Getting Started: The Benefits of Using SBA Loans to Start Your Business

Did you know that 7.5% of the U.S.’s 5.4 million businesses with employees are owned by entrepreneurial veterans? Many veterans return from service wanting to work for themselves, but are often turned down for small business loans by banks because of bad credit. However, banks are not your only option! As the number of veteran entrepreneurs continues to rapidly increase, the government has a program called the Veterans Advantage program, which helps get startup money in the hands of veterans.

As an entrepreneur-veteran, you actually have several advantageous options available to you if you choose to use an SBA loan to start your business. To support veterans and their spouses who want to start businesses, the U.S. Small Business Administration (SBA) implemented measures to ensure that a portion of small business loans goes to veterans.

Eligibility:

  • “All active military personnel, veterans, service-disabled veterans, and their current spouses or widows are eligible for these loans.” Reservists and National Guard are also eligible.
  • Individuals who have received a dishonorable discharge are not eligible.
  • You can qualify for the SBA Express Loan if you are active duty within 12 months of your separation, or are a retiree within 24 months of your retirement.
  • The business must be at least 51% veteran-owned.
  • Non-profits are not eligible. Only for-profit businesses.
  • The business cannot be a lending or gambling business, nor can it be a pyramid scheme.

This fiscal year, the SBA has foregone borrower upfront fees through the SBA Express program for up to $350,000! Even more, there is minimal paperwork with this option. Moreover, the SBA provides veterans with access to business counseling and training programs that can help veterans get the guidance they need to get a business up and running.

SBA 7(a) loans, on the other hand, ensure that you pay zero upfront fees for loans of $125,000 or less. These loans include both veterans and non-veterans. Also, you can borrow loans up to $5 million.

SBA 504 loans are used to finance much bigger projects. Think commercial real estate purchases, heavy equipment, and machinery, etc. With this option, you can borrow amounts up to $12,500,000.

Contact the Wilson Law Group

Attorney Jim Wilson has been in the business of helping businesses for years. As a veteran himself, he has a special dedication to helping veterans get their business up and running. This blog barely scratched the surface of all the legal nuances to borrowing from the SBA. Make sure that you have someone that you can trust guiding you through it all! Contact Jim Wilson at 804-864-5268 today!

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Wilson Law Group

Jim Wilson is the founder and principal attorney of the Wilson Law Group. For the past 25 years he has been combining legal dexterity with an entrepreneurial mindset to help aspiring and established business owners start, finance, buy, sell, and run their companies.

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