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A new report from the Small Business Administration and the Federal Reserve Bank of New York finds veterans have a harder time getting financing for their business than do non-veteran business owners.
Sixty percent of vets reported that when they sought financing for their business– either a loan, line of credit or cash advance — they either received less than the amount they sought or didn’t receive any financing at all. That compared with 52 percent for non-vets.
Approval rates for vets were lower than for non-veterans regardless of the type of lender from which they sought financing: large banks, small banks, or online lenders, according to the report, Financing Their Future: Veteran Entrepreneurs and Capital Access.
The most common reason veterans reported they were denied funding were:
One possible reason the report’s authors cited for the shortfall in financing is that veterans were more likely to seek smaller loans, which are more costly for lenders to process than larger loans.
A key takeaway from the report: the authors suggest veterans should seek assistance before applying for a loan, including advice so they can be better prepared for the loan application process.
The Delaware Division of Small Business offers one-on-one assistance to small business owners, including military veterans.
Contact us to see how we can help you.