By Peter S. Gaytan
Here’s a very interesting statistic: The success rate of veteran-owned businesses is higher than for those owned by non-veterans. The skills, dedication, creativity and perseverance learned in military service translate into making veterans successful entrepreneurs. “Veteran-owned businesses make significant contributions to the economy and because of the unique technical and leadership skills they acquire through military service, they [veterans] can become successful entrepreneurs,” says Steven C. Preston, former Administrator for the Small Business Administration
(SBA), a Federal agency, and currently President and CEO of Oakleaf Waste Management.
Small businesses are the mainstay of the American economy.
- - Nine out of ten businesses are small firms.
- - They produce approximately half of the U.S. Gross National Product.
- - Over one-half of the nation’s workforce is employed by small businesses.
Veteran-owned small businesses are a critical component of our economy. Some of these businesses are high-tech global corporations – and some are home-based sole proprietorships.
- - Veterans own more than 14% of businesses in America.
- - There are more than 4 million veterans who own small businesses
- - Service-connected disabled veterans own more than 235,000 of these small businesses.
The SBA guarantees more than $1 billion annually in loans for veteran-owned businesses. This is good for individual veterans who are looking for help to kickstart their businesses, but it’s also good for our nation’s economy. Small businesses are responsible for 60-80 percent of new jobs, helping to reduce unemployment.
The SBA Office of Veterans’ Business Development is a key contact for veterans who need to learn the mechanics of starting, sustaining, and growing a small business. This agency provides distance-learning education in how to start – and expand – your own business, as well as training in finance, accounting, and contracting. There are Veterans Business Development Officers in the SBA District Offices in every state and territory throughout the nation.
The Veterans Business Outreach Program (VBOP) can help you build a business from scratch. At Veterans Business Outreach Centers (VBOC) you can find workshops to help you plan and build a business. Some of the classes include:
- Pre-Business Plan Workshops: this class focuses on self-employment issues you need to address before you even begin developing a plan for your own business. Each client has the opportunity to work directly with a business counselor.
- Concept Assessments: This class helps you assess the needs and requirements of an entrepreneur.
Business Plan Preparations: A good business plan is the foundation of success. At VBOCs, you will find help developing a five-year business plan. It will include the legal form of the business, equipment requirements and cost, organizational structure,
- strategic plan, market analysis, and a detailed financial plan, including financial projections, budget projects, and funding requirements.
- Comprehensive Feasibility Analysis: VBOC counselors will analyze your business plan, identify the strengths and weaknesses, and help revise the strategic planning portions of your business plan.
- Entrepreneurial Training and Counseling: These programs are targeted to address the needs and concerns of service-disabled veterans who want to start their own businesses.
- Mentorship: VBOC counselors make on-site visits to veteran-owned businesses to ensure that they are sticking to their business plan. VBOCs can also review monthly financial statements of veteran-owned businesses to see if the business plan needs to be revised or adjusted.
VBOCs can also provide help in training for international trade, franchising, Internet marketing, and accounting.
Loans for Veteran-Owned Small Businesses
Many small entrepreneurs apply for SBA loans to start their businesses. Veterans should consider applying for Patriot Express Loans, specially-designated, streamlined financing with enhanced guarantee and interest rates for eligible veteran entrepreneurs. The advantage of these loans is that lenders may not charge more than 2.25% over Prime for loans of less than 7 years and 2.75% over Prime for loans greater than 7 years. Lenders may charge 1% more for loans of $50,000 or less and 2% more for loans of $25,000 or less. Contact your local SBA office for more details.
To be eligible for a Patriot Express Loan, you must meet SBA eligibility rules and the business must be 51% or more owned/controlled by:
- Veteran(s) (other than dishonorably discharged)
- Service-disabled veterans
- Active Duty Military potential retiree within 24 months of separation and discharging Active Duty member within 12 months of discharge (TAP eligible)
- Reservist and National Guard servicemember
- Current spouse of above or spouse of service member or veteran who died of a service-connected disability.
There are limitations on the types of businesses these loans can finance. Among those businesses NOT eligible for Patriot Express financing are: agricultural and farm businesses; fishing and shore operations (including commercial fishing activities and the construction of new fishing vessels); medical facilities involving any type of
extended care/assisted living situation; mines; applicants with operations, facilities, or offices located overseas (other than those strictly associated with the marketing and/or distribution of products exported from the U.S.); businesses engaged in teaching, instructing, counseling or indoctrinating religion or religious beliefs; businesses that sell products, services, or presentation of any depiction or display of a prurient sexual nature or that presents any live performances of a prurient nature.
If You Already Own A Business
The SBA is a good resource to help you grow your business. There are programs to help you sell goods and services to the government, free or low-cost online training, business counseling, and specialized financing initiatives. You can get assistance in obtaining SBA financing for:
- Patriot Express Loans up to $500,000;
- major fixed-asset loans to purchase land and buildings;
- surety bond guarantees for construction contractors who are veterans;
- equity financing matching venture capitalists with veteran-owned small businesses;
- export assistance programs to help veteran-owned businesses become part of the global economy.
Peter S. Gaytan is the author of For Service To Your Country – Updated Edition: The Essential Guide to Getting the Veterans’ Benefits You’ve Earned (Citadel, 2011), available from Amazon, Barnes and Noble, and other booksellers. He has served as an advocate in securing and protecting the earned benefits of America’s veterans for more than a decade. Gaytan is the Executive Director of the American Legion, the largest veterans service organization in America.
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