Military veterans are playing an important role in the U.S. economy, launching businesses and creating new jobs. According to the U.S. Census Bureau, veterans own 7.2 percent of the nation’s 5.5 million businesses with employees, and the number of veteran entrepreneurs is steadily on the rise.
Whether you’re a veteran looking to get your small business up and running or want to take your current company to the next level, it’s likely you’ll need access to guidance, support, and/or working capital to achieve your entrepreneurial goals. We’ve rounded up a sampling of the resources and financing opportunities specifically designed to help veterans launch and run small businesses.
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Resources for Business-Minded Veterans
There are numerous veteran-focused entrepreneurship programs and organizations, both local and national, that can be accessed online or in person. These are just a few of the resources available for transitioning veterans interested in starting or growing their own business.
- Veteran Entrepreneur Portal (VEP): The U.S. Department of Veterans Affairs’ website provides direct access to an extensive array of resources necessary to guide every step of entrepreneurship. This online portal makes it easy for small businesses to access federal services and connects veteran entrepreneurs to relevant best practices.
- Veterans Business Outreach Center (VBOC): Part of the Small Business Administration (SBA), this program is a one-stop shop for transitioning service members looking to start, purchase, or grow a business. Located nationwide, VBOC’s provide transition assistance programs as well as business development training and mentoring through programs such as Boots to Business, which is offered as a training track within the Department of Defense’s Transition Assistance Program (TAP).
- Veteran Fast Launch: Developed by SCORE, a nonprofit association providing mentoring and training to entrepreneurs, this initiative offers free software and services combined with SCORE’s mentoring program to help accelerate the ability of veterans to start and succeed as small business owners.
- National Veteran Small Business Coalition (NVSBC): The NVSBC actively advocates for veteran-owned businesses to have priority for any contracting opportunities and hosts annual veteran entrepreneur training conferences.
- Syracuse University Institute for Veterans and Military Families (IVMF): In addition to focusing on economic and social issues facing military veterans, IVMF provides business educational opportunities for those transitioning out of military service. Programs include:
- Entrepreneurship Bootcamp for Veterans (EBV): This national program offers training in entrepreneurship and small business management to post-9/11 veterans and their families.
- Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE): This three-phase program offers tools to help female veterans become successful entrepreneurs. It includes online and in-person training as well as ongoing mentorship and support.
- Service-Disabled Veteran-Owned Small-Business Program: Qualifying entrepreneurs can take advantage of this program to obtain sole-source government contracts of up to $5 million. Among other criteria, participants must own at least 51 percent of the business and have a service-connected disability.
- American Corporate Partners (ACP): This 12-month mentoring program matches veteran entrepreneurs with volunteer mentors representing a wide variety of industries, education levels, and professional expertise.
Veteran-Owned Small Businesses Need Working Capital
One thing new and growing businesses have in common is the need for working capital. Having access to financing can help you cover expenses as you establish and maintain your business, rather than dipping into your profits. That’s where small business grants, loans, and other financing resources for veterans come in.
Common ways veterans use working capital financing include:
- Purchasing inventory: Working capital funding can be used to restock your inventory, purchase new products, or buy additional inventory to fill future orders. Some companies rely on working capital loans to negotiate better pricing when ordering in bulk, or they take advantage of a large sale on inventory where a substantial upfront payment is needed.
- Expansions or renovations: When your business is growing, investing in more space or another location can increase your revenue exponentially. With extra working capital, you can expand your business without having to rely on existing cash flow.
- Launching a new marketing campaign: Businesses looking to attract new clients or increase their online presence, can use working capital funding to expand their marketing efforts. Advertising, event sponsorship, direct marketing campaigns, and other return-on-investment opportunities are common uses of working capital loans.
- Hiring and training employees: Cash from working capital loans can be used for staffing and other human resources expenses such as hiring bonuses, employee training, and career fairs.
- Improving creditworthiness: Some small business owners use their working capital loans to establish good credit by proving they can manage debt well. If you work with a lender who shares information about the loan with the credit reporting bureaus and this information is positive, it can help to boost your credit score.
Choosing a Funding Option
Before you begin looking at financing options for your small business, it’s important to have a clear picture of your business finances. Determine how much funding you really need and consider how you will use the funds. Create a detailed business plan to ensure your extra working capital will drive revenue that ultimately helps you pay the money back.
Research what’s available and decide which is the best fit given the stage of your business, your revenue, and margins. Keep in mind that banks often have better rates but can be slow and require a lot of paperwork. Many online lenders offer fast access to cash but typically have higher rates. It is helpful to be realistic about your chances of accessing different funding options based on what lenders require.
There are a variety of funding options available, including:
- Small Business Grants: Small business grants for veterans provide free money to start or grow your company. Unlike loans, these grants do not need to be repaid. There are many places to apply for small business grants, including federal, state, and local government agencies as well as corporations.
- Business line of credit: A line of credit is an arrangement with a financial institution that establishes a maximum loan the lender will allow the business to take. When you borrow the money, you agree to an interest rate and a fixed repayment schedule. Once you pay down the line of credit, the account is closed and cannot be used again. Non-revolving credit products often have a lower interest rate compared to revolving credit.
- Peer-to-Peer Platforms: These online lending platforms connect institutional investors to your small business through services such as Prosper and Lending Club, which provides business loans up to $300,000 with one to five-year terms. Fundera and Biz2Credit connect borrowers with alternative and traditional lenders through comprehensive online marketplaces.
- Short-term business loan: Short-term loans are designed to meet immediate financing needs, like bridging gaps in cash flow and taking advantage of new business opportunities. You can cover costs with a short-term loan while keeping your daily accounts payable intact.
- Credit card: Small business owners can help conserve cash flow by using a business credit card instead of cash to pay for various business-related expenses.
- Working capital loan: Working capital is the cash available for the day-to-day expenses of running a business. A working capital loan allows you to cover operating costs for essentials like inventory, payroll, equipment, and marketing, or smooth fluctuating cash flow during a growth period or when preparing for a busy season.
Summit Financial Resources is proud to be a resource for veterans who need working capital financing to develop their businesses. We occupy the middle ground between easy but expensive financing and lower-cost, harder-to-get loans, offering custom financing solutions that use your accounts receivable and other assets as collateral. Because we are not regulated like a bank, we can structure more flexible deals, take more risks, and make funding decisions quickly.
If you are a veteran entrepreneur who is just starting out or on the fast track to business growth, we are committed to providing unique funding solutions to help you move beyond financial barriers on your road to continued success.
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Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.