Every business needs funding to cater to core business needs, activities, and projects. Startups and small businesses especially need to access the financing they need to gain a foothold in the world of business. Unfortunately, getting funding is hardly ever an easy task for small business owners and special categories of business owners such as veteran-owned businesses and entrepreneurs of color.
Specifically, service-disabled veterans and veteran small-business owners account for a growing and thriving fraction of entrepreneurs in the country, whose efforts also have an economic impact. Veteran small business owners have grown to become an essential part of the U.S. economy, creating a business development system that enables them to grow and contribute more. There are several special business grants and resource programs available to veterans and military service members to start a business or boost their businesses. While some of these business grants and resources are sponsored by the state and federal government, the private sector also provides others. In other words, vets-turned entrepreneurs are encouraged to own thriving businesses and hire employees.
The U.S census bureau provided recent data, positing that veterans own about 7.2% of the 5.5 million businesses with employees in the U.S. This number is growing, and so is the support needed to help more veterans get their businesses off the ground.
What is Small-Business Grants and Resources for Veterans?
These are business development funding and general assistance, particularly aimed at providing special financial support and advisory services to former military personnel, active-duty officers, and in some cases, their spouses or partners. These grants enable them to integrate into a civilian business environment, but most importantly, to access help for starting or growing a small business.
Who is Eligible for Small-Business Grants and Resources for Veterans?
There are many small business grants for veterans in the U.S., and eligibility for each one differs. However, there are also basic requirements that qualify you for one or more. To qualify for federal grants, state government grants, or other grants for veterans, an ideal candidate must belong to at least one of the categories listed below:
- Honorably Discharged Veterans
- Military service members who are in Active Duty, participating in the military’s Transition Assistance Program (TAP)
- Reservists and National Guard Members
- Service-Disabled Veterans or military officers who got discharged due to an injury sustained in the line of duty.
- Current spouse of all veterans. Active duty service member, Reservist, or National Guard member. Also qualified are widowed spouses of military personnel who died while in service or from a service-connected disability.
Why Are Small Business Grants Important?
The importance of funding in business cannot be overemphasized. The fact is, businesses need funding to grow and sustain themselves long term. Having a small business loan to help grow your business within your civilian life is incredibly important to ex-service members. Whether you’re just starting out or already 5 years or more into a business, you can’t downplay the importance of adequate funding.
From concept development to marketing, hiring, and daily operational costs, resources are needed. This also applies to our veteran-owned businesses. Therefore, the need to source funds. Moreover, veteran-owned businesses are not always as competitive as other businesses that operate within the same niche. Supporting them with grants that enable them to go toe-to-toe with the other industry players is important.
What Are The Costs of Small-Business Grants and Resources
Getting a loan for your business can be challenging. And for veterans, it could be harder, being that their years in service do not allow them the opportunity to build a credit score, a strong financial history, or other requirements for accessing traditional loans. This is where Small-Business Grants and resources for veterans and the U.S. Small Business Administration (SBA) come into play.
SBA recognizes military veterans’ unique situations and offers veteran business owners an opportunity to get easy loans for their businesses or start a business. In essence, they don’t have to go through the rigors of meeting all lending requirements for traditional loans. Although SBA loans require the typical paperwork and qualifying criteria, such as credit scores and income verification, lenders can work with veteran businessmen and women to provide them with the funding they need.
Some of the benefits they enjoy include zero ($0) processing fees, very low-interest rates, free financial advisory services, and flexible loan terms that suit the veterans’ situation. With this, they don’t have to opt for traditional loans that may push them into debt or even bankruptcy. It is also important to note that many federal government grants are free money, and veterans may never need to repay. However, some of these grant programs do come with strict conditions regarding how you may invest the money and how much you can get in a single funding round. Therefore, it’s in your best interest as an aspiring veteran entrepreneur to go for a grant program that’s ideal for you and your business.
Does The SBA Offer Grants For Veterans?
No, the SBA does not offer grants for veterans. However, the SBA provides different materials, training, and resources, giving veterans the tools they need to succeed in business. The SBA funds and supervises these programs, which are available to assist service members, veterans, and their spouses. Some of the SBA training programs are the Women Veteran Entrepreneurship Training Program, the Veteran Federal Procurement Entrepreneurship Training Program, Service Disabled Veteran Entrepreneurship Training Program, etc.
Pros And Cons of Small-Business Grants and Resources For Veterans
As with several other lending programs and traditional loans for small business owners, grant programs have their advantages and downsides.
- Access to free money for your business
- Special treatment as veterans gets to bypass the typical hassles associated with getting business funding.
- You may mention the grant award in publicity and promotional materials.
- Many grant programs require strict compliance. Your business will be required to comply strictly with the conditions.
- The time and effort required for the grant application process
- They cannot use your repayment history to build a credit score if you want to borrow from traditional lenders in the future.
What Are The Small-business Grants and Other Resources Available For Veterans?
The good thing is, there are several of these, and this review touches on quite a number of them – the significant ones, especially. In most cases, different lenders have different requirements. If you’re a veteran, it’s better to take your time and research a little so that you can settle for the ideal grant program. Here are some important small business grants and resources for veterans.
#1 Veterans Business Outreach Center
The Veterans Business Outreach Center Program (VBOC) is a program under the U.S. Small Business Administration (SBA), and it is a perfect place to start.
There are 15 Veterans Business Outreach Centers scattered across the United States. Their primary aim is to provide business development assistance such as training, counseling, financing, mentoring, and financial advisory. Transitioning service members and spouses of deceased or disabled service members looking to start or grow their business can leverage the VBOC program’s assistance. However, VBOC does not provide these loans, and some of these services directly. Instead, they guarantee them and focus their effort on providing technical and management assistance to borrowers.
But that’s not all you can get from a typical VBOC program. They help veterans to assess their business concept, carry out a comprehensive feasibility study, and provide them with training in business management, franchising, international trade, digital marketing, and other related subjects. VBOC programs also offer free business workshops and personal mentorship programs to help veteran business owners work through their business challenges.
In addition to all of the above, veterans may also be eligible for other government financing programs through the SBA. This can include the Military Reservist Economic Injury Disaster Loan, which can help service members cover business operating expenses while they’re away on active duty.
#2 Hivers and Strivers
Hivers and Strivers is an investment group focused on providing startup funding to businesses owned by graduates of the U.S. Military Academies. If you intend to access a facility from Hivers and Strivers, you can expect to get between $250,000 and $1 million at a time. All applicants are required to fill out the loan application form on the company’s website. Hivers and Strivers is a good place to get quick funding to kick-start your business and get your enterprise off the ground.
#3 Institute for Veterans and Military Families (IVMF)
This is another fantastic program, which is available at Syracuse University. The university provides education and training for business-minded veterans through the IVMF program. Some of the programs you can expect to benefit from are the Entrepreneurship Bootcamp for Veterans With Disabilities (EBV), Veterans Entrepreneurship Training, Veteran Women Igniting the Spirit of Entrepreneurship program, and the Boots to Business program.
The program also aims to train veterans and people on how to access capital to finance their business.
#4 Boots to Business
Boost to business is one of the SBA’s educational services to veterans who want to start a business. It is free to all service members who wish to become entrepreneurs. Boost to business is a two-step education and training program.
Within two days, the program introduces aspiring veteran business owners to entrepreneurship courses and an eight-week-long foundation program on entrepreneurship, including how to write a business plan, sourcing for funds, record keeping, etc. Essentially, the Boost to Business program provides veterans with tips and techniques for starting a business and growing the business. Also, partners and spouses of all active-duty service members transitioning from military service are eligible to enroll.
#5 The Veterans Advantage Loan Program
The Veterans Advantage Loan Program (VA) is a popular business grant choice for most veterans and small business owners. This is because they can use the loan for any purpose without going through strict compliance policies. However, the veteran advantage loan seeks to serve former military members and veteran business owners who want to start a business or grow their business.
The VA offers benefits such as reduced guarantee fees for veteran-owned businesses. The VA program allows veterans to borrow up to $5 million. Financing needs that VA serves can range from equipment financing, renovation, debt refinancing, franchising, etc. Depending on the loan amount, the repayment can be up to 15 years.
For VA SBA loans less than $125,000, guarantee fees do not apply. Loans above $125,001 to $150,000 attract a 1% fee and 1.5% for loans amounting to $350,000. For regular SBA loans, applications’ approval can take many days and months before they get the funds. But for veterans, the process is fast, and approval typically takes less time – in most cases – within 36 hours. Veterans can access up to $350,000 under this grant program, and they do not need to pay any upfront guarantee fee.
#6 Military Reservist Economic Injury Disaster Loan
This loan’s design allows veterans to borrow up to $2 million and repay it over a 30-year period. It helps small businesses to cater to their daily operational expenses, including asset procurement. This SBA loan can help a military veteran cover his/her business’s operating cost while on active duty. The interest is minimal, typically 4%, but the veteran will still have to use collateral to access the facility.
#7 Patriot Boot Camp
As the name implies, this is a non-profit three-day boot camp, which service members on active duty can leverage to learn about starting a business and how to source for funding. Veterans and their spouses are also eligible to enroll in the training.
#8 Service-Disabled Veteran-Owned Small-Business Program
Qualifying veteran entrepreneurs for this grant program include service-disabled veterans looking to start businesses and veterans who own small businesses. The program helps to qualify veteran entrepreneurs to obtain sole-source government contracts amounting to $5 million. However, one of the requirements is that participants must own at least 51% of the business. This is aside from having a service-connected disability, which is still subject to verification by the Department of Veterans Affairs or the Department of Defense.
Deciding Which Small-Business Grants and Resources for Veterans is Right For You
Business grants offer veteran business owners and civilians alike the opportunity to start and grow their businesses without struggling to get funding. In the long run, well-performing veteran-owned enterprises contribute to the economy. Therefore, the U.S. government, including state authorities, have taken several steps in the right direction to ensure that funding is available to former military officers, active service members, and their spouses for varying business needs.
The resources and small business grants already discussed above are just a few of the numerous varieties available. Hence, if you carefully consider the options available to you, you’ll find more than one or two suitable for your business needs. Whether it’s to get your business off the ground, for furnishing, equipment purchase, loan refinancing, restructuring, funding of operational costs, etc., the majority of these grants are either free or available at very low-interest rates.