By Debbie Gregory.

Establishing business credit is an important step for any new business. Business credit allows a company to borrow money that can be used to purchase products or services.

Having a business credit history separate from a personal one minimizes the effect negative events on one might have on the other. For example, financial missteps that impact personal credit history and score wouldn’t impact the business credit if there is a clear separation, and vice versa. Setting up a separate legal entity, such as a limited liability company or corporation also provides protection of personal assets.

The first step is to structure your business as a separate legal entity.

Next, obtain a federal tax identification number (EIN). The EIN is basically a social security number for a business.

Open a business checking account in the legal business name. Once open, be sure to pay the financial transactions of the business from that account. Apply for and use a business credit card, and be sure to pay the credit card bill from your business checking account.

Open a business credit file with all three business reporting agencies: Experian, Equifax and TransUnion. It’s important to closely monitor your business credit reports and scores on a regular basis to ensure the information reporting is accurate and up to date.

Establish a line of credit with vendors or suppliers. Work with at least five vendors and/or suppliers to create credit for your company to use when purchasing with them. Ask them to report your payment history to the credit reporting agencies.

Most importantly, be sure to pay your bills on time. Just like with your personal credit, late payments will negatively impact your business credit.

By establishing business credit; banks, lenders, suppliers, retailers, insurers and investors will now be able to better access the viability and creditworthiness of your business. Ultimately, your business credit report will impact the amount of credit, payment terms, interest rates and insurance premiums your business will pay.

By Debbie Gregory.

HIRE Vets Medallion Program Demonstration Award shines a light on the employers who hire our nation’s veterans. Many veteran business owners fall into that category.

The program is set to kick off in 2019 and utilizes the requirements and criteria of the Honoring Investments in Recruiting and Employing American Military Veterans Act of 2017 (HIRE Vets Act) to determine the recipients.

The program will recognize large employers (500-plus employees), medium employers (51-499 employees), and small employers (50 or fewer employees). Additionally, there are two award tiers: Gold and Platinum.

The demonstration will use the same criteria as the full HIRE Vets Medallion Program and enable more employers to prepare to successfully complete the medallion award application for the full implementation of the program in 2019.

The criteria for most of the awards are based upon the following measures:
1. Percentage of new hires during the previous year that are veterans;
2. Percentage of veteran employees retained for a period of at least 12 months;
3. Percentage of employees who are veterans;
4. Provision of an employee veteran organization or resource group to assist new veteran employees with integration, including coaching and mentoring;
5. Provision of programs to enhance the leadership skills of veteran employees during their employment;
6. Employment of a dedicated human resources professional or initiatives to support hiring, training, and retention of veteran employees;
7. Provision of compensation, to employees serving on active duty in the United States National Guard or Reserve, that is sufficient, in combination with the employee’s active duty pay, to achieve a combined level of income commensurate with the employee’s salary prior to undertaking active duty;
8. Provision of a tuition assistance program to support veteran employees’ attendance in postsecondary education during the term of their employment; and
9. Employer with an adverse labor law decision, stipulated agreement, contract debarment, or contract termination, as defined in the rule, pursuant to either of the following labor laws will not be eligible to receive an Award: Uniform Services Employment and Reemployment Rights Act (USERRA); or Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA).

“Military service develops leadership skills, technical expertise, and problem-solving capabilities — all in demand by America’s companies,” said U.S. Secretary of Labor Alexander Acosta. “The HIRE Vets Medallion Program provides a tremendous opportunity for employers to recruit talented veterans and demonstrate support for those who have sacrificed so much for their country.”

By Debbie Gregory.

There are a number of veteran business loans available to veterans, service-disabled veterans, National Guard and Reservists, and in many cases, the wives and widows of servicemembers.

To be eligible to receive a veteran loan, the veteran must hold at least 51% ownership of the business.

Some of the programs that offer business loans specifically for veteran-owned businesses include:

Streetshares- This is an online financing marketplace built and run by veterans for veterans with small businesses. The Streetshares platform connects veteran entrepreneurs with the right investors who can provide financing for their small businesses. Streetshares has a simple application process to ensure applicants get the right investors for their businesses.

Military Reservist Economic Injury Loans- Not intended for all veterans, this SBA sponsored veteran business loan program is geared particularly toward current and veteran military reservists whose small businesses were impacted when they were called into active duty. If you are a small business owner who is in need of financing as a result of your active service, this program may be just what you need. With interest rates as low a 4%, this program just might be able to get your business up and running in no time. Their terms expand as much as 30 years, but bear in mind that you will need collateral for loans over $50,000.

Veterans Business Fund- This 501(c)(3) nonprofit is an up-and-coming resource for veterans who are seeking funding to open or expand a small business, or purchase a franchise business. The Veterans Business Fund (VBF) relies on donors to provide funding for veteran business loans at favorable terms. Veterans won’t be able to finance their business entirely through VBF, as the program will offer loans only in conjunction with the business owner’s personal equity and the participation of an outside financial institution.

SBA Express Loan Program- Not to be confused with the SBA’s Patriot Express program, which has unfortunately ended, veterans can apply to its normal Express Loan program. Authorized veteran business loans of up to $350,000 through the Express initiative have zero upfront fees.

Hivers and Strivers- This angel investment group is focused on providing early-round funding for startups run and managed by academy graduates, especially from West Point, Annapolis, the Air Force, and the Coast Guard.

As a veteran, your determination to defend our nation’s freedom will hopefully translate to success as a small business owner.

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Some of the greatest entrepreneurs have been war veterans. Just look at Fred Smith, who created FedEx FDX +1.16% (FDX). He served in the US Marine Corps from 1966 to 1969 (he flew on over 200 combat missions in Vietnam and received the Silver Star, Bronze Star and two Purple Hearts). In fact, Smith thought his experience with logistics was critical for his entrepreneurial success.

So with many veterans now looking for opportunities, why not explore a startup? Well, according to Craig Hanson, who is a venture partner at Next World Capital, he is making this a priority. To this end, he has setup VetCap, which was launched last week.

“An SBA study shows that veterans are 45% more likely to start their own business,” said Craig. “But one of the foremost challenges for these entrepreneurs is knowing where and how to raise the capital they need for their business. This is something I know a bit about.”

VetCap plans to rollout workshops across the US, which will include many top venture capitalists and entrepreneurs. At the inaugural event in San Francisco, for example, some of the attendees were Katherine Webster, Executive Director and Founder of VetsinTech; David Mayhew, Chief Risk Officer of GE Ventures; and Kevin Laws, COO/Angel Investor of AngelList.

“As we started getting the word out about the event,” said Craig, “the response from the veterans community was amazing. Veterans were passing the news around, and some even flew in for the event. Originally we hoped to get 30 veteran entrepreneurs to attend; we ended up with a packed house of 80 people.”

While the event was focused on the tech market, this will not necessarily be the case for others. “The topic will change based on the area,” said Craig.

In fact, VetCap is kind of like the concept of open-source software! That is, the platform is easy to setup and customize in any city.

“The main takeaway was that VetCap has hit upon a huge need,” said Craig, “and we’re working on rolling out the next workshops.”

Debbie Gregory, CEO

MilitaryConnection.com

(800)-817-3777 or (805) 306-0580 x124

debbieg@militaryconnection.com

Founder, VAMBOA.org – Veteran and Military Business Owners Association

2013 Commitment To Service Award – Give An Hour

2011 Spirit of Small Business Award – Pacific Coast Business Times
2009 Woman Business Owner of the Year, NAWBO, Ventura County

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