Types of SBA Backed Up Loans For Veterans
How veterans can get access to small business loans
Many military veterans have what it takes to make it in the civilian world thanks to the character and self discipline promoted by serving in the military. The military assignments enables them to develop self confidence, leadership skills, determination and taking risks in life. After retirement, many veterans opt to engage in entrepreneurship as a way of sharpening their skills acquired during their service to the military.
Many US military veterans have access to small business loans just like the other small business owners. The US small business administration(SBA) has set up very special provisions for veterans. The SBA works together in conjunction with different veteran business outreach centers to mentor and nurture any business idea from the vets. Some of the Veteran business outreach centers include Veteran First Launch Initiative and VetNet by Google among many others.
However, it is always very difficult for veterans to access small business loans because of the rigorous credit and document requirements. With SBA however, any veteran can access a small business loan since SBA acts as a guarantor in case any vet defaults in loan repayment. This has made it very easy for banks and many other loan companies to offer loans to those who have retired from the military thanks to the security guaranteed by Small Business Administration.
If you apply for a small business loan at a bank, the bank will quickly assess your application against the guidelines provided by the SBA and if you qualify, the loan guaranteed by SBA will be given to you within a very short period of time. Below is a quick look at different SBA business loans for veterans and their credit requirements.
7(a )Loan Guarantee Program: This is a type of loan aimed at starting or rather expanding a small business. The maximum amount of loan available to any veteran is $5 million. To be given this loan, you need to provide 10% of the business' capital. In case of any existing business, you need to provide financial statements that shows the business is viable, is a for profit, has proper management and does not have delinquent taxes. The SBA 7(a) loans are subdivided into CAPLines loan program, Advantage Loans, Rural Business loans, Community Advantage loans and SBA Export Loan Programs among many others.
Microloan Program: This is another type of loan guaranteed by the SBA. This loan is generally meant for short term purposes such as purchase of goods, computers, furniture and transportation. The maximum amount any veteran can be given is $50,000. It should be noted that this type of loan cannot be used for purposes not intended to such as paying existing debts or buying property. The maximum repayment period for this loan is six years.
Real Estate and Equipment Loans: This is the type of loan meant for financing major fixed assets like equipment. To apply for this loan, every veteran should have a profitable company and you should not apply for a loan from any other source plus have a well written business plan.
Disaster Loans: SBA provides loans for veterans in case their property is destroyed by disasters such as hurricanes. To qualify for this loan, you must be located or rather your property should be located at a disaster declared area. There are two types of disaster loans namely physical disaster loans and economic injury disaster loans. The former are to be used to repair damaged property such as machinery, equipment, furniture and inventory. Furthermore, any veteran is eligible to be given 20% loan increment on the total amount of disaster damage so as to protect the new property against future disasters of the same type.
Generally, any military veteran can access the above types of loans from different authorized lenders. There are a good number of lenders in the US in every county to provide all these types of loans for any interested military veteran.
However, it is good to note that for every loan, each veteran must meet all the requirements set by the SBA.