Your service to your country, and the skills you attained there should never hold you back. In fact, your military service experience can make you ideally qualified to run your own business. Recent research, by The New York Fed and other financial experts, however, shows that veteran entrepreneurs may have difficulty getting loan approvals to start a new business. Here is an outline of the problems some veterans may face, and suggested solutions.
Business Loan Challenges for Veteran Entrepreneurs
What stands in the way of some veterans getting approved for business startup financing? Many former military service members have issues like:
- Short credit history or none: Some military members may have little, or no, credit history. This can occur, for example, if individuals join the military at a relatively young age before they get credit cards and/or auto loans to establish a personal credit history. This lack of credit history means that major banks may feel making loans is too risky. Non-bank lenders, however, are more open to lending to veterans with no credit history. These lenders will look at other factors to assess your reliability.
- Low credit score: Military members may have trouble keeping track of bills and due dates when they are deployed, and redeployed, to new parts of the world. Late bill payments can sink your credit score. With less set-in-stone lending standards, alternative lenders can help. Veterans should apply with non-bank lenders to seek funds for their business needs.
- Low loan amount request: Veterans often need business loans for smaller amounts. Major banks also avoid making smaller loans, feeling that they are not worth the trouble (administrative costs). Non-bank lenders are a great option for smaller business loans.
How can you get past these hurdles and qualify for a business loan? If you are a veteran entrepreneur, don’t get discouraged! Talk to non-bank, alternative lenders about getting a veteran’s business loan. Alternative lenders typically offer more financing options than a traditional bank, making it easier for you to qualify for a loan to meet your needs.
Explore all the financing options for veteran entrepreneurs at Integrity Financial Capital. Contact us today!