When it comes to lending to small businesses and entrepreneurs, the SBA (Small Business Administration) has something for everyone. The broad suite of offerings found under their umbrella also includes SBA loans for veterans. Some of our nation’s greatest entrepreneurs and business leaders got their start in the military. But like so many others, in order to bring their dreams to fruition, they need that one important piece to the puzzle that makes everything click. That piece would be, you guessed it, funding.
In honor of the brave men and women who serve us, let’s take a few moments to celebrate National Veterans and Small Business Week discussing funding options designed with them in mind!
SBA Loans for Veterans
As stated earlier, the SBA created an entire arm of their program with veterans in mind. The organization understands that veterans, just live civilians, come in all life shapes and sizes. With that being the case, a number of loan options are available including:
The SBA Veterans Advantage Loan
The SBA Veterans Advantage Loan is one of the most popular loan options for veterans. This loan is offered without a guaranty fee for any small business that is outright owned or controlled by a veteran. The term veteran applies to anyone on active duty, or a reservist, or a member of the National Guard. Spouses can also apply as well as any widowed spouse of a soldier who lost their life while serving. Those with a disability that came as a result of military service are also eligible to apply. When building your loan profile, the lender will want to see proof of past or current military service.
The SBA 504 Loan
The SBA 504 Loan is another popular loan for veterans. The SBA 504 Loan, or Certified Development Company (CDC) as it is often referred to, is popular with borrowers in the market to invest in real estate, construction, or any type of machinery. Loans of this type can require a large infusion but the maximum amount a business can look to receive from the SBA is $5 million. Approval requirements for these loans are much higher due to the amount and the lender you choose will definitely want to see a stellar credit score and strong financials with your application package. To qualify for an SBA 504 loan, there are three eligibility requirements. First, the company’s average net income can’t be more than $5 million after taxes for two years preceding your application submission. Next, your next worth cannot exceed $15 million dollars. Lastly, your business must be a for-profit entity.
SBA Express Loans for Veterans
An SBA Express Loan is another viable option for veterans. These funds can be used in a number of different ways. Short and long-term working capital availability is a challenge many veteran businesses face when opening their doors. An Express Loan can be just the instrument to solve this problem. Other areas an Express Loan can be used include purchasing real estate, equipment, and the renovation of an existing structure that will be used as part of the business. Veterans can also use these funds to acquire other businesses or expand their operations. While proceeds from an SBA Express Loan can be used to refinance existing business debt, it’s important to note that these funds cannot be used to pay taxes or in any way that might put the repayment of the debt at risk.
What To Consider Before Starting A Business
If you’re a veteran and thinking about starting a business or purchasing one that’s already established, there are several things to consider before applying. First, do your research and understand everything that goes into running a successful organization. Learn how to build a team, the latest trends, products and services, and things you’ll need not only to start but more importantly, to sustain the business. Next, there are several documents a lender is going to want to see to complete your profile. Proof of current or past military service with an honorable discharge is something every lender regardless of location will want. The type of document they need will depend on where you’re at in your service journey, but while you’re in the fact-gathering stages, remember to find these documents.
Your lender will also want to see a professional business plan that outlines your vision for the next five years. This document will serve as your proof statement and make the case to the decision-makers that you and your business are worthy investments. The business plan should meet the SBA requirements and if done correctly, this document can position you for funding and success as you enter the marketplace.
The Coley Group Is Here To Help Veterans Start Their Businesses
The Coley Group is staffed by capable business plan writers with the ability to expertly craft a winning business plan that meets SBA requirements. The MBA business plan writers on our staff have written hundreds of business plans and other collateral documents that continue to help small business leaders all over the world realize their dreams – including military veterans. If you’re a military veteran looking to receive funding through one of the SBA programs, we welcome the opportunity to serve you just as you have so proudly served this great nation of ours. Please feel free to contact us today for more information. We’ll be happy to offer a quote and also, answer any outstanding questions you may have about the SBA loan process and the services we offer.
