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Veteran Small Business Loans
Kabbage Funding™ takes pride in delivering access to small business loans for our country's veterans
How can veteran business owners get funding?
Currently, one out of every 10 businesses in the U.S. is veteran-owned, and the numbers are continuing to grow with more than 21 million veterans in the U.S.
After active duty, many veterans choose business ownership to continue giving back to their community and providing income for their families. Whether you’re launching a brand-new business or already a veteran-owned business and need business financing to hire employees, open a new location, or need extra working capital, veteran business loans can help. There are many financing options for veteran business owners, from a VA small business loan to business grants or traditional business financing.
However, many previous loan initiatives like the Small Business Administration Veterans Advantage and Patriot Express Loan Programs that were created to assist veteran-owned businesses and entrepreneurs have expired or changed in recent years. This left many veteran small business owners with very few places to turn to for funding.
At Kabbage, we're honored to play a part in supporting veteran entrepreneurs. We provide business loans for veterans and other business loan options to help get you the working capital you need to flourish.
Benefits of a veteran small business loan
A veteran small business loan can help cover expenses as you establish and maintain your small business. Some of the most common ways veteran borrowers use small-business loans include:
- Purchasing more inventory. If you win a big contract or are just looking to stock up for your busy season, you can often negotiate better pricing with vendors when you order in bulk. Having a small business loan can give you peace of mind and buying power as you invest in inventory you know will yield a significant return.
- Expanding office space or locations. When your business is growing, investing in more space or another location can increase your revenue exponentially. With extra working capital, you can expand your business without having to rely on existing cash flow.
- Launching a new marketing campaign. Whether you're using online tools like Google AdWords or YouTube, or sticking to email marketing or more traditional methods, getting the word out about your business can be one of the best ways to see a return on a small business loan.
- Upgrading your equipment. From buying new equipment to entering a new lease or just updating your existing equipment, getting a small business loan for equipment can help you ensure your business runs efficiently and effectively.
- Hiring and training new employees. When your business gets too big for you to manage on your own, having a small business loan to hire and train new employees can give you breathing room to focus on growing your business.
When should I get a veteran small business loan?
If you or your spouse served in the military and need to fund your small business, or need financing for start-up business costs, there are many business loans and options for veterans.
When you're an veteran entrepreneur starting or currently operating your own businesses, you'll likely need financing from outside sources from time to time. You may need cash for start-up costs and essentials like inventory, payroll, equipment and marketing. Rather than dipping into your profits, using a veteran business loan can help you cover your expenses while keeping your cash flow intact.
Short-term business loans can be extremely beneficial to smooth fluctuating cash flow during a growth period or to prepare for a busy season. If you're looking to borrow money for your veteran-owned small business, carefully consider how you will use the funds. If you know that taking the loan will put you in a position to pay back the funds quickly, a small business loan for veteran borrowers can be a great option.
Get the working capital you need by contacting Kabbage today to better understand the loan options best suited for your business.
Types of small business loans
Each of the funding options below has pros and cons, so it's important to research them thoroughly to decide which is the best fit for your business financing needs.
Business line of credit: A line of credit is an arrangement with a financial institution that establishes a maximum loan amount the lender will allow the borrower to take. You can withdraw any increment from the line of credit at any time, as long as you don't exceed the maximum credit line amount amount set in the agreement. A business line of credit is similar to a credit card: you use it as you need it. As you make payments specified by the repayment terms, you can borrow or use more of your credit line as your principal is paid down.
Revolving line of credit: Revolving credit is a flexible method of borrowing money. Instead of borrowing a fixed amount of money all at once, revolving credit allows your business to borrow working capital in increments that you need, up to a pre-approved limit. Revolving credit is an important way for small business owners to keep operations going smoothly with the ups and downs of sales, seasonal changes and occasional cash flow shortages. Getting revolving credit can enable your business to pursue opportunities quickly, even when you don't have funds available to invest. As long as you make your minimum payments and limit your debt to what you can reasonably pay back or afford, revolving credit can be an effective cash flow management tool for your business.
Peer to peer loan: Peer to peer lending is an online forum where a platform matches borrowers with investors. Borrowers complete an application and receive an offer for credit, typically from the banking partner of the platform. Companies can then invest in loans that have been offered to borrowers. Some typical characteristics of peer to peer lending include:
- Interactions are facilitated through a third-party, online lending platform
- Investors can select with which borrowers they will engage
- No prior relationship between investors and borrowers is necessary
Short-term business loan: Short-term business loans are designed to meet immediate financing needs, like bridging gaps in cash flow, dealing with unexpected needs for extra funding and taking advantage of new business opportunities. Rather than pulling funds from other parts of your business, you can cover your costs with a short-term loan while keeping your daily accounts payable intact. This type of loan is an excellent choice for veteran-owned businesses.
Business credit card: A small business credit card is one way that business owners can pay for the various business-related expenses they incur. Small businesses can help conserve cash flow by using a small business credit card instead of cash for the items they need. However, credit cards often come with higher expenses versus low-interest loans through a lending company.
Working capital loan: Working capital is the cash available for the day-to-day expenses of running a business. Net working capital is a calculation of current assets minus current liabilities that helps measure a company’s efficiency and short-term financial performance. A working capital loan allows you to continue your daily operations without tapping into your cash flow.
Microloan: Microloans are small loan amounts, generally offered to those with a lower credit score or without stellar credit or the collateral typically required for a traditional loan. The Small Business Administration created a Microloan Program to foster growth for small business owners. Microloans are provided to small businesses through nonprofit organizations across the U.S. Microloans are available for up to $50,000, with the average amount granted being around $13,000.
Veteran small business loan resources
Office of Veterans Business Development
The Office of Veterans Business Development, part of the Small Business Administration (SBA), offers several programs and services to support veteran entrepreneurs and military spouses through training, mentorship, access to capital, preparation for opportunities in federal procurement and connections within commercial supply chains and disaster relief assistance.
Boots to Business Program
Managed by the SBA, Boots to Business provides veterans’ services and entrepreneurial training on how to start and grow a business with a special focus on the areas veterans need to consider most. The program is available for transitional military service members, and veteran spouses of both military, National Guard and Reserve as an in-person classroom course with follow-up online courses. Typically free of charge.
Hivers and Strivers
Hivers and Strivers, an Angel Investment Group, invests $250,000 to $1 million in start-ups founded and run by graduates of U.S. Military Academies. The group works closely with its network of investment partners to broker deals for the entrepreneurs when additional investments are needed.
Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE)
V-Wise is open to women veterans, active duty female service members and female partners and spouses of active service members and veterans that wish to start a business venture.
Sponsored by the SBA, V-Wise is a three-phase business training that trains women veterans on starting and growing businesses and provides great networking opportunities. The three-phases consist of:
- Phase 1 –online business training
- Phase 2 –conferences and learning materials
- Phase 3 – Access to financing services, mentorship, continuing education and building skills
Entrepreneurship Bootcamp for Veterans
The Entrepreneurship Bootcamp for Veterans (EBV) national program offers training in entrepreneurship and small business management to post-9/11 veterans and their families. The program's goal is to open the door to economic opportunity for our veterans and their families by helping them develop and sustain an entrepreneurial venture.
There are many options for small business loans. Let Kabbage Funding small business loans for veterans be the best choice for your business.
According to the SBA, there are a few qualifications you must meet In order to qualify for a veteran’s small business loan.
Your businesses must be owned and controlled by 51% or more by an individual one or more of the following areas:
- An honorably discharged Veteran;
- If you are a Service-Disabled Veteran;
- Or if you are a Active Duty Military service member and participate in the military’s Transition Assistance Program (TAP);
- If you are an active Reservists, National Guard Members; or
- You may also qualify if you are a current spouse of any Active Duty service member, Reservist or National Guard member, or if you are a widowed spouse.
There are many types of businesses that qualify for a veteran’s business loan. Basically, you can use the loan for any type of business debt, hiring new employees, expanding or opening a business at a new location, equipment loans, loans for working capital and acquisitions. There are a few restrictions that apply.