Small Business Loans for Veterans
The veteran owned business employs around 5.8 million employees in the USA, marking their tremendous impact on their economy. The military service affects the overall number of small businesses as 45% of its veterans are more likely to be self-employed, resulting in other individuals’ employment. It shows just how much these veterans need small loans to fund their businesses.
What is a Small Business Loan for Veterans?
Small business loans are partially guaranteed by the Small Business Administration instead of the Veterans Association, VA. Financial institutions like credit unions or banks are also vital players in the making of VA loans.
Three Types of Small Business Loans for Veterans
SBA Standard 7(a) Loan Program
The SBA standard 7(a) loan program is the most common program among veterans in the USA. They can grant loans worth up to $5 million provided the recipient pays a fee to guarantee the loan. To access this loan type, you must have a good credit score and have run your business for at least two years with excellent cash flow generation.
Military Reservist Economic Injury Disaster Loan
The MREIDL is another loan type available focusing on veteran owned business across the United States. It is explicit to help companies that could have continued to meet their targets if it was not for the military service calling up the principal owner by providing working capital. The Military Reservist Economic Injury Disaster Loan offers continuous assistance to these businesses until the employee returns from the service.
This program serves the few businesses that are denied loans by other categories of financing. The interest rates regarding these loans are around 8% and 13%, and the maximum amount granted is $50,000 with collateral as a requirement. Written business plans, personal credit reports, and articles of incorporation are some of the documentation required for a business to qualify.
Each type of SBA loan covers different business needs. Other financing sources for veterans, such as grants and contracts, also create adequate financial assistance in a veteran owned business. Contact Advanced Commercial Capital LLC for a deeper engagement regarding financial aid on small business loans for veterans.