Funding small business startup is a challenge for any entrepreneur.
(article continues below)
But it can be even more difficult for veterans who have been deployed overseas and have been unable to accumulate a small business nest egg through lucrative civilian employment.
There is a perception among many veteran entrepreneurs that the government offers significant funding in the form of veteran entrepreneur grants. Non-veteran entrepreneurs have a similar belief that the federal government has mounds of untapped grant money for small businesses. Unfortunately, it just isn't true. Business grants are few and far between, and the ones that are offered rarely (if ever) apply to small business startups.
The lack of veteran entrepreneur grants and business startup grants doesn't necessarily mean that you will be unable to fund your idea for a new business. It just means that you have to be a little more creative and resourceful in finding the funds you need to get your company off the ground.
- Restart grants. Many of the grant opportunities that are out there are designed to help veterans restart businesses that were interrupted by military service. In 2007, New Jersey earmarked $1 million for veterans/family emergencies and business restarts. Apart from the fact that the program was severely underfunded, it potentially offered veteran business owners small grants to reinvigorate or restart their businesses – provided the business already existed before deployment.
- Military Reservist Economic Injury Disaster Loan (SBA). The MREIDL program is more typical of the kinds of funding that are available to veteran entrepreneurs. Instead of a grant program, MREIDL is a low-interest, emergency loan program for small business owning reservists who have been called up to active duty. Loan proceeds must be used to meet working capital requirements and not living expenses or debt repayment.
- Patriot Express Pilot Loan Initiative (SBA). This is another Small Business Administration loan program that targets veteran entrepreneurs. Unlike other programs, its intended to fund vets who are trying to launch or expand small business. Loan limits are $500,000 and interest rates are set at the lowest levels available through the SBA.
- Other funding sources. In addition to the typical funding sources available to small business owners (commercial financing, friends & family members, investors) you might be able to take advantage of nonprofit programs designed to help veteran entrepreneurs. Contact the Veteran Affairs Bureau for more information.