Small Business Loans for Veterans
Loans for Veterans
Veterans possess valuable skills such as discipline, focus, and goal-setting, which are crucial for business success. Many successful businesses have been started by veterans, including the Play it Again Sports franchise and the food delivery service Plated. Despite these strengths, securing capital remains a challenge. Fortunately, various resources and loan options are available specifically for veterans.
Loans for Veterans Options
1. Small Business Administration (SBA) Loans
The SBA offers two primary programs of Loans for Veterans:
SBA Veterans Advantage: This program guarantees loans for businesses with at least 51% veteran ownership. The government guarantee makes it easier for lenders to approve loans, even for borrowers with lower credit scores.
Military Reservist Economic Injury Disaster Loan Program (MREIDL): This program provides financial assistance if an essential employee is called to active duty in the Reserves or National Guard. It is specifically for situations where military service impacts business operations.
For more details, visit your local SBA Veteran’s Business Outreach Center.
2. Veterans Business Fund (VBF)
The Veterans Business Fund is a non-profit organization that provides interest-free loans with favorable repayment terms. To qualify, you must be a veteran who has been rejected by a bank for insufficient equity. Note that this fund is not currently accepting applications, and the process can be lengthy.
3. Unsecured Business Loans
Unsecured business Loans for Veterans without collateral. They are available to businesses with as little as one year of operation. Loan amounts range from $5,000 to $1 million, with minimum monthly revenues required. These loans are accessible to borrowers with credit scores as low as 500. Unsecured personal loans may also be an option if your credit history includes frequent relocations.
4. Short Term Business Loans
For new or early-stage businesses, short-term loans offer a quick solution. These loans typically have terms ranging from six months to a year. Interest rates vary between 9% and 45%, and the application process is swift, with approvals often within 24 hours and funds deposited within a few days. This option is suitable if you need immediate capital and can handle the short repayment period.
5. Bad Credit Business Loans
Veterans may face credit challenges due to frequent relocations and deployments. Bad credit business loans, offered by alternative lenders, are designed for borrowers with credit scores as low as 500. These loans generally have shorter terms (2 to 18 months) and higher interest rates (12% to 45%). Approval is based on monthly revenues rather than credit history.
6. Merchant Cash Advance (MCA)
A Merchant Cash Advance provides funds against future credit card sales. Repayment is deducted as a percentage of future sales. MCA lenders assess your business’s revenue through bank and credit card statements, focusing on revenue rather than credit score. The advance amount starts at $8,000, and interest rates begin at 15%. Repayment is automatically deducted from your daily sales, simplifying the process.
Additional Resources for Female Veterans
Female veterans may find specific resources and support tailored to their needs. Global Pacific Advisors acknowledges the high success rate of veteran-owned businesses and offers additional information and support for female veterans seeking capital.
By exploring these resources, veterans can find the right financial support to start and grow their businesses.