click for short video
A man from my workshop, “Financing Your Small Business” walked up to me afterwards in the parking lot. He lamented that he was told in a military retirement workshop to call the Small Business Administration, (SBA) and get a $25,000 loan no questions asked. He called the SBA and they told him that they didn’t know what he was talking about. Did I know anything about it?
No, I don’t know anything about it. I’ve checked with many reliable sources and there is no ‘no questions asked’ money for veterans. And by reliable, I don’t mean the internet because when I did an internet search on “free money for veterans” several links popped up. It would be a waste of time clicking on them.
It’s difficult for many veterans to transition to civilian life. I know because my father was a veteran of three wars, WWII, Korea and Vietnam and he always missed the military life. He was honored to put his life on the line for the U.S.A. during his military career but he felt under-appreciated or misunderstood by civilians.
While there’s no free money, there are people like me, who want to help veterans start, build and grow their own small business. Here are my actionable tips for you:
- Write a short business plan.
- Describe your target customer – Where do they live? – Why will they pay the price you ask for your product or service?
- Name your products or services (top 3 is fine)
- How much will you charge for them?
- How much do they cost to provide?
- How will you consistently deliver these valuable products or services?
- Start with determining how much cash you’ll need for a year.
- Improve or maintain your credit score
- Your credit score indicates your borrowing and repayment history. This is important for business because the higher the number (680+) the more likely you can borrow money which provides needed business funds.
- Your plan and your good credit score will help you determine the likelihood that your business is viable for 3+ years. At this point you should consider applying for a SBA Veteran’s Advantage Loan through a participating bank to provide start-up funding.
- The borrower pledges collateral and makes a personal guaranty that the loan will be repaid.
- The SBA doesn’t lend money; it encourages banks to lend money by believing in the veteran’s business plan and his/her personal guaranty.
- This ‘belief’ is in the form of an 85% guaranty for loans of $150,000 or less;
- 75% guaranty for loans greater than $150,000 (up to $3.75 million maximum guaranty)
- Participating lenders take the balance of the risk
The Veterans Advantage Loan has similar characteristics to the SBA’s 7(A) loan program and isn’t available at all banks. If you need help with writing your business plan and determining your cash needs I can help you either via coaching or consulting for you. Contact me at liz@moneynative.com.