Military men and women that make transitions from military life to civilian life are awarded several honors. If they served in a war, such as Iraq or Afghanistan, and they want to become entrepreneurs, the military provides several advantages for Veterans to become small business owners.
One of the most significant reasons the government has launched Veteran owned business programs is that with high unemployment rates and the decreased number of skills the military teaches, it is difficult for Veterans to be hired in civilian environments. However, Veteran entrepreneurs can put their leadership, discipline, teamwork, and good work ethics to use by creating companies that focus on entrepreneurship.
In 2013, the Small Business Administration helped support more than 3,000 Veteran-owned business, which totaled more than $1.86 billion.
Veterans can still obtain funding through traditional banks, but there are also alternative funding sources available. Many Small Business Administration programs have expired, which has left Veterans looking for funding from friends, family, angel investors and finance companies. In many cases, it is best to consider working capital loans or a business cash advances, which are offered by credit line and investment companies.
At the end of 2014, the U.S. Small Business Administration announced it would discontinue fees on 7(a) loans that are less than $150,000 only through 2015. Originally, this was set to expire in 2014. As more companies require working capital funds that exceed $150,000, the only way they can obtain funds to keep in business is to work with hard moneylenders that do not have the strict requirements that government agencies enforce.
Unfortunately for many Veterans, starting their own small business can be costly. Veteran-owned businesses are required to submit and write a business plan, register a business, obtain all necessary licenses and permits, be knowledgeable about any local, state and national laws and regulations and understand all business-related taxes. They also have to be able to estimate startup costs, understand financing basics and prepare for financing, including how to hire employees, provide employees with benefits and incentives, market their business and effectively handle business exporting.
The government may also require that some companies find and team up with business mentors in the area, complete in-person or online training and if selling items to the government, comply with all contracting resources and guidelines.
Fortunately, there are alternative funding resources available for Veteran business loans.