5 Grants Your Veteran-Owned Small Business Or Startup Could Get In 2021
Many veterans that have spent their lives protecting our nation and our freedom also own and operate small businesses. According to a Small Business Administration study, there are 2.4 million veteran-owned businesses in the U.S. These veteran business owners continue to give back to the nation by providing jobs to 5.8 million employees.
Like any other small business owners, veterans face financial hardships on the path to entrepreneurship. Emergency expenses, cash flow shortages, and expansion are just a few situations where a business might need extra capital. Veteran-owned businesses may face even more financial challenges – for example, if a reservist that also owns a small business is suddenly deployed, money, time, and resources may become scarce quickly. While your incoming revenue should cover most of your expenses in theory, there will always be times when the current cash flow situation just isn’t enough.
If you’re a veteran who runs your own business and are facing a financial challenge, there are options available to you. One of the best options? Grants for veteran-owned businesses. With a veteran business grant, you can receive money to fund startup costs, pay for the research and development of new products, or support your established business. Best of all, grants don’t have to be repaid.
This is essentially free money for veterans.
What’s the catch? Obtaining a business grant is difficult for many business owners. You may not know where to even begin to find these grants for veterans, and once you find them, the application process can be confusing. You may also find the competition extremely stiff. Not only do you have to be a veteran to qualify for these grants, but you may also have to meet additional requirements, including the location of your business, the industry you’re in, and your time in business.
Veteran business grants are available through the federal government, nonprofit organizations, and even corporations.
However, just because it’s difficult to receive one of these grants for veterans doesn’t mean it’s impossible. The first step is to understand what grants are available to you, learn the requirements, and move through the application process. In this article, we’ll explore the best grant options available to veterans, how to find your own grants, and other financial options available for your business.
Ready to move one step closer to getting the business funding you need? Let’s get started!
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- Submission dates: Watch the website for announcements.
- Entry requirements: Open to active duty members of armed forces who are at least 21 years old own at least 51% of the business, or qualifying spouse, child, or immediate family member.
- Website: streetsharesfoundation.org/the-veteran-small-business-award
As of 2019, the StreetShares Foundation awards grants to three winners. First place receives $15,000, second place receives $6,000, and third place wins $4,000. To be eligible for the grant, all applicants must view educational content through StreetShares. Once qualifying content has been downloaded or viewed, the application is available. Applicants must write a summary of their business and submit a video. The Foundation will choose up to 10 finalists whose businesses will be presented to the public and put to a vote to determine the winners.
2. National Association For The Self-Employed Growth Grants
- Submission dates: Applications are reviewed quarterly.
- Entry requirements: You must be a member of NASE ($99 fee for veterans)
- Website: nase.org/become-a-member/member-benefits/business-resources/growth-grants
For businesses with smaller capital needs, the National Association for the Self-Employed Growth Grant provides small grants up to $4,000. Like other grants, the funds must be used for a specific purpose, such as purchasing equipment or hiring new employees. Applications are reviewed quarterly and awards up to $4,000 are distributed monthly. To qualify, you must submit an application outlining your business need and providing details of how you will use the grant to fund this need.
3. FedEx Small Business Grant Program
- Submission dates: Entry period begins in February
- Entry requirements: Must be for-profit and U.S.-based with fewer than 99 employees. Must have been in business for at least 6 months.
- Website: www.fedex.com/en-us/small-business/grant-contest.htmlnase.org/become-a-member/member-benefits/business-resources/growth-grants
The FedEx Small Business Grant program has awarded over $500,000 in grants since its launch in 2013. In 2019, FedEx awarded 10 prizes to small business owners. One winner received $50,000 plus $7,500 in FedEx print and business services. One winner received the Silver prize of $30,000 plus $5,000 in FedEx print and business services. Eight winners took home Bronze prizes, each receiving $15,000 plus $1,000 in FedEx print and business services. Winners may also receive additional prize packages, including website audits and design and social media workshops.
4. USDA Rural Business Enterprise Grant Program
- Submission dates: Ongoing
- Entry requirements: Must have fewer than 50 employees and less than $1 million in annual revenue.
- Website: rd.usda.gov/page/state-offices
Through the United States Department of Agriculture, eligible small businesses can receive grants from $10,000 to $500,000. To qualify, you don’t have to be in the agriculture industry, but your business must be located in an eligible rural area. All applicants can apply for the grant through their USDA Rural Development state office.
- Submission dates: Ongoing
- Entry requirements: Must be a veteran interested in owning a franchise.
- Website: www.vetfran.org
If you’re interested in opening a franchise, look into the resources offered through VetFran. Among these resources are videos, links to Small Business Administration loans and resources, and publications focused on owning a franchise. One of the best resources offered through VetFran is discounted franchise fees for qualified military veterans. VetFran is partnered with over 600 franchises, including 7Eleven, Arby’s Choice Hotels, and Cinnabon. While traditional small business grants aren’t offered, these member franchises offer discounts that could save military vets thousands of dollars in initial costs.
Other Business Grant Resources For Veterans
Whether you don’t qualify for a grant program or have greater financial needs than a grant can cover, there are more financing options available for your business. The Small Business Administration and StreetShares stand out by offering low-cost loan options to veteran-owned businesses just like yours.
If you’ve missed the deadline for applying for the grants discussed in this article, don’t qualify, or are looking for more grant opportunities, there are additional resources you can use to find your own grants.
To find federal grant opportunities, check out Grants.gov. This searchable database of federal grants is easy to use. Through this website, you can search and apply for grants, use the educational resources to learn more about grants, and even track your submissions. A mobile app is now available for Android and iPhone, making it easy for you to search for grants on the go.
Another great resource is the SCORE Association. This nonprofit agency has counselors and mentors located nationwide. These volunteers can not only point you toward national and local grants but also provide free business advice for starting or building your business. You can participate in online workshops as well, and take advantage of the other free resources available to small business owners.
VA SBA Loans
SBA loans have developed a reputation among small business owners for their low-interest rates and great terms. Rates and terms are comparable to those offered by bank and credit union loans. The best part, though, is that even if you don’t qualify for traditional loan options, you may still receive an SBA loan. This is because these loans are backed by the government in amounts up to 85%, taking some of the risks away from the intermediary lender. What does this mean for you? Your small business can still be approved for an affordable loan, even if you’ve been turned down by other lenders.
You may also qualify for other SBA loan options not specific to veterans. For example, if you need capital for your startup costs, you can apply for SBA microloans up to $50,000 through an SBA-approved nonprofit lender.
SBA 7(a) Loans
One of the most popular loan options is the SBA 7(a) program. Through this program, you can receive up to $5 million for nearly any business purpose. The SBA sets the interest rates at the prime rate plus a maximum markup of 4.75%, so these loans are extremely affordable.
SBA Veterans Advantage
For military veterans, the SBA Veterans Advantage program is available. Through this program, you’ll receive the same high borrowing limits and low rates and terms of the 7(a) loan, with the added advantage of reduced guarantee fees.
To qualify for the SBA Veterans Advantage loan, your business must be a veteran-owned business that is considered a small business based on the SBA’s definition. You must demonstrate the ability to repay the loan and meet all criteria for receiving an SBA loan, including personal credit score requirements.
Military Reservist Economic Injury Disaster Loan
If you’re a military reservist or are in the National Guard, a deployment can throw your business off track. You shouldn’t have to worry about a pile of expenses that pose a threat to your business when you go on active duty. Luckily, the SBA has a financial solution.
The Military Reservist Economic Injury Disaster Loan Program provides loans up to $2 million for military reservists or National Guard members during or immediately following deployment. Under this program, you can receive a loan with interest rates set at 4% and repayment terms up to 30 years. Loan proceeds can be used to cover operating costs but can’t be used to refinance debt, expand a business, or cover lost income or profits.
Veterans who are business owners may be able to get preferential treatment when it comes to the awarding of government contracts. Additionally, programs like the VA’s Vets First Contracting Program and the SBA’s Service-Disabled Veteran-owned Small Business Concern Program can help qualifying veterans land lucrative government contracts.
While not specific to veterans, business startups often struggle to find funding in their early phases of development. One workaround is to utilize business crowdfunding. The principle is similar to what you may have encountered with crowdfunding companies that fund retail goods (like Kickstarter), but instead of a product, you’re funding a business through equity or a crowdsourced loan.
We already touched on StreetShares earlier when discussing grants. However, if you missed the deadline to apply, don’t want to go through the hassle of applying for the program, or don’t qualify, StreetShares has traditional financing options for your business.
StreetShares was founded by veterans and was originally targeted only toward veterans. Today, however, any qualifying business owner can apply for StreetShares financing. There are some special concessions made for veteran-owned businesses, which we’ll discuss in detail a bit later.
You can apply for a StreetShares installment loan of up to $250,000 to be repaid over 3 to 36 months. The interest rates for these loans are around 6% to 14%.
If a flexible line of credit better fits your financial needs, StreetShares offers those, too. You can apply for a line of credit of up to $250,000 with repayment terms of 3 to 36 months. Interest rates are around 6% to 14% for a StreetShares line of credit.
To qualify for a loan or line of credit, you must be in business for at least 2 years. However, some businesses may qualify with a time in business as short as six months. You must also have a minimum personal credit score of 620. However, if you’re a veteran, this score requirement is lowered to 600. You must also have an annual business revenue of $100,000.
If you have federal, state, or commercial contracts, you could also qualify for contract financing. You can receive up to 90% of your contract in advance by paying a factor fee. You can apply for contract financing in addition to an installment loan or line of credit.
Business Loans For Veterans
StreetShares is particularly focused on serving veterans, but they aren’t your only option. If you don’t have time to pursue a veteran business grant or are having difficulty getting one, you may want to look at getting a business loan.
- The Best Small Business Loans For Veterans
- SBA Loans For Veterans
- Small Business Startup Loans: Your 8 Best Options
More Educational Resources On Grants
Need more information about what grants are, how to find them, and how to use them? Check out our informative articles on small business grants.
- What Are Business Grants & Are They Taxable?
- How To Find A Startup Grants
- Free Money? Where & How To Get A Startup Grant For Your New Business
- Small Business Grants: Resources For Free Money
Business Grants For Veterans: Final Thoughts
Grants for a veteran-owned small business are difficult to receive, but you can improve your odds by doing your research and taking your time throughout the application process. A grant is a great way to fund your business, and you don’t have to worry about repaying funds.
Even if you don’t qualify for grants, your veteran-owned business can take advantage of other affordable financing options to start or expand your business. Consider SBA loans or our picks for small business loans for veterans to give your business the financial boost it needs to be successful.