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Loans for Veterans: 3 Things You Need to Know

Loans for Veterans

As of 2014, there were approximately 3 million businesses in the U.S. run by veterans, employing about 5.7 million people and generating $1.2 trillion in sales. While veterans only make up about 8 percent of the U.S. population, they are twice as likely to own a business as their civilian counterparts. Like most business owners, one of the biggest challenges for veteran entrepreneurs is finding the capital to sustain and grow their business. Fortunately, there are many organizations that offer loans for veterans.

Whether you are a veteran business owner who needs funds to maintain operations or you are getting ready to expand, it is important to know your business loan options. Below, we’ll tell you all that you need to know about veteran business loans and how you can find an option that works for you.

How Loans Support Veteran Small Business Owners

Though business growth can be exciting, it also creates new, unexpected expenses. There are many ways that a loan can help support veteran small business owners who need help sustaining or growing their business. Veterans can use a business loan to:

  • Buy more inventory
  • Replace, upgrade or purchase more equipment
  • Hire more staff to meet expansion needs
  • Build a new company website
  • Launch a full-scale marketing campaign
  • Fund other business growth costs

Not only does small business funding for veterans help cover expansion costs, but it can also offer peace of mind. Veterans with a business line of credit are able to draw from the line whenever they may need extra funds. This reduces the stress and hassle of wondering how the business will cover its growing operational costs.

Loan Options for Veteran Business Owners

There are a variety of small business loan options for veterans. The key is finding the option that works best for you.

7(a) Loan Program

The 7(a) loan program is a general business loan that is based on certain business factors like for-profit operation and demonstrated need. The average loan through this program is $300,000 and it offers different repayment terms based on what the funds are being used for. Though any small business owner who meets the qualifications is eligible to apply, the loan allows veterans to receive a 50 percent reduction in upfront fees.

Traditional Lenders

Like any other business owner, veterans can also apply for a traditional business loan from a bank. However, if the owner has a limited business history or less than stellar personal credit report, the chances of denial are greater. Additionally, traditional business loans often have a longer waiting process, which is not beneficial for business owners who need funds quickly.

Alternative Lenders

In addition to traditional business loans, veterans also have the option to obtain a loan from an online alternative lender like Kabbage. This is a great option for veteran business owners that are having difficulty finding the capital they need for their business. Alternative lenders have the following unique characteristics that make them a great option for veteran entrepreneurs:

  • Real-life data is used in the loan decision. Rather than relying just on credit history, alternative lenders use real-time data from the business like financial transactions and online sales, to determine eligibility.
  • Approvals are automated, allowing for quick decisions. The automated online process gives the business owner a decision in a matter of minutes, which means they can start putting their funds to use in a shorter amount of time.
  • Ongoing access to funds means you can use only what you need. With a flexible business line of credit, you can access the funds you need whenever you need them.

How to Apply for Loans for Veterans

The loan application process will vary depending on which lender you choose. However, with any lender you will need to provide some basic personal and business information that will help the organization make a decision on your application. Many traditional lenders may have a lengthy application process, while alternative lenders offer a decision rather quickly.

 

The main thing to keep in mind as you weigh your options for a veteran business loan is to find a lender that offers you flexibility and peace of mind. By working with a lender that understands the unique needs of veteran business owners, you can get the funding you need so you can focus your energy on your business.

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Kabbage Team

The Kabbage Team is here to not only fund the small business loans you need, but to help you grow your business through free marketing tips, webinars, tools and more. Is there something you'd like us to cover or want to get your small business featured on our blog? Send us a note at content@kabbage.com.

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