Five Funding Tips for Growing a Veteran-Owned Businesses

Upon returning home from military service, veterans have a lot of decisions to make regarding their chosen career path. Now more than ever, veterans are hoping to own and operate their own businesses.

It isn’t surprising to see why. Entrepreneurship allows veterans to transfer their leadership skills into a career that allows a great degree of freedom. These individuals tend to prefer occupations that allow them to take charge of their destiny, and owning a business provides the autonomy and purpose that’s so important to post-service life.

Veteran-Owned Businesses Need Simpler Access to Capital

Of course, coming up with the money to start or maintain a small business can be an involved process. After all, only 25% of today’s veterans start a venture upon returning home. Compare that to World War 2 where nearly 50% of all veterans started a successful business, and it becomes clear that inaccessible funding is responsible for the decrease in modern veteran entrepreneurs.

If you’re a veteran considering starting your own business, or an existing business owner looking to secure extra capital, read on for our list of funding tips for veteran-owned small business.

Understand your Funding Options

It’s true in everything, and goes double when seeking small business funding: You really need to shop around before making a decision. Each option has a different pricing and repayment method, loan term (duration), approval process, and requirements.

Once you find options that best fit your term and pricing needs, you need to ensure that you can meet the application requirements. Spend time researching veteran small business loans – there are many options and organizations that go above and beyond to help veterans grow their business.

Remember to explore private lenders, banks, and federal loans as well. The SBA has been increasing its efforts to fund veteran-owned businesses lately and can be a valuable source of financing.

Keep an Eye on your Personal Finances

Establishing business credit takes time. If you’re just starting out, much of your ability to secure funding will hinge on your personal credit and assets.

Unfortunately, veterans often have little time or opportunity to improve their credit while serving. Different funding options require different credit scores, amounts of paperwork, and collateral. It’s critical that you understand your options in relation to your personal finances before striking a deal.

If you’re worried about your credit score or offering collateral, this guide features some options that may be a great fit for you.

Understand what Lenders are Looking For

Even for lenders that offer specific financing to veterans, lenders will all have strict and varying criteria for what they look for in a potential borrower.

It’s important to earn the lender’s trust, and the most obvious way is by offering a good credit score, assets, or collateral. However, this may not be an option for you.

Be sure to explain how the skills and experience you gained while serving will set you up for success in the world of business. (Think of it like a job application, but you’re still your own boss at the end of it.)

Think Outside the Box

Beyond traditional bank and federal loans, there are many unorthodox funding sources that most veteran business owners aren’t aware of.

Crowdfunding campaigns are an increasingly popular option to secure the last bit of necessary funding. Additionally, some lenders even offer specific veteran funding grants and contests that provide additional capital.

It’s always good to know that you have options besides the more common loan sources to give you the best range of financing for your veteran-owned business.

Ask your Fellow Soldiers

A lot of veterans you may have met along the way have probably walked the same path as you when it comes to starting a business, and there’s no shame in getting some advice from someone who has been there already.

Specifically, there are a lot of groups out there that offer mentoring programs to veterans looking to start their own business. These groups also provide valuable insight into the various steps and processes that go into entrepreneurship.

Stay patient and follow these steps, and your veteran-owned small business should get the funding needed to get started and maintain success.