The Small Business Administration (SBA) is dedicated to helping entrepreneurs find funding, including small business loans for veterans. If you need a small business loan with competitive terms, and lower down payments, the SBA may be able to help. There are many opportunities with this government agency including training, education, and funding help.
Small Business Administration Help For Veteran-Owned Businesses
The SBA has a section on its official site that is dedicated to veteran-owned businesses. SBA also runs the Office of Veterans Business Development.
That operation is described on the SBA official site as being dedicated “exclusively to promoting veteran entrepreneurship, the OVBD facilitates the use of all SBA programs by veterans, service-disabled veterans, reservists, active-duty service members, transitioning service members, and their dependents or survivors.”
There are also programs that can help veteran business owners find more operating capital, training, and business opportunities. In some cases, the SBA may be able to help veteran-owned businesses who want to enter the federal procurement system.
SBA Training For Veterans
One important SBA initiative is designed to help veterans is known as the Veterans Business Outreach Center Program designed to mentor, train, and help businesses plan to succeed. The SBA offers a number of training programs including, but not limited to:
- Boots to Business–Offered on military bases (even those overseas), this is a training track of the Department of Defense Transition Assistance Program.
- Women Veteran Entrepreneurship Training Program–Offers business training to women veterans, service members, and “women spouses of service members.” This training is funded via grants from other agencies.
- Service Disabled Veteran Entrepreneurship Training Program–Business training offered to service-disabled veteran entrepreneurs “who aspire to be small business owners or currently own a small business.” Like the Women Veterans Entrepreneurship Training Program, this training is also funded by grants from agencies including the Veterans Entrepreneurship Program Riata Center for Entrepreneurship, Spears School of Business at Oklahoma State University, and the Entrepreneurship Bootcamp for Veterans at St. Joseph’s University.
- Veteran Federal Procurement Entrepreneurship Training Program–Training for veteran-owned and service-disabled veteran-owned businesses pursuing in federal procurement.
SBA Business Counseling For Veteran Business Owners
The agency’s official site has a locator tool to help you search for an SBA-approved business counselor by state. This local assistance can be a very important resource, especially for those who need help finding resources navigating local zoning issues, tax laws, or other business-specific issues.
The SBA And Business Loans: Helping, Not Lending
It should be noted that like most other government-backed loan programs, the Small Business Administration does not lend money. Instead, it guarantees business loans for qualifying applicants and helps them find participating lenders who can provide loans a small business owner might need to get started.
SBA-Backed Loans?
The Small Business Administration operates in a manner similar to the FHA with its FHA Single-Family Home Loan program, except the SBA-guaranteed loan is for businesses instead house hunters looking for a home.
SBA loans are guaranteed by the agency, reducing the risk to the lender and making the loan more affordable for the small business owner.
Do you need small business capital? Do you need to buy equipment or other materials for your business? SBA-backed loans for veterans may be able to help, but as a facilitator between you and a bank rather than as the lender.
According to the SBA official site, “The agency doesn’t lend money directly to small business owners. Instead, it sets guidelines for loans made by its partnering lenders, community development organizations, and micro-lending institutions.”
Terms Of An SBA-Backed Business Loan
You may be able to apply for a loan as low as $500 or more than $5 million depending on circumstances, need, and your financial qualifications. These SBA-backed loans can be used for “long-term fixed assets” as well as operating capital.
SBA loans are not all the same. Some programs may permit you to use the funds in ways other programs do not. You may find certain restrictions on funds depending on the lender and the program.
Your eligibility for a certain kind of SBA loan may depend on what your business is used for, where it is based, who owns it, and the income it generates.
The SBA official site says that even applicants with bad credit are welcome to apply, and the criteria for SBA funding may include the applicant having exhausted all other funding possibilities first.
Some types of businesses get special attention from the SBA due to the nature of the operation. Did you know the SBA has special programs for veterans who are considering or already running an export business.
According to Small Business Administration documents, lenders consider export operations to be risky business, which “…can make it harder for you to get loans for things like day-to-day operations, advance orders with suppliers, and debt refinancing.”
The SBA offers programs “to make it easier” to get export loans. Contact the SBA International Trade Finance Specialist or the SBA’s Office of International Trade to get started in this area.
How The SBA Assists Veterans Who Need Business Loans
If you need a business loan as a veteran owner/operator the SBA can help with a program called Lender Match.
This is an online tool used to gather your basic information including the nature of your business, annual income, veteran status, and whether or not you have written business plans or have a projected income or earnings schedule.
Once you have filled out the form, you will be matched with a group of lenders based on your zip code and other factors, and it normally takes up to two business days to be contacted for more information. That waiting time is naturally subject to change depending on demand, time of year, etc.
Lender Match requests the amount of money you wish to borrow up front. It’s one of the factors used to determine who you should be put in touch with to apply for the loan.
This information is crucial because if you need to borrow a smaller amount, some loans won’t be available to you in the same way as for a borrower who has a need for a high-dollar loan and the business clout to be taken seriously as a credit risk.
If you are a new business owner, or are still in the planning stages of your business, you may find your options are different than for those who have prior experience running a company or who are successfully running one now.
Business Loan Issues You Should Know About
Anticipate certain documentation requirements that any lender you are matched with via the SBA or any other agency will place on you. Expect to show at least two years or more worth of business tax returns, profit-and-loss statements, business plans, projected income, and other documentation.
Business loans are predicated on the idea that the borrower is a good credit risk and that the business will survive long enough to justify the loan for both lender and borrower. The more advance planning (on paper) you can do to show a lender how you will profit and grow as a business will be key to convincing the loan officer you should get your small business loan.
SBA Resources For Veterans And Small Business Owners In Spanish
Spanish-speaking veterans are not left out of the picture; the Small Business Administration has the entire official site available in Spanish as well as English. The resources you can find en Español include:
- Guía de negocios
- Programas de financiamiento
- Contratación federal
- Centro de capacitación
- Asistencia local
- Acerca de la SBA
The official site also has a Google Translate button built into the official site totTranslate the site into a variety of languages including Kurdish, Ukranian, Gaelic, Hindi, and many others.
If You Need Local Assistance With A Small Business Loan Or Small Business Training
The SBA provides a locator tool to find regional SBA offices and and district-level SBA offices. In some cases your nearest SBA location may be in a nearby major city, but you can get many forms of assistance online (or start the process online at the very least).
Some SBA offices serve multiple states. One such operation in Chicago (the Region V office) serves:
- Illinois
- Indiana
- Michigan
- Minnesota
- Ohio
- Wisconsin
In such cases, it is best to anticipate that serving a group of states may create a situation where demand slows down processing times or creates delays in getting personal assistance. It is wise to start early when contacting the SBA and expect delays.
Don’t try to beat other deadlines while waiting for assistance at the SBA level unless you know your processing times from start to finish will work in your favor. In lending, there are often delays, setbacks, and complications. Anticipate these before you begin for best results.
Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News
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