It’s easy to think that veterans would do well if they want to look into starting their own businesses.
After all, many of them are personable, honest and great at making things look tidy. They may be organized, focused and have a lot of tools and abilities at their disposal. There also might be some social pressure to be helpful to our veterans.
Unfortunately, not all of these reasons are always considered when financing is sought for veteran-owned businesses. For various reasons, some traditional lenders are known to look more at balance sheets and overall risk primarily, rather than opportunities to help a veteran-owned business establish itself and become part of the community.
Some reasons why this may be taking place include:
- Poor financial history. Someone who has only served in the military may not have had the chance to build up stellar credit. Some have had low wages or worse credit earlier in life.
- Weak paperwork. While members of the military often excel at forms and charts, modern loan and financing forms are sometimes accused of being confusing or incomplete.
- Poor capital. People who have served or are serving may not have been put aside a lot of money for future business endeavors, such as a down payment.
- Smaller requests. Some applicants may be qualified to borrow more, but they may not make a large formal request for funding out of general principles or interest in avoiding higher debt later in life.
- Lower education. Though they likely have picked up great life skills in the service, they aren’t always weighted the same as a degree.
Applicants may approach a traditional lender first, and then, after they’re rejected, they may not know what to do next or where to go.
Luckily, there are a wide variety of alternative financing options available for various veteran owners businesses. They may have different interest rates or terms than traditional loans, but they might be more likely to say “yes” than “no thank you.”
For more suggestions on funding options for veteran-owned businesses, visit Proactive Funding Solutions.