There are plenty of resources available for the men and women who have served their country and wish to transition into civilian life by opening a small business. Not only are there loans and education programs that directly relate to their business needs, but other resources that can help indirectly.
When seeking a loan program to help you launch a startup, it can be difficult to sort through the different options, determine what you are eligible for and deciding which option is best for you. Here are a few of the best options to help you narrow it down.
VA Homeowner Loan.
If you’re looking to have a home office in an area relevant to your target market, you should consider seeing a VA loan instead of a traditional mortgage. Loans from the VA have 100% financing and don’t require payments for monthly mortgage insurance, saving you thousands of dollars annually. To take advantage of these loans, you will need to find hud approved condos or townhouses. Unfortunately, the program only covers townhouses and condos, so plan accordingly.
Another perk of having a home office as the hub of your business is the eligibility to claim some of your bills as a business expense, further reducing the stressors associated with home and business ownership.
Veterans Advantage Lending Program.
The Veterans Advantage lending program works through the Small Business Administration (SBA) to eliminate upfront fees for veterans seeking a business loan. The loan doesn’t come from the SBA itself, but rather through different lending partners including banks, credit unions, etc. The role of the SBA is to make the process as simple as possible for eligible veterans and guaranteeing part of the loan. In doing so, they are responsible for a portion of the loan should the borrower default.
Eligibility requirements include owning controlling shares in a business (51% at a minimum) with documentation proving a veteran was honorably discharged or service-disabled. The program is also open to active members of the National Guard and the Transition Assistance Program. Spousal outreach is also an aspect of the Veterans Advantage program, opening doors to spouses of service members and widows.
Military Reservist Economic Injury Disaster Loan (MREIDL).
The MREIDL is a failsafe for if an essential employee is called to service, putting the business at risk. It is not meant to replace profits lost during that time, but rather to pay the bills and keep the business afloat when it would otherwise fail. It provides only the amount of working capital to maintain the business until the employee in question is released from active duty.
This form of loan is meant for Military Reservists who do not have the means to keep the business afloat themselves. This is because the program is funded by taxpayers and therefore has stricter eligibility guidelines.
Becoming a Certified Veteran-Owned Small Business.
Becoming a certified veteran-owned small business will grant you access to various loan programs and training resources to help build an entrepreneurship toolbox. Furthermore, you may gain access to clients you wouldn’t otherwise retain as the VA office puts substantial resources into procuring contracts for certified businesses.
Even if you have no interest in government contracts, the benefits of having a certified veteran-owned business will help your startup in other ways. Many potential customers prefer to give their business to a veteran rather than their civilian competition, as a way to show thanks and honor the time spent serving their country. To be eligible, you must have controlling shares of a business, be involved in the daily operations, and have proof of an honorable discharge or service disability.
Using the resources and loan programs available to you, you can build a successful startup and start your career as a business owner.