Working for the military does many things to a person—it fosters resilience, persistence in the face of constant challenges, a mindset geared towards flexible problem-solving, and an aptitude to adapt to virtually any situation and manage to come out on top.
The only downside to all of this? When a service member gets out, they’re often so skilled and ambitious that they never want to work for another person again!
This isn’t really a downside, if the Veteran is able to find a way to channel all of those skills into their own business. And that’s exactly what many Vets do after they separate. Armed with an entrepreneurial spirit and a solid business plan, the only thing lacking is usually seed money. That’s why we thought we’d share a few tips on where to get funding for your Veteran-Owned Small Business (VOSB)!
Small Business Administration
The Small Business Administration should be one of your first stops when researching financing options. Similar to how a VA Home Loan works, the SBA itself isn’t lending you the money, they just make it easier to obtain. From $500 to $5.5 million, SBA guarantees a percentage of a commercial loan (typically 50% – 85%), with the caveat that the funds be used for set business purposes, naturally. This guarantee reduces risk to the lender, who might otherwise be either unwilling to offer the loan or they’d offer much higher rates.
Whether shopping for fixed assets (buildings, furnishings, equipment) or working capital, the SBA can help Vetrepreneurs find the funding they need. The process takes time, and in some cases, collateral. But lenders love the protection that the SBA provides, and some lenders will even match whatever amount the SBA is willing to guarantee. Their Lender Match tool can connect you to lending partners.
Apart from loans, SBA is also a resource for securing grants. Many are related to helping organizations which are, in turn, helping VOSBs. So if your business is going to be helping other Vets, you may want to investigate further!
SBA Office of Veterans Business Development
Specific to Veterans, SBA has an entire department dedicated strictly to you—the aptly-titled Office of Veterans Business Development (OVBD). OVBD exists to facilitate a gamut of Veteran-centered programs which offer aid to all Vets, transitioning service members, and dependents and survivors, too.
One of the first perks Veterans can benefit from is the Veterans Entrepreneurship Act of 2015. This Act offers “fee relief” by waiving costly upfront loan guaranty fees on Express Loans. The policy seems to come up for annual renewal, so keep an eye out to ensure it’s in effect for the fiscal year you’re interested in.
OVBD also features a wide variety of entrepreneurship training, including tailored curriculums for unique business situations, and also classes (both in-person and online) covering business ownership basics. They explain other SBA resources in greater detail, to ensure Vets can maximize their benefits. These programs may not directly impact your funding, but can help you understand how to get it while strengthening your overall knowledge of the business world.
One interesting program is their Boots to Business, which SBA provides directly at various bases during local Transition Assistance Programs. For those who didn’t get to attend such a class or who want to learn more, there’s a “Reboot” version which goes into greater depth and is open to all Veterans (not just those recently transitioned out).
Veteran Affairs
The VA’s Veteran Entrepreneur Portal (VEP) is a fast way to find financing for your VOSB. The site is linked to the SBA’s, but this user-friendly portal helps with navigation. A few of the options on the home page include:
- Start a Business
- Access Financing
- Grow Your Business
- Resources for Veterans
- How to do Business with Federal Agencies
- Corporate Connections
- Franchising Opportunities
Aside from SBA links, the site offers exclusive information on doing business with the VA itself. The VA is a major national client with a range of contracting and procurement needs for hospitals, regional offices, data centers and cemeteries. So depending on what type of business you’re planning to start up, this could be a potential customer to look into.
Also check out their Office of Small & Disadvantaged Business Utilization page. Their 9th Annual National Veterans Small Business Engagement gathering is taking place in Nashville, Tennessee, on December 10th and 11th, 2019. It’s advertised as one of the “largest business-networking events for Veteran-Owned Small Business suppliers and firms.”
International Franchise Association
Vets and franchises go hand-in-hand. Why is that? One reason could be because military service often requires members to pick up everything and move to a new location, with a new mission and new crew… and to do this over and over for your entire career. Over time, it becomes second nature to be able to plug and play, adapting quickly to your new environment.
With a franchise, it’s similar. The template is ready, the rules are written, but it’s up to you to learn everything and get it up and running. This can be a major time-saver compared to Vetrepreneurs who create a business from the ground up, not knowing if there’s even going to be a market for their product or service.
The International Franchise Association established their VetFran program to make it even easier to launch your new business. With 600 participating franchises and growing, VetFran’s main contribution to Vets is franchise fee reduction. Franchises are built on the concept that the original business did all the legwork and established a recognizable brand and successful business model, which they’ll let franchise owners use in exchange for upfront and ongoing fees. The largest of these is that massive initial fee, which can be hard to come up with. VetFran participants such as Dunkin’ Donuts offer a 20% discount on this fee, while others offer even deeper discounts.
VR&E Self-Employment
For Veterans who suffer from service-connected disabilities which make conventional jobs hard to hold down, the VA Vocational Rehabilitation and Employment (VR&E) program (aka Chapter 31) features a Self-Employment track option which can get you started in the right direction.
It doesn’t specifically offer funding, but can provide free services such as: development of your business plan; analysis of the business concept; small business training for operations, marketing and finances; help connecting to funding and other resources to launch your plan into action!
National Veteran-Owned Business Association
The National Veteran-Owned Business Association is “a direct link for contracting between corporate America and Certified Veteran’s Business Enterprises (VBE) and Certified Service-Disabled Veteran’s Business Enterprises (SDVBE).”
It’s said that 70% of Americans would opt to do business with a VOSB versus a non-VOSB, if given the choice. Getting certified isn’t required, but it’s a foot in the door if you’re interested in pursuing an official designation and/or want to go after major government contracts. Going through these hoops may demonstrate how serious you take your new business, which in turn can help open up networking opportunities.
Veterans Business Services
The Oregon-based Veterans Business Services does a bit of everything. A self-proclaimed “internet army of Veterans,” they work with VA VR&E and SBA’s OVBD to help service disabled Vets with self-employment opportunities. They also offer franchise education and consulting services.
SCORE
SCORE is a non-profit SBA partner and a massive network of expert business mentors who volunteer to help small businesses launch. This organization has been around for over 50 years, has helped over 11 million entrepreneurs, and offers a variety of free training and workshops in addition to their mentor-pairing service.
They have a live upcoming webinar on September 24th 2019, called Funding Options for Veteran Entrepreneurs. This session will cover:
- Why vets have trouble getting capital
- When they need to get funding
- What they can do to improve their chances
- How they should gather the needed information
- Who are the funding sources
- Where they can find those sources
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