If you’re a military veteran, lining up some additional financing to start your business might be easier than you think. There’s more to the financing mix than just bank loans. Nonprofit organization and government agencies now provide a very robust mix of veterans small business grants. Making them an attractive option for military veterans returning to civilian life after active duty.
Grants vs. loans
The basic difference between a grant and a loan is that a grant doesn’t have to be repaid. Moreover, you don’t have to provide any collateral for a grant. If you were getting an equipment loan from a bank, you would probably have to put up a portion of the equipment as collateral. This is just in case you weren’t able to repay the loan in full.
Now, contrast that to a small business grant. If you receive a grant, you will have access to cash financing that will enable you to grow your business. And without a need to pay back the grant over a certain period of time.
It’s not “free money” because you still have to fill out a lot of paperwork and qualify under sometimes very strict guidelines. And you may have to submit follow-up paperwork after you’ve received a grant. To serve as proof that you used the grant the way you said you would. If you are regularly winning grants, you might need to hire a full-time employee just to take care of the paperwork.
Where to find grants
There are two major sources of small business grants – nonprofit organizations and government agencies. Both of them have the objective of helping a particular segment of the population. With a growing number of them now focused on the unique needs of military veterans.
The goal of these grants is to encourage more veterans to explore the world of entrepreneurship.
The basic idea is that small, entrepreneurial ventures will stimulate the local economy and boost the overall community. Small businesses are known as wonderful job creation machines. So it’s expected that any new small business will boost employment in the local community.
According to the U.S. Census Bureau, there are now 2.4 million businesses owned by veterans. These businesses are responsible for employing 6 million people nationwide.
How to apply for grants
Thus, if you’re applying for these grants, there are two major points that you will want to keep in mind. One is the underlying business model of the new company you are launching.
The other is the role that your business will play in helping to stimulate the local community. The better that you can tell both of these stories, the higher is the likelihood that you will be approved for a grant.
You also have to keep in mind the funding cycles of these businesses. Most government agencies have a single time each year that they distribute grants, so you have to watch deadlines carefully. Nonprofit organizations, in contrast, tend to consider grant requests on a case-by-case basis.
While it can require a considerable amount of resources to track down these grants, the potential payoff is significant. By winning a veterans small business grants, you will have a source of financing to grow your business. Best of all, you won’t overburden your company’s balance sheet with debt, like with a business loan.
Since many grant providers also provide training and mentoring, you also get an extra boost in expanding your business.