Life after active military service can be hectic and confusing to most veterans. This can, however, be easy when one starts a small business or seeks to invest in an already established business. The challenge comes with raising the capital needed for a veteran-owned business. Securing small business loans makes the process easier, but only when you understand how and where to find the loans.
Types of Business Loans for Veterans
Standard 7(a) Loans
You can benefit from 7(a) SBA loans as the aim is to help a veteran-owned business pick up and develop in the community. With this type of loan, you can get up to a maximum amount of $5 million, making it possible to establish a functional and productive business. You can effectively invest in real estate or as working capital.
Military Reservist Economic Injury Disaster Loans (MREIDL)
As a business owner who returns to active service duty, you can successfully apply for a military reservist economic injury disaster loan and have an easy time as a veteran in the civilian world. You will get the financial assistance to help you have an additional cash flow as soon as you are back from active duty. You can enjoy the benefits of up to $2 million when you consider this program. There is a fixed interest rate of 4%, making it easier to repay.
Seeking microloans is another option that you can consider to finance your small business as a veteran. A microloan is essential to a veteran-owned business, especially if you, as the owner, failed to secure other loans from available lenders in the market. You should, however, note that the interest rates for microloans are much higher at 8% to 13% compared to others loan options. You should also prepare to handle heavy paperwork and collateral to service and secure microloans.
You should note that to secure a loan as a veteran, you should be operating at a profit, engaged in, or propose to do business in U.S. territories and have exhausted alternative financial resources. Meeting this criterion increases your chances as a veteran to meet your objectives. For more guidance on business loans for veterans, get in touch with Monument Capital Solutions and meet your goals.