U.S. Sen. Jeanne Shaheen (D-NH) wants more loans for veteran entrepreneurs.
Shaheen recently introduced the Veteran Entrepreneurship Act. The act aims to lower the cost of Small Business Administration loan programs for military veterans trying to start their own businesses. At the same time, Shaheen also introduced a Veterans Hiring Act, providing tax incentives for businesses hiring veterans.
The Veteran Entrepreneurship Act would waive fees for veterans seeking loans through the SBA Express program. An SBA Express Loan is capped at $350,000. The SBA guarantees 50 percent of these loans for lenders. The SBA promises a 36-hour turnaround time on loan decisions through the Express program. SBA makes final decisions on most of the loan applications through the Express program. Some lenders are authorized to make loan decisions on their own.
Veterans of wars in Iraq and Afghanistan are suffering from 9 percent unemployment. This is about 2 percent higher than the national unemployment average. By waiving the fees and giving more, and quicker access to loans, the SBA hopes its Express loans could help lower those unemployment numbers.
However, newly sworn Small Business Administration Chief Maria Contreras-Sweet may need to provide more oversight for some of these programs. That’s due to criticism of the SBA’s handling of some loans in recent years.
In an official announcement backing both bills, Shaheen explained:
“One of the best things we can do to honor that service is make sure they have good-paying, quality jobs when they come home. The skills developed through military training and service are the same qualities that make great employees and entrepreneurs. We can do more to help during the transition process, and these two pieces of legislation will go a long way toward helping veterans, small businesses, and our economy.”
Shaheen also said the bill, if passed, would increase funding to SBA programs focused on pre-deployment financial counseling and emergency assistance for veterans.
The legislation also calls for a boost to the SBA’s Women Business Centers and Veteran Business Outreach Centers. Those resources can be used by female veterans to begin thinking about starting their own businesses. Shaheen added:
“We also need to make it easier to access the programs we already have. Despite making up fourteen percent of our military and owning thirty percent of our small businesses, only four percent of veteran-owned small business are run by women. We need to do better. This bill will make important progress in filling in some of the gaps in our current programs.”
Image: Shaheen
Well its good to see that Shaheen has been doing great job towards upliftment of Veteran group. As funding would help them to choose & work towards achieving their goals. Since SBA programs are meant for monetary assistance for all groups, so that they can easily clear obstacles in business.
This a great news from Sen. Jeanne Shaheen.
Our military veterans have very slim chances of getting small business loans-especially for startups like franchises.
Their net worth’s are low-in general, and they usually don’t come to the table with a lot of their own money.
I’d like to see a really-aggressive loan program come out of this.
The Franchise King®
Aira Bongco
This is great news. And since they are going to deal with veterans, it is not that hard to get some money out. After all, you can somehow be sure that you can get the money back.
Joe Russo
We need more access to funding, it has be come nearly impossible to get any type of funding unless you have dame near perfect credit. Banks and private instructions are as tight bested as they ever where and I don’t see it getting any better any time soon.
I feel that a lot of empty promises are being made and that they mean nothing to those of us who have served in war and peace time.
Mike Hagerty
Unless SBA handles these loans directly, as an experienced service disabled veteran small business owner, I can confidently state that this effort, while well-intended, will have virtually no effect on the number of loans made to veteran business owners.
From SBA’s web site: “In just four years the U.S. Small Business Administration’s Patriot Express Pilot Loan Guarantee Initiative has provided more than $633 million in SBA-guaranteed loans to 7,650 veterans to start or expand their small businesses.”
That works out to about $83,000 per veteran, which may sound like a great deal of money, but neglects to mention the even larger number of veterans who were denied this loan, which is covered by SBA up to 85%! The sticking points, as always, are collateral, collateral, and collateral.
A streamlined application and no up-front fees sound great, but bankers who won’t make a loan with 15% to 25% at risk won’t get very excited to increase their risk to 50%. Sometimes reality does bite.
Mike,
I feel the SBA is trying.
But, veterans who try to get a small business loan with no money…no skin in the game, are going to have trouble no matter who backs the loan.
Reality is tough for them.
Maybe a 5% down low-interest loan for vets with great credit can be implemented.
Maybe.
I’d love to see our vets get a shot here too, Mike.
The Franchise King®
Kimberly Erskine
This definitely sounds like a step in the right direction. It makes me so sad when I hear about the high unemployment rate of our veterans. They did so much for their country that they deserve to be able to support themselves financially and to get good jobs and fulfill their dreams.
I have also recently heard that some franchises are offering benefits to veterans which could be very beneficial. Becoming a franchise owner is definitely a great step for aspiring entrepreneurs to take. I’m glad to see that Senator Shaheen is working hard to help give back and support our veterans.