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In 2021, the total number of military veterans in the United States reached 19 million. Most veterans are from the Gulf War era, and nearly 73 percent are aged 50+. Veterans only account for roughly seven percent of the current population. In 1980, the percentage reached 18 percent of the population.
In most cases, the adjustment period for veterans re-entering civilian life can be challenging. Roughly 48 percent of post-9/11 veterans said that readjusting to civilian life was either somewhat (32 percent) or very (16 percent) difficult for them. It can be challenging for veterans to relate to people that could never understand their military experiences.
Another major obstacle in the transition is that it can be difficult for many vets to find a job. Converting war-time skills into peace-team jobs in the private sector doesn’t always work. But in typical military fashion: when the going gets tough, the tough get going. A recent surge of veterans has decided to use their unique qualities to create their own jobs.
What types of business loans are best for veterans?
Starting a new business can be a challenge for anyone, and getting in over your head is easy. Fortunately for veteran entrepreneurs, their service to their country has earned them an additional step up from the competition.
Several types of business financing options are available exclusively for veteran business owners. Using these services is easy to secure the funding you need to start your veteran-owned small business plan. Even better, they typically come with the least amount of strings attached.
One of the best places to start your search for financial aid is the U.S. Small Business Administration (SBA). Several types of business loan options are aimed at helping veteran small business owners. However, the best one of these programs is easily the SBA Veterans Advantage Program.
The SBA offers all small-business owners and entrepreneurs a business loan called the SBA 7(a). The Obama administration initiated the Veterans Advantage Program in 2014 to offer fee relief for veterans seeking this type of loan application.
The program is only available for active duty military service members, honorably discharged veterans, service-disabled veterans, reservists, or the spouse/widow of any veteran meeting the previous criteria.
The primary benefit of the Veterans Advantage Program is that it can significantly reduce the upfront guaranty fees of loans. The exact discount will depend on the amount of the loan and a few other factors:
- Any loan that’s $150,000 or less or an SBA Express Loan will have a guarantee fee of $0.
- Any non-SBA Express Loan between $150,001 and $500,000 will be 50 percent less than the guarantee fee for non-veteran-owned businesses. Loans with a maturity over 12 months will have a 1.5 percent fee of the guaranteed portion, and loans with a maturity of fewer than 12 months will have a 0.125 percent fee.
- Any loan between $500,001 and $700,000 with a maturity over 12 months will have a guarantee fee of 3 percent.
- Any loan between $700,001 and $1,000,000 with a maturity over 12 months will have a guarantee fee of 3.5 percent.
- Any loan between $1,000,001 and $5,000,000 with a maturity over 12 months will have a guarantee fee of 3.75 percent.
- Any loan that’s between $500,001 and $5,000,000 with a maturity of fewer than 12 months will have a guarantee fee of 0.25 percent.
The 4 best small business loans for veterans:
In addition to the Veterans Advantage Program mentioned above, you’ll also have the option of taking out specialized business loans. Many traditional banks and credit unions offer small business loans crafted explicitly for veterans. These are the best four business loan programs currently available to veteran borrowers:
Navy Federal Credit Union
Finding the right loan can help you grow your business more easily
There are many different programs designed to help veterans get their businesses started. These various programs and grants are an excellent first step, but sometimes they might not be enough. If you need to take out a business loan, the list above includes the best business loans available.
As a veteran, you have specific core values that can help you succeed as an entrepreneur. Don’t let financial issues prevent you from establishing your own business. Far too many beneficial programs are available for you to give up on your dream.
For more information about loans and other business topics, check out our other great content on Entrepreneur.com.
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