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NGExpert financial copywriter
Page written by Chris Godfrey. Last reviewed on April 12, 2024. Next review due October 1, 2025.
Starting or expanding their own small business is a favorite choice for many veterans when they leave the military. However, with little time in business, low or no revenues, and credit that may have been disrupted by time spent overseas, veterans often discover that getting a business loan can be very tough.
Fortunately, there’s a solution to this problem – small business grants. Unlike business loans, grants are free money – they do not need to be repaid – and credit scores and many of the usual requirements of commercial financing do not apply.
Veterans seeking a business grant should expect a lengthy application process, typically needing to meet strict guidelines, timelines and other qualifying criteria. Additionally, they should be aware that competition for this type of funding is competitive and even if they do qualify, the award sum may be small, requiring them to seek additional finance.
Many business grants are tied to specific goals – entrepreneurial, educational, creative and motivational – and selection committees have full control of the award process and the sums distributed. As well as meeting each program’s rules of eligibility, veterans will usually need a strong business plan that includes a feasibility study and an indication of how they intend to keep the venture going in the post-grant period.
There are many types of business grants for veterans. Award sums, qualifying criteria and selection committee objectives vary from source to source.
The Second Service Foundation offers the Military Entrepreneur Challenge. This is a nationwide grant program that gives veteran, military spouse, and Gold Star Family entrepreneurs the opportunity to network, learn, and compete for capital to grow their small business. Applicants pitch their business ideas to a live audience for a chance to win a small business grant. Award sums vary by location.
Warrior Rising is a free, one-stop shop for veterans seeking to launch or grow their business. The program’s six-step module provides entrepreneurial education, training, coaching and mentorship, plus potential access to clients, investors and funding opportunities. To qualify, you must be a veteran or immediate family member and complete an application. Warrior Rising accepts applications from startups and established businesses.
Open to food businesses that are at least 51% owned by someone who is either Black, Indigenous, Latinx, LGBTQ+, a military veteran, person with disability or a formerly incarcerated individual, the Feed the Soul’s Restaurant Business Development Grant aims to level the playing field for veteran hospitality business owners. Program participants may receive six months of consultations and educational training services, a financial stipend, and training to help you process and maintain your business.
The Chicagoland Job Creators Grant program provides $100,000 in funding for 25 small businesses. To be eligible, your business must be based in Illinois with a founder who identifies as either Black, Asian, female, LGBTQ+, military veteran, or located in a low to moderate Income area. Your business must also be for-profit, have revenues of between $100,000 and $5 million, and more than 2 employees. You will also need to show that you can create an additional 1 or 2 premium minimum-wage jobs in the next 12 months.
FedEx operate an annual prize competition for small business owners. Although the program is not specifically targeted to veterans, they are eligible to participate – all you need is a US-based business that’s been in operation for six months plus a FedEx business account that’s also at least six months old. Program participants must produce a presentation that reveals how a grant award could boost their business. Ten winners share a total prize pool of $230,000 – with a $50k first prize and nine x $20k prizes for the runners-up. All ten winners also get free access to a range of FedEx small business services.
The Farmer Veteran Fellowship Fund is a grant program that helps veterans who are in their beginning years of farming or ranching. The Fund does not give money directly to the veteran, but to third-party vendors to pay for items the veteran needs to support the launch of their farm business. Awards range from $1,000 to $5,000. You will need a strong business plan and must provide proof of service to apply.
Managed by the Grand Valley State University, the Michigan Veteran Entrepreneur-Lab is a free three months business accelerator for veterans and military spouses. The program provides hands-on startup education as well as the opportunity to enter the program’s Pitch Showcase, where you can present your business ideas to win a cash prize of up to $20,000.
If you are a female veteran in Texas who is starting or currently owns an existing business, you may qualify for TWU’s Veteran Woman Entrepreneur Grant program. Five grants of $5,000 each are awarded to qualified Texas women veterans per year, with the grant program aimed specifically at helping veterans and open to women entrepreneurs throughout Texas.
To qualify, you must operate or intend to operate a Texas-based business that is at least 51% directly owned and controlled by one or more veteran women who are US citizens or US permanent residents. Your business must be a for-profit corporation, partnership, LLP or LLC, or sole proprietorship.
Veterans who work for themselves may be eligible for a National Association for the Self-Employed (NASE) business growth grant of up to $4,000. Since 2006, nearly $1 million has been awarded through the program, with grants used for marketing, advertising, hiring employees, expanding facilities and other specific business needs. Note that you must be a member of NASE to apply for a grant. (Membership fees may be applicable).
Overseen by the US Small Business Administration (SBA), the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs encourage US small businesses to engage in Federal Research and Research and Development initiatives. Almost a dozen federal agencies list grant opportunities on the SBIR website. Funding amounts vary based on the individual grant. To be eligible, your business must be a US-based for-profit entity with less than 500 employees.
Similar to its Illinois sister program, the Southern California Job Creators Grant program also provides $100,000 in funding for 25 small businesses. To be eligible, your business must be based in Southern California with a founder who identifies as either Black, Asian, female, LGBTQIA+, Military Veteran, or located in a low to moderate Income area. Your business must also be for-profit, have revenues of between $100,000 and $5 million, and more than 2 employees. You will also need to show that you can create an additional 1 or 2 premium minimum-wage jobs in the next 12 months.
The Beyond Open Small Business Grant Program is a competitive small business program focused on diverse-owned small businesses – veterans, minorities, women, LGBTQ+ individuals and individuals with disabilities. Over three rounds, $15 million in grants are awarded per year, with dozens of businesses winning awards starting at $10,000. Winners use the funds to buy capital assets such as equipment, technology and real estate. To be eligible, your business must be based in Charlotte, NC.
There are more ways than one for veterans to fund their operation. Business loans can fill the gap if your grant award is too small or if your grant application was not approved:
The most common type of commercial loan. Borrow up to $5 million. You receive a single, lump-sum cash injection and then pay it back in regular instalments over a fixed period of up to 25 years. Collateral may be required.
A business loan that functions like a high-value credit card. Withdraw as much as you want when you want from a loan facility up to the limit of your borrowing. Interest rates are usually fixed, and you may repay on a set or flexible schedule. Collateral may be required.
Also known as account receivables financing. Borrow against the value of your unpaid invoices. The lender will usually provide up to 95% of the invoice value within a few days or even hours of the bill being raised. Your invoices act as security for the loan, no added collateral required.
Equipment loans use the asset you’re financing as security – so no added collateral is required. You use the equipment as you pay for it and the lender maintains a lien on the machinery. Once you pay the loan back, the lender releases the lien, and you own the equipment outright.
For small and medium-sized veteran-owned businesses, an SBA 7a loan, SBA express loan or SBA microloan may provide the financing you need:
SBA 7a business loans are backed by the US Government up to 85% of loan value and can provide up to $5million to qualifying borrowers with repayment terms as long as 25 years. SBA loans usually come with much lower interest rates and fees than other commercial lending, but meeting the SBA’s strict rules of eligibility can be tough. Veterans will typically need to have been in business for at least four years and have annual revenues over $180,000. Your personal credit score must be at least 680. Collateral may be required.
SBA express loans are a faster alternative to the standard 7a loan program. Offered by the same pool of lenders, express loans can give veterans up to $500,000 to support their business and you will usually get a ‘yes/no’ indication within 36 hours of making your application. Note that interest rates and fees are typically higher with express loans than their 7a counterparts. Collateral may be required.
Nonprofit and community-based lenders can provide SBA Microloans to veterans who may struggle to secure standard business financing. Available up to $50,000, SBA microloans also come with more relaxed qualifying rules and can usually be secured with FICO scores as low as 500, or even with no credit score at all. Be aware that these type of business loans often require a personal guarantee that makes you personally responsible for the debt.
Working with business finance experts can make all the difference when applying for grant funding. Contact Swoop to discuss your borrowing needs, get help with your application and to compare top quality grants and business loans from a choice of providers. Give your business the boost it deserves. Register with Swoop today.
Written by
Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.
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