By now, you may have heard about the U.S. Small Business Administration’s (SBA) vow to increase lending to veteran owned businesses by 5% a year for the next five years. Twenty big banks and 100 community banks across the country have signed on to become SBA Lending Partners through the SBA Veteran Pledge Initiative. Collectively, they are aiming to lend $475 million in expansion and startup loans to 2,000 veteran business owners over the next five years.
A 5 % Lending Increase to Veterans Matters
Some of you might be wondering why such an initiative is necessary. Veterans already have access to dedicated resources through The Veterans Administration (VA) and Veteran Business Outreach Centers.
Is it really necessary to commit additional resources to the veteran business community?
The answer is yes. Here’s why a 5% lending increase to veterans matters:
- According to the Department of Veterans Affairs, there are approximately 23 million veterans currently living in the United States.
- In 2007, there were 2.45 million businesses with majority ownership by veterans. Those businesses accounted for $1.220 trillion in sales, employed 5.793 million individuals, and contributed an annual payroll of $210 billion.
- Veterans collectively employ more individuals than the populations of Delaware, North Dakota, South Dakota, Alaska, Vermont, Washington DC, and Wyoming combined.
- According to a study by the National Coalition for Homeless Veterans (NCHV), military training and occupations are not always transferable to the civilian workforce, placing many veterans at a disadvantage when competing for traditional employment.
- The U.S. Department of Housing and Urban Development (HUD) estimates that 62,619 veterans are homeless on any given night. Over the course of a year, approximately twice that many veterans experience homelessness.
- Though only 7% of the general population can claim veteran status, 9% of all small businesses are veteran-owned and nearly 13% of the adult homeless population are veterans.
The Numbers Tell a Compelling Story
On the one hand, veterans have already proven themselves to be savvy entrepreneurs and small business owners. Their businesses contribute heavily to growth of the economy and to employment. The SBA hopes to support the continued growth and success of these businesses through expansion loans.
On the other hand, many veterans retire from active duty with four plus years of military experience that is not necessarily transferable to the traditional workforce. Many of them have skills that are valuable to the U.S. economy but little means to utilize them.
Startup loans through the SBA Initiative could help these veterans put their skills to work.
Veteran Businessman Photo via Shutterstock