New SBA Program Offers Business Loans to Veterans
The Small Business Administration recently announced the SBA Veteran Pledge Initiative, a new program that aims to increase business loans to military veterans by 5 percent a year for the next five years.
Over the life of the program, more than 120 of the SBA’s national, regional, and community lenders are expected to make it easier for about 2,000 additional veterans to obtain small-business loans totaling some $475 million.
To participate, here’s what you need to know.
Although it’s a separate program, the SBA Veteran Pledge Initiative is designed to complement the SBA’s other veteran-assistance activities. These include Operation Boots to Business, which trains veterans and transitions service members in entrepreneurship; and the VetLoan Advantage strategic initiative, which offers special financing discounts and training to veterans who own — or who would like to own — a business.
The Veteran Pledge Initiative is part of the SBA’s ongoing commitment to supporting veterans who wish to become entrepreneurs, says administrator Karen Mills. The idea behind the initiative is to provide loan guarantees, training, and other resources, so that veterans have better odds of succeeding as business owners. This in turn helps to drive local economies and create jobs.
Veterans already make up 9 percent of successful small-business owners in the U.S., operating 2.45 million companies that employ about 5.8 million people and generate $1.2 trillion in annual revenues. (If you include businesses in which veterans are at least 50 percent owners, those numbers increase to 3.7 million companies, 8.2 million employees, and $1.6 trillion in revenues.)
Contrary to the stereotype that veterans may have problems returning to the civilian workforce, they are in fact more likely than non-veterans to be self-employed. An estimated 8.3 percent of veterans running their own businesses are disadvantaged with service-related disabilities.
In general, to qualify for the SBA’s veteran programs, you must demonstrate that you:
- directly and unconditionally own of at least 51 percent of a company;
- exercise full decision-making authority within the company;
- have amassed enough managerial experience to plausibly run the company;
- manage the company both strategically and day-to-day;
- hold the highest position within the company; and
- earn the greatest compensation (unless taking a lower salary somehow helps the business).
For more details about the SBA Veteran Pledge Initiative or any of these programs, visit the administration’s website. For additional resources, check out the programs offered by the Veteran Office of Small and Disadvantaged Business Utilization, the Veteran Owned Business Directory, and the Office of Veterans Business Development.