Business Funds for Veterans
Sadly, veteran owned businesses are at an all-time low. Fifteen years ago veterans owned around 20 percent of all small businesses, but today that number has dwindled to about 12 percent. Consequently, the U.S. Congress, through the SBA, has approved several programs to help veterans become entrepreneurs.
Here are three of the most popular:
- Patriot Express Pilot Loan—This program is for all veterans and active-duty military people, including their spouses. However, this is a SBA “guaranteed” loan, which means the loan is made through a bank—thus requiring that you have a good credit history. Vets can borrow up to $500,000 with 85 percent of their loan guaranteed by the SBA. And since it is an “Express” loan, you will know within one day if you are approved. For more information, call your local SBA office or visit http://www.sba.gov/vets
- Military Reservist Economic Injury Disaster Loan—This special loan is for the small business that has a key employee, or the owner, called up for active duty. The concept is to loan the business additional operating money to help it either get through the period of absence, or recover from the temporary loss of a key individual. You have a year after the return of the key employee to apply for the loan, or you can apply immediately upon the notice of call-up (a good idea if it is the business owner). For more information, call your local SBA office or visit http://www.sba.gov/vets
- Veterans Transition Franchise Initiative—This is not a loan program; it is a government-sponsored program that gives ten to 20 percent off franchise fees at almost 400 different franchising companies. This program works well for the vet who either has the additional money, or can raise it, to cover the remainder of the franchise fee, plus any operating capital requirements, and who prefers to work within the structured franchise model. For more information, visit http://www.vetfran.com
These are special programs set up to help veterans returning from active duty, or while on active duty, so don’t hesitate to take advantage of them if entrepreneurship is in your future.
Veteran Owned Small Businesses Shorted
Congress authorized the creation of a non-profit corporation (National Veterans Business Development Corp.) to help veterans start or grow small businesses–and provided $17 million taxpayer dollars to the corporation since 2001. Interestingly (but not surprisingly), only 15 percent of the funding has been spent on business resource centers that are supposed to provide business assistance services to veterans. This is what a recent report from the Senate Small Business and Entrepreneurship Committee is telling us.
It gets better. The report found that the corporation wasted money on excessive compensation for executives, on expensive dinners for employees at high-priced restaurants in Washington, and on questionable charges on company-issued credit cards. The compensation for the top two executives in fiscal 2007 ate up 22 percent of the funding for that year–more than was spent on the business centers. Does any of this sound familiar?
Senators John Kerry, D-Mass., and Olympia Snowe, R-Maine, are now recommending that no more money go to the corporation. Instead, they want any future federal money, to assist veterans in small business, to go to the Small Business Administration’s Office of Veterans Business Development.
Unfortunately, this seems to be the way our government operates when they dabble in the private sector. I shudder to think what will happen if our government nationalizes our banking system.
Maybe our elected representatives would like (or not) to hear what we think about this waste of money, and how they need to better support small business–especially veteran-owned businesses–to get our economy back on track. What do you think?
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