The best sources of funding for veteran entrepreneurs

Few things go better together than veterans and entrepreneurship. Many of the traits that veterans develop during their service - impulse, commitment, responsibility, organization - help them become effective business leaders when they come home.

This is not news for veterans: according to the SBA, one in four veterans after 9/11 wants to start their own business. They understand how effective they can be as business owners. The hard part is getting funding to start and develop their projects.

Anyone who has explored the concept of starting a business knows how crucial the start-up fund and working capital are to the prospects of a successful business. Without sufficient funds, companies cannot cover cash flow gaps, make smart investments, or scale efficiently to meet growing demand.

While starting your own business is a noble goal, there comes a time when your personal savings will not be enough to keep your business afloat until it is profitable.

If you are a veteran looking for additional funding, the following options are the best bets.

Loans for veteran entrepreneurs

Business loans are a common way for business owners to obtain financing. There are a variety of loan products available on the market today, from traditional term loans to lines of credit to credit cards. Here are some business loan options that are great choices that veterans can explore:

1. SBA Loans

The SBA has a number of loan programs , in which the federal agency partially guarantees bank loans to small businesses. SBA Loan 7 (a) and SBA Loan CDC / 504 are both popular loan programs that offer long-term, low-interest loans to highly qualified business owners.

SBA loans are not exclusively for veteran business owners, but the SBA Microloan program disperses loans through community lenders, many of whom seek to finance disadvantaged entrepreneurs, including veterans. If you are a veteran new business owner who needs start-up funds of up to $ 50,000, there may be no better loan on the market than an SBA Micro Loan.

In addition, the SBA's Military Economic Damage Loan Program is available to current military reservists and veterans whose small businesses have been adversely affected when they were called into active duty. If you fit this description, you can use this low interest loan to resume things on your return.

2. StreetShares

StreetShares is a lender that is owned and operated by veterans with the mission of financing business loans for fellow veterans. They do this by connecting veteran business owners with investors who can finance loans of up to $ 100,000.

The application process is quite fast, and the loan execution period can only take one working day.

3. Online creditors

It can be difficult for small businesses to qualify for a bank loan without the help of the SBA. In recent years, a new type of lender has emerged: online lenders, which offer faster and easier financing (ie with less stringent enforcement processes) than banks and credit unions.

If you have an immediate need for financing, or your personal or business loan is missing, a loan through an online lender may be the solution. The repayment terms will be less generous - higher interest rates, less time to repay the loan - but it can be a good first loan option for veteran entrepreneurs.

4. Franchise-specific financing

Companies like UPS, 7-Eleven and Little Caesar's offer special benefits and discounts to veterans who want to open a franchise under their banners. This may include points from the initial franchise fee, discounts on equipment orders, free marketing supplies, and more.

Equity financing for veteran entrepreneurs

Another way to get financing is to provide equity in your business in exchange for financing. If you have major financing needs (usually more than $ 1 million), you feel comfortable giving up partial ownership of your business and seek advice and mentoring along with financing, equity financing can be the way to go.

You can contact equity investors and venture capitalists on your own, or you can seek equity financing through several veteran-focused organizations:

Hivers and Strivers : Entrepreneurs who have graduated from a military academy can get early stage investments from this angel investment group.
Veteran Ventures Capital : A combination of mutual fund and consulting firm that helps companies with veteran leadership.
Task Force X Capital : An investor in B2B technology focused on veteran entrepreneurs.
1836 : This company makes direct investments in businesses owned by veterans operating in the lower middle market, focusing on companies in Texas and the Gulf Coast.

Grants for veteran entrepreneurs

Of course, many entrepreneurs are interested in the concept of free money to invest in their business. That's why business grants are so sought after.

There are several business grant programs specifically for veteran business owners. They include:

1. VetFran Business Grants Fund

Veterans who open franchises through the IFA VetFran program will also qualify for a $ 10,000 grant, which you can use with other funding.

2. USDA Grant for Veterans and Minority Farmers

Grants for small businesses through the Department of Agriculture's 2501 Program are available to veterans opening agricultural operations.

3. StreetShares Commanders Call Veteran Business Award

Along with their loans, StreetShares offers a $ 5,000 grant to veterans or military spouses who own their own businesses.

There are also a number of non-veteran small business grants that you can explore, offering a variety of funding for which veterans can qualify, including:

Grant for rural enterprises
FedEx Small Business Grant
Eileen Fisher Women's Grant
Chase Mission Main Street Grant
Visa Everywhere Initiative
LendingTree Small Business Grants Competition
Wells Fargo Community Investment Program

Crowdfunding

It is also worth noting that crowdfunding has become a legitimate option for many business owners looking for extra capital. You can use crowdfunding based on rewards or donations, as well as crowdfunding through stocks and debts.

Develop a campaign and goal for major sites like Kickstarter and GoFundMe, or use veteran-focused platforms like MilitaryStarter or Help Fund A Veteran . The stakes are relatively low - if you fail to reach your goal, try again or switch to other options.

Not all veterans who dream of starting their own business do so - and lack of funding is often the reason. Don't let funding problems stop you from pursuing your dream business and putting your skills to work for the community and society at large. Take a look at one of the options above and see what works for you