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By Debbie Gregory.

In a small business, everyone who works there is valuable. So when a worker who serves in the National Guard or the Reserves gets called up, it can be a hardship for the business, whether it’s the owner, the CEO or an essential employee.

In an effort to help small businesses when this happens, Congressman Brad Schneider (D-IL) has introduced bipartisan legislation to improve existing Small Business Administration (SBA) programs offering loans and deferrals, which are currently underutilized due to a lack of awareness and because their eligibility restrictions do not fully reflect current deployment practices.

H.R. 7199, the National Guard and Reserve Entrepreneurship Act, would restructure these programs so that companies are eligible whenever a Guardsman is performing active services for more than 30 days, in contrast to current law which requires the Guardsman to be deployed “during a period of military conflict.”

The bill would also direct SBA to work with the National Guard and State Adjutant Generals to raise awareness of other SBA programs that would be helpful to Guardsmen or affected businesses, and to develop more targeted outreach.

The programs include:

• Military Reservist Economic Injury Disaster Loan (MREIDL), a direct loan program that provides emergency working capital to small businesses to meet their obligations until operations return to normal after the essential employee is released from active duty military

• Repayment Deferral for Active Duty Reservists (Repayment Deferral), which authorizes the SBA to work with private lenders to defer interest or loan repayment for small businesses facing similar situations.

“National Guard members and military reservists are an integral part of our armed forces and national defense,” said Schneider. “We should do everything we can to support their service. This bill makes current support programs at the SBA more accessible and efficient so more small businesses have support while members of their team fulfill their military service obligations.”

By Debbie Gregory.

The Department of Veterans Affairs (VA) published new guidelines that took effect on October 1, 2018 for verification of Veteran-Owned Small Businesses (VOSBs) and Service Disabled Veteran-Owned Small Businesses (SDVOSBs),

Under the changes, the VA continues to determine whether individuals are veterans or service-disabled veterans, and is responsible for verification of applicant firms for listing in the Vendor Information Pages (VIP) database.

Responsibility for adjudicating challenges of the status based upon issues of ownership and control is now to be determined by administrative judges at Small Business Administration’s (SBA’s) Office of Hearings and Appeals (OHA).

These newly implemented rules are an attempt to resolve inconsistencies between SBA and VA regulations that have led to conflicting decisions about a company’s qualification for set-asides.

The standard for reviewing a VOSB or SDVOSB’s eligibility is “totality of the circumstances,” with the burden of proving eligibility falling on the applicant. Decisions based on an applicant’s failure to meet any veteran eligibility criteria are not subject to appeal; however, an applicant can re-apply and submit a new application six months after denial.

The changes also clarify the process for removal from the VIP database and expand the reasons for removal to include having tax liens and unresolved debts. Other removal criteria include being found guilty of or involved in criminally-related matters as well as debarment of any individual owning or controlling the business concern, as well as submitting false information to VA.

The VA is not providing an additional level of review, but merely acting on determinations issued by courts or other administrative bodies. Further, bankruptcy has been added as a changed circumstance that can lead to a contractor’s removal from the VIP database.

The new rules clearly define VA’s role in determining whether individuals are veterans or service-disabled veterans, and responsibility to determine the ownership interests of those individuals now ultimately falls on SBA, subject to appeal to OHA.

Funding for Veteran Business Owners

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According to the most recent census data, there are 2.45 million veteran-owned businesses in the U.S. Veteran entrepreneurs contribute to the economy through their businesses and their willingness to hire veterans.
There are a number of funding resources available to veterans in order to get their business off the ground, or expand an existing business.
• The Office of Veterans Business Development, through the Small Business Administration (SBA) supports new and existing veteran entrepreneurs and military spouses. The program offers a variety of training and financial services. The SBA Veterans Advantage Guaranteed Loans program offers loans of $150,000 or less with no guaranty fee. Larger loans carry a low guarantee fee. SBA Express Loans have no upfront borrower fee for eligible veterans and military spouses on loans up to $35,000. Leveraging Information and Networks to Access Capital matches businesses with SBA-approved non-profit lenders. The 7(a) Loan Program is the SBA’s most common loan program, and includes financial help for businesses with special requirements.
• The Department of Veteran Affairs is a great starting point when looking for financing, and has created the Veteran Entrepreneur Portal (VEP), which can help you quickly identify financing resources for your business.
• The Military Reservist Economic Injury Disaster Loan provide funds to eligible small businesses to meet necessary operating expenses that it could have met, but is unable to meet, because an owner/essential employee was “called-up” to active duty.
• The USDA Veteran and Minority Farmer Grant, run by the Department of Agriculture, aims to bring traditionally underserved people into farming through training and technical and financial assistance.
• The VetFran(R) program is designed to help veterans start their own business. While these aren’t traditional business loans for veterans, the program offers financial incentive for veterans to launch a franchise.
In addition to lending resources, don’t discount the value of networking resources. Who better to share advice than those who have walked the path before you?
• American Corporate Partners links veteran entrepreneurs with successful businesspeople for training and mentorship.
• National Veteran-Owned Business Association presents you with a great networking opportunity and the chance to learn much more about running a business.
• SCORE Foundation Veteran Fast Launch Initiative offers advertising, marketing and business mentoring, all at no cost.

• Syracuse University’s Institute for Veterans and Military Families provides entrepreneurial training. Their Entrepreneurial Bootcamp for Veterans program is free for post-9/11 veterans.
• Veterans Business Resource Center provides business consulting and mentoring.
• Veterans Business Services can assist in obtaining capital for your business.

sba

The U.S Small Business Administration (SBA) is looking to serve small business owners as they look for ways to access capital.

Earlier this year, the SBA implemented a new measure to help get small business loans into the hands of veterans.  To continue supporting America’s veterans, the SBA Veterans Advantage reduces the up-front guaranty fee from 3% to 0% for SBA Express loans over $150,000 approved to small businesses owned by qualified veterans.

The SBA has implemented this measure in order to encourage greater participation in SBA lending programs with a direct benefit to veteran-owned small businesses.

This measure set the borrower upfront fee to zero for all veteran loans authorized under the SBA Express program (up to $350,000) which accounts for 73 percent of these loans.  The initiative started on January 1st, and will continue through the end of the fiscal year.

This change makes loans more affordable for borrowers.

Again, this policy announcement means that under the SBA Express program, veteran borrowers will no longer have to pay any upfront fee for any loan up to $350,000.

SBA provides veterans access to business counseling and training, capital and business development opportunities through government contracts. In FY 2013, SBA supported $1.86 billion in loans for 3,094 veteran-owned small businesses.   And since 2009, the dollar amount of SBA lending support to veteran-owned firms has nearly doubled.

Businesses must be 51% or more owned and controlled by an individual or individuals in one or more of the following groups: Veterans (other than dishonorably discharged); Service-Disabled Veterans; Active Duty Military service member participating in the military’s Transition  Assistance Program (TAP); Reservists and National Guard Members; or the Current spouse of any Veteran, Active Duty service member, or any Reservist or National Guard member; or widowed spouse of a service member who died while in service or of a service-connected disability.

 

Tips for Budding Veteran Entrepreneurs

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By Debbie Gregory.

I must sound like a broken record when I say that the traits and skills our nation’s service members possess make them great entrepreneurs, and that military service is one of the leading indicators of entrepreneurial success. Now the U.S. Small Business Administration (SBA) backs this up with statistics that reveal veterans are 45% more likely to be entrepreneurs than non-veterans, and over 13% of veterans have been self-employed in recent years.

Part of that success might be due to the many resources available to help budding entrepreneurs start and run their small businesses, once they leave the military. In fact, over the last three years, more than 35,000 transitioning service members and military spouses have participated in the SBA’s Boots to Business entrepreneurship training program, presented in collaboration with Syracuse University’s Institute for Veterans and Military Families.

Since not every veteran has access to the Boots to Business program, here are some important tips to stay the course:

  1. Lean on your military skills, traits and experience. While in the military, your ability to lead, bounce back, and push through served you well. Likewise, these abilities will serve you well as a great entrepreneur or small business owner.
  1. Know the difference between an opportunity and an idea. While an opportunity could parlay into a business, an idea is more of a feeling or notion that could be fleeting and lead to a failed venture. Try to brainstorm with the people you trust will give you honest feedback, or pull together a focus group.
  1. Analyze the market. Is there a market need for what you are offering? Who will be your customers? Why will they be your customer vs. your competitors’?
  1. Know where to find funding, and be aware of all the financial risks. Will you be tapping friends and family, a bank loans, or outside investors? The SBA has numerous financial resources and SBA-guaranteed loans are an excellent form of funding for veteran startups. T
  1. Make sure you do a feasibility analysis to make sure you know whether or not small business ownership is right for you. A New Venture Feasibility Analysis Tool is available on the Boots to Business website here: http://boots2business.org/resources/
  1. Remember that your business, and ultimately your success, depends on YOU.
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