With Veteran’s Day and National Veterans Small Business Week occurring earlier this month, now is the right time to talk about alternative small business financing options available to U.S. armed services members. As featured on the popular television program “Shark Tank,” military veterans can make successful entrepreneurs and small business owners by applying the discipline, drive and determination learned on the battle field to the competitive world of business. The fact that 10% of all small businesses are launched by military veterans is evidence of this.
Securing Small Business Loans Can Be its Own Fight
Yet securing funding for any small business can be its own struggle for even the most trained and prepared soldiers. When applying for small business loans, banks will ask for your FICO score and for you to put something down as collateral. Chances are, if you just got back from deployment, you probably don’t have much in the way of assets. Even if you do, many banks want to see a long-term history of effectively running a business before they’ll issue a loan.
The SBA and Its Small Business Financing Options
The U.S. Small Business Administration does have programs available for veterans seeking small business finance yet they are limited regarding what they can offer and can take quite a lot of time. The SBA’s new Express Loan Program, which has offered zero or discount fees for veterans, may be worth pursuing. It was formed to provide a fast, three-day response time to loan applications. Other programs such as VetCap and Boots to Business provide training, workshops and other veteran business financing options.
The Option of Invoice Factoring for Veterans
Though not exclusive to military veterans, invoice factoring is a small business funding option that many are not aware of. It is not based on your credit score, your assets, your ability to sign over collateral, or even how many years’ experience you have running a business. Invoice factoring works by providing you with cash for your current invoices; it does this by assessing the trustworthiness of your clients. So if your clients have excellent credit, you likely qualify. If the federal government is your client, you can also apply for government contract financing. A significant number of military veteran small business owners’ work as government contractors.