If you are a veteran who is wanting to open a small business but don’t have the capital to self fund then the SBA has a specific loan program which is geared towards helping veterans acquire the initial capital that is needed to open their business or help it to grow.
This is done through the Veterans Advantage Program which has been designed with veterans in mind by providing plenty of support for them to benefit their local communities.
In a bid to encourage more veterans to open their own businesses, the Veterans Advantage Program has a few reductions in terms of the fees involved. In this guide, we’ll be taking you through everything you need to know about the Veterans Advantage Program from what is included with the program as well as the minimum requirements needed to be approved.
What is included in the Veterans Advantage Program?
What is so beneficial about the Veterans Advantage Program is that it is not just about providing the capital and reduced fees.
The SBA appreciates that not all veterans may have the experience or know-how that goes into running a business so they have a program in place where they can offer training courses online as well as counseling to ensure that the veteran is prepared to submit their application and get a better chance of being approved for their loan.
The reason why the SBA has designed such a dedicated program is to help reduce the societal barriers that prevent veterans from accessing capital. In turn, this allows the veterans to open a business that benefits their lifestyle as well as generating more jobs for the local community.
Although the Veterans Advantage Program is all about bringing inclusivity by providing financial access for veterans in business, there are basic requirements that have to be met in order to quality. This means that before filling in your application, you have to make sure that you are eligible in order to prevent any disappointment while ensuring that you are as prepared as possible.
In order to qualify for the Veterans Advantage Program, the business has to be majority owned by an individual or group of individuals who are among the following:
- Honorably Discharged Veteran or Veterans
The most common applicant for this program comes from honorably discharged veteran or veterans who are wanting to make a career change on their return to the US.
- Active Reservist or Active National Guard Member
If you are an Active Reservist or an Active National Guard Member, you can also apply for this program. This is because when you are not on active duty, you’ll be able to spend the rest of your time developing your business. This is ideal if you want to ensure that you have a business to come back to once you have been discharged.
- Active Duty Military Service Members
Those who are an Active Duty Military Service Member and a member of the Transition Assistance Program may also apply for the Veterans Advantage Program.
This is because the Transition Assistance Program is all about helping veterans by providing them with the tools they need to help them integrate back into society on their return. Therefore, those who have always wanted to open a business should take advantage of both programs.
- Current spouse of any veteran
The great thing about the Veterans Advantage Program is that it is not just for those who serve in the military but for their spouses as well. Naturally, the spouse’s life is also affected by the veteran lifestyle so the SBA has ensured that they are eligible for the same support.
If you are a current spouse of any active duty service member, national guard member, reservist or veteran and have wanted to open your own business, this can be a great route for you to take.
- Widowed spouse
For those who have sadly lost their spouse while they were in service or have passed due to a service related disability or injury, they are also able to apply for the Veterans Advantage Program. If you are a widowed spouse and wanting to have a change in career then the Veterans Advantage Program is available to provide that support.
Facts on the different loan programs available
In this guide, we’ve been discussing the Veterans Advantage Program but it’s important to understand how it compares to the other options available for veterans. Here is a run down on some of the basic figures and upfront guarantee fee costs:
- Loans up to $150,000
The Veterans Advantage Program can provide loans up to a total of $150,000 with an upfront guarantee fee of zero.
- SBA Express Loan Program
The SBA Express Loan Program can provide loans that have an upfront guarantee fee cost of zero.
- Non-SBA Express Loan Program
If you choose to go down the Non-SBA Express Loan Program route then bear in mind that there is a 50% discount on the upfront guarantee fee cost for any loans between $150,001 and $500,000 with the maturity period determining the fee percentage of the guaranteed amount.
If your loan has a maturity period that is over 12 months then the total fee will be around 1.5% of the guaranteed amount. This fee percentage drops to 0.125% of the guaranteed amount for loans that have a maturity period that is less than 12 months.