According to the Small Business Administration (SBA), over 2.5 million small businesses are owned by veterans of the U.S. armed forces. This represents 9.1% of all U.S. firms with veteran-owned businesses hauling in $1.22 trillion in revenue each year and employing nearly 5.8 million people. Veterans own businesses in all industries, including Finance and insurance, Transportation and warehousing, Mining, quarrying, oil, and gas, construction, and a host of others.
Like any business owners, veterans sometimes struggle with cash flow and have to look for funding from different sources. There are several sources of small business loans for veterans, designed to help them run and grow their businesses.
Eligibility for small business loans for veterans
Generally speaking, each lender will consider a slightly different set of requirements before deciding whether or not to fund a veteran-owned business. For the most part, however, to be eligible for a VA business loan, businesses must be at least 51% owned and controlled by one of the following:
- An honorably discharged veteran
- A service-disabled veteran
- An active-duty military member participating in the military Transition Assistance Program
- A reservist or member of the National Guard
- A spouse of any of the above
- A widowed spouse of service member who died in the line of duty or from injuries sustained as a result of their service
Financing options available to veteran-owned small businesses
There are a number of financing options available to small business owners who are veterans as listed below:
- Loans From Veteran-Focused Funding Firms
- Loans From Traditional Financial Institutions.
- Debt Financing From Venture Capitalists and Other Investors.
- Loans from the Small Business Administration
- Borrowing money from friends and family.
- Invoice factoring
- Merchant cash advances
- Business lines of credit
- Selling equity in your company
How can funds from a VA business loan be used?
- Cover Startup Costs
- Pay Operating Expenses
- Hire Employees
- Buy Property or Equipment
- Procure Inventory and Supplies
- Open An Additional Location
- Remodel the Retail Storefront or Restaurant
- Build a Website
- Invest in Marketing Outreach