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How to get a loan for your veteran-owned business

((Unsplash/Josh Wilburne))

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First, if you served in the armed forces, I do not just want to say "thank you" for your service. I want to also provide you with some helpful information that will allow you to get the capital you need for your business.

In addition to the traditional ways of getting loans for businesses, veteran-owned businesses have several other avenues. Just a small way to again say "thank you" for the sacrifice that our vets have made.

-VA Business Loan

The Veterans Administration does not loan money to businesses. Instead, the Small Business Administration has an Office of Veterans Affairs that deals with programs designed specifically to benefit those who have served in the armed forces.

These loans work in the same way that regular SBA small business loans work. The money is coming from an approved, non-government lender through an SBA program. This program has a guarantee from the SBA that makes them easier to attain, which is why they can be an attractive option for small businesses that are just getting started.

There are three types of VA loans - the SBA Express Loan Initiate for Veterans, the SBA's 7(a) loan program (Veterans' Advantage), and the Military Reservist Economic Injury Disaster Loan (MREIDL, which we will discuss separately down below).

The SBA Express Loan Initiative for Veterans provides loans of up to $350,000. There is also a non-veteran version of this program. However, veterans can get all upfront loan guaranty fees waived if they qualify.

The 7(a)-loan program also has a non-veteran version, but again, with the Veterans' Advantage, those who have served get their upfront loan guaranty fees waived (for loans up to $125,000). For loans over $125,000, veterans only pay 50% of the guaranty fees.

Counseling and guidance for these types of loans are also available from the Small Business Administration. This counseling and guidance can be very helpful, whether you choose to go with an SBA loan or not. They may be able to point you in the right direction or give you more ideas and options.

-Veterans Business Fund

The Veterans Business Fund is a new way for those who have served in the military to find funding for their businesses. The Fund operates on donations from donors - individuals, corporations, and foundations - who contribute to the fund.

Using these donations, the Fund will provide loans to veteran-owned businesses that are unable to acquire a traditional loan due to inadequate equity. There will be an application process where veterans will take the necessary actions and provide the necessary information. The fund will review applications and make decisions from there.

Note: The Veterans Business Fund is not currently accepting applications.

According to their website, "Until the necessary fundraising is complete, no applications are being accepted. Please check back to learn when applications will be accepted. The below information is provided to clarify how the Veterans Business Fund will work once it begins accepting applications."

If you are a veteran with a small business in need of cash, this is a resource you will want to investigate further. Once the fund is up and running, this will be a great help for veteran-owned businesses.

-Sunwise Capital Small Business Loan

Sunwise Capital has been providing small business loans for quite some time now and has earned the respect of the industry and their customers. Since 2005, Sunwise Capital has been using the latest technology to evaluate companies based on their actual performance, instead of just their personal credit. This allows well-run businesses to get the capital they need even though they may be denied by traditional lenders due to personal credit issues.

A Sunwise Capital Small Business Loan of $10,000 - $2 million is available to businesses that meet the following qualifications:

  1. The business has been in business for one year or longer
  2. The business has yearly revenue of $150,000 or more
  3. The business has a FICO credit score of at least 500

Traditional loans are often "off the shelf" style loans that do not consider your business' unique set of circumstances. Sunwise Capital always customizes their loans to each business' individual needs while also providing very competitive rates and terms.

-The Military Reservist Economic Injury Disaster Loan Program (MREIDL)

As mentioned above, there are three types of business loans offered to veterans through the Small Business Administration. We already discussed the first two above. The 3rd type has a very long name (as you can see!). However, it can be very useful for veterans who meet the qualifications.

This kind of loan is designed for a specific type of veteran business. If your business suffered loss because of you being called back into active duty, your business might qualify for this type of loan. If the business could have met its obligations had the owner not been absent due to being called up for active duty, this type of loan is there to provide the working capital necessary to restore that business.

The aim is to assist your efforts to get your business back on stable financial footing. This loan must be taken advantage of within a year of release from active duty.

Summary

No matter what kind of business you have, attaining the necessary capital to operate, or grow and expand, can be a challenge. Thankfully there are a lot of different resources available to veterans to assist them in getting the cash they need to make their business a success.

The options listed above are all great possibilities. Be sure to keep an eye on the Veterans Business Fund. Once it gets up and going, it could be an invaluable source of funding for veteran-owned businesses.

Again, if you have served in the armed forces, thank you! I hope this article helped you a lot and provided you with the information you need!

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