According to the U.S. Small Business Administration (SBA), there are more than 2.5 million veteran-owned businesses in the United States, employing more than 5 million persons. Business funding programs for veterans recognize the sacrifice and service of more than 18.2 million military vets in the United States. There are lots of reasons that military veterans make great entrepreneurs. Among these include trust, confidence, commitment and resourcefulness, among many more.
Fortunately, as they move on from their post-military lives and seek to direct their experience and insights towards business ownership and becoming entrepreneurs, there are many different programs that provide funding for veterans who either own a business or want to become a business owner or even a startup founder.
Some of these programs include grants for veterans and startup loans for veterans. Many are available to veterans with good credit as well as veterans with bad credit.
Nevertheless, before considering the various options among the business funding programs for veterans, it is essential to check the qualifications and eligibility requirements of each opportunity. First, prospective veterans seeking military vet-focused funding of any kind should be any of the following:
- Service-Disabled Veteran
- Active Duty Military under Transition Assistance Program
- Honorably Discharged Veteran
- National Guard Member (current or past)
- Reservist (current or past)
- Spouse of any active or retired military person (current or veteran)
Now we will take a look at some of the various business funding programs for veterans.
1. SBA Lender Match
The Small Business Administration offers a host of resources to help military veterans start or grow a business. The SBA’s Office of Veterans Business Development (OVDB) is exclusively dedicated to supporting veteran entrepreneurship and oversees Veterans Business Outreach Centers (VBOC) across the country.
The SBA also has a unique tool to help uncover a variety of different types of business loans for veterans. The SBA Lender Match Tool uses a four-step process to help match veterans to the right type of loan to meet their business needs. To use the tool, veterans entrepreneurs simply describe their business (Step 1); wait to get matched with prospective lenders (Step 2); talk to lenders to compare their rates, fees and terms (Step 3); and apply for the loan (Step 4).
2. Military Reservist Economic Injury Disaster Loan Program (SBA MREIDL)
The SBA MREIDL program offers loans of up to $2 million to cover operating costs that cannot be met due to the loss of an essential employee called to active duty in the Reserves or National Guard. Loans through this program will provide money for a small business to continue with its operation until the person is released from active military duty.
3. VA Office of Small and Disadvantaged Business Utilization (OSDBU)
Through the OSDBU, the Department of Veterans Affairs prioritizes the welfare of retired military personnel as they venture into the business world. As such, their goal is to give government contracts to companies owned by economically disadvantaged veterans. While government contracts are neither startup loans nor startup grants, purchasing contracts with the Veterans Administration (VA) can be leveraged to secure business funding for veterans. The first step in the process is getting verified to do business with the VA. Once verified, participants are eligible to secure VA set-asides and sole-source contracts for VOSBs (Veteran-Owned Small Businesses).
4. Service Disabled Veteran-Owned Small Business Program (SDVOSB)
In addition to VOSBs, once verified through the Vets First Verification Program, veterans also become eligible for VA set-asides and sole source contracts for SDVOSBs. This program offers veteran entrepreneurs the opportunity to secure contracting dollars to support their small businesses. This program is exclusively available to veterans who qualify as service disabled.
5. Federal Business Grants for Veterans
Let’s be clear that the U.S. Federal government does not provide grants to help veterans start a business or pay off debts. Unscrupulous marketers who say otherwise by saying they can help veterans access ‘free money’ to start a business are almost always nothing more than scammers. Learn more about grant fraud here.
But the news business grants for veterans isn’t all bad. Each year, the federal government does award about $25 billion in grants to help businesses of all types and sizes carry out activities aligned to Strategic National Priorities. Many of these business grants are administered through the Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) programs. Military veteran entrepreneurs can search for other business grant opportunities by visiting Grants.gov, which serves as a single search point for all federal grants and cooperative agreements.
To find these business grant opportunities, simply check the “Small Businesses” box under “Eligibility” on the Grants.gov search page. Most importantly, anyone with an internet connection can access this information for free.
6. Vet-Focused Crowdfunding
Crowdfunding can also be a viable funding option for veteran entrepreneurs hoping to develop a new product or launch a new startup. Popular platforms include Indiegogo and Kickstarter. But there is also a veteran-specific crowdfunding platform called Help Fund a Veteran (HFAVET). While it mostly operates like any other crowdfunding platform, this one is specifically focused on military vets, their families, dependents and similar.
Other Business Funding for Veterans
Besides the six business funding programs for veterans mentioned above, there are other ways that vets can secure the capital they need to launch a business or help it grow.
Some of these include:
- Self-funding: Through this approach, you leverage your own financial resources to support your business. Also known as bootstrapping, this type of funding can include money from friends and family, savings accounts, personal loans, or even tapping into your 401k.
- Investors: Some veteran entrepreneurs with big, world-changing ideas seek funding through venture capital and/or angel investors. In either case, the founder gives up a portion of ownership in the company (equity), in exchange for funding. Military veteran founders can search for venture capital and angel investors using sites such as Crunchbase, Angel.co and many others.
Resources for Veteran Entrepreneurs
There are a growing number of veterans who are interested in becoming founders and launching their own startups. Organizations such as Founder Institute (a global accelerator for tech-enabled startups) has an increasing number of initiatives focused on supporting veteran founders. Founder Institute has chapters in more than 200 cities across 170 countries. It’s vet-focused initiatives are focused on supporting military vets in the United States. I have been involved with Founder Institute for years, mostly as a Co-Director and can vouch for the incredible resources and structure the organization provides.
There is also Bunker Labs, which is dedicated to helping veteran and military spouse entrepreneurs find the quickest route to a successful business. They have various chapters around the United States. I’m also somewhat familiar with this organization through speaking opportunities and relationships with vets who attended the program. I’ve heard nothing but good things about the resources and support Bunker Labs provides.
Lastly, in addition to funding guidance, the SBA’s Office of Veteran Business Development offers listings to a wide variety of other resources to support veteran entrepreneurs and business owners, including programs targeting specific groups such as female vets. Visit the OVBD website for more information.
Wrapping it All Up
Finding the right business funding programs for veterans is increasingly more difficult as more and more options arise. But this is a good thing, not a bad thing. Interested in talking more about how to sort through all these options and find the best funding source for your needs?
Contact me today and let’s talk!