Each year, more than 200,000 U.S. military veterans return to civilian life after serving our country in uniform. According to the Small Business Administration, 10 percent of veterans would like to own their own business. Veterans are disciplined, well-trained leaders. With access to capital and business training, their success rates as small business owners are high. This contributes to local economic activity and job creation.
Veterans can struggle to find capital they need to get their businesses going. In fact, more than 75 percent of veterans reported encountering challenges as they started and looked to grow their business, citing access to capital as a top challenge, according to an Institute for Veterans and Military Families study.
Just about 8 percent of veterans used business loans from banks or other commercial lenders, yet veteran-owned business account for nearly 10 percent of all U.S business and generate about $1.1 trillion in sales each year.
Providing access to capital is where America’s banks can do even more to help the men and women who served the country and now want to help drive the economy. That’s why Bank of America recently launched a new $20 million Veteran Entrepreneur Lending Program, to connect prospective veteran business owners with affordable capital to help start and grow their businesses.
We are working closely with community development financial institutions in local communities across the country to identify and support veteran-owned businesses. And before receiving a loan, veteran borrowers can participate in a two-month training program – led by Syracuse University, Oklahoma State University and the non-profit VetToCEO – to help them stay on track in those crucial early years of starting a business.
We know that this is just one way to help, and the success stories are there.
Two years ago, Marc Smith, an Army veteran and owner of the Patriotic Pig BBQ in Texas, needed early capital to grow his business. Marc received a loan from a community development financial institution that was, in his words, a “game-changer.” It allowed Marc to buy a large military-themed smoker, which helped him serve four times as many customers and, with the help of ten employees, cater five events per day. His business took off.
In 2017, after 22 years in the military, Marcus Flake, Sr., wanted to apply his Master’s Degree in public health and help fellow veterans. With the help of a bank loan, he started a business that does both. Commercial Sanitation Initiative (CSI) U.S. Military Maintenance provides sanitation, maintenance and remodeling services and works to create workforce development programs for veterans.
Today, there are more than 2.5 million U.S. businesses like these that are majority-owned by veterans. Of those, more than 440,000 are also employers, creating economic growth and jobs.
Veterans know how to lead and have a unique ability to influence change. We can all do more to contribute to their success. It’s one more way to serve those who have served our country.
Commentary by Brian Moynihan, Bank of America CEO.