benetrends is proud of its work to help veteran-owned businesses succeed. Benetrends has pioneered the use of a unique small business funding program that incorporates a new business as a C corporation, then uses your existing 401(k) and/or IRA funds to generate needed start-up capital. To learn more about how Benetrends can provide your veteran-owned business with funds and other business services, schedule a consultation.

Author

Molly Klein with Benetrends Financial

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