Entrepreneurship is one of the best ways to stave off economic downturns since it allows you to be your own boss. Even better, the federal government (basically, the We the People) have determined that the very special military service-persons who protect our country should be in line to receive benefits in this regard. To this end, the VA Small Business Loan program of the SBA has several options exclusively for veterans of the Armed Forces. This extends to spouses, widows, and active-duty members.
The Standard Federal Loan for Veteran Owned Business
Starting at the first rung of the ladder, there are the so-called Standard 7(a) loan options. As is the case with all the other options, the federal government links up directly with an approved lender to function as a guarantor/cosigner for the loan, which means you will not only receive the best interest rates possible (surpassing even those of the multinational corporations, in many instances), but the government will pay the lion’s share of the loan if you default.
The Standard 7(a) loan terms include a max of $5 million awarded to entrepreneurs of a veteran-owned business, as well as up to 85% of this guaranteed if you default. You will benefit from significantly lower monthly payments as a result of the creditworthiness possessed by the United States government.
Another Option for the Veteran Owned Business: the MREIDL
The MREIDL is an acronym for the Military Reservist Economic Injury Disaster Loan. If you are an active duty member who had to return to the battlefield, and your business suffered proven losses as a result, you may be in line to receive this. Here are the terms: the loan is good for up to $2 million at an interest rate of just 4%, with a 30-year repayment term. Although collateral is a part of the deal, this kicks in for loan amounts above $50,000 and you won’t be declined if you can’t afford this.
For more information on loans for veteran-owned businesses, and finance topics in general, don’t hesitate to drop us a line at the Growth Capital Team – our experts have collective decades’ worth of experience in business administration and finance.