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5 Veteran-Owned Business Advantages You Need to Know
Advantages for your veteran-owned business include access to unique training programs like Boots to Business and Veteran Institute for Procurement, exclusive federal and state contracts set aside for veteran-owned businesses, and waivers on fees or restrictions on SBA business loans that make getting the funding you need to grow easier. However, the first thing you have to do is get your business certified.
Getting certified helps you to qualify for these benefits, and it’s important to get the right certification depending on who you offer services to. You’ll need the Veteran Small Business Certification (VetCert) from Small Business Administration (SBA) to compete for federal contracts that are set aside for veteran businesses. States will have their own certification process for state-level benefits. For example, in Florida, you’ll need to compete for state contracts set aside for veteran-owned businesses.
There are also private organizations like NaVOBA and NVBDC that certify veteran and service-disabled veteran-owned businesses, allowing them to compete for contracts and special preference offered by major companies like CDW and Lowes. These organizations charge a fee for certification though.
Pro-tip: Watch out for scams like “certify.us” which the SBA warns about on their site. Scams will try to pressure you into paying for unnecessary services or revealing sensitive business info you don’t need for certification.
Now that you know where to get certified, here are 5 of the top advantages you have as a veteran-owned business.
1. Office of Veterans Business Development Programs
The U.S. Small Business Administration has a specific branch called the Office of Veterans Business Development (OVBD), which is dedicated to providing resources to help veteran small business owners succeed, including:
- Grants
- Training programs
- Access to college courses
- Consulting
- Mentorships
In addition to the overall benefits, OVBD has tailored support for women veterans, service-disabled veterans, and military spouses. The OVBD also helps you navigate the complexity of government contracting and procurement, helping to remove confusion and maximize your opportunities.
The OVBD is also a great portal with links to free training and entrepreneurship programs that teach business fundamentals, federal procurement strategies, and financial planning. These come from organizations nationwide:
- Boots to Business gives transitioning military members entrepreneurial training and education as part of the Department of Defense’s Transition Assistance Program (TAP).
- Veteran Women Igniting the Spirit of Entrepreneurship offers training and resources to women veterans.
- Veteran Institute for Procurement preps you for the government’s contracting process.
2. Business funding advantages for veterans
Your veteran-owned business gets an advantage in business funding with waivers and reduced requirements on SBA loan programs and with grants, which offer cash that you don’t have to pay back.
Business Loans
The SBA gives you an advantage with waived fees and special privileges on two of their business loan programs:
- SBA Express
- 504 loans
SBA Express
You won’t have to pay the guarantee fee for SBA Express loans. Upfront guaranty fees can be substantial depending on loan size/term, but SBA Express is $0 up front for eligible veteran-owned businesses. This can save you thousands on loans up to $500K, and the funding can be used for various purposes including working capital, equipment purchases, operating expenses, and other needs.
504 loans
Your veteran-owned business gets an advantage on SBA 504 loans with reduced requirements for loan approval. Typically, 504 loans must create (or keep if the job exists already) one job for every $90K borrowed. But because it’s a stated public policy goal to expand veteran-owned businesses, you get an exception from that requirement.
This makes it easier to get a loan approved since you’re not haggling over headcount forecasts, and it can boost your profit since you’re not hiring employees you don’t need just to meet a loan requirement.
Grants
Grants for vet-owned small businesses are free money designed. Many of these are private programs as opposed to government-funded initiatives, and there are numerous available, ranging from direct business grants to competitions for start-ups.
Two examples are Hiring our Heroes, which offers grants up to $25,000 for veteran-owned businesses, and the Veterans Business Battle, which connects veteran entrepreneurs with venture capitalists in a pitch competition offering $30,000 in prize money.
3. Government contracts
The next advantage you get as a veteran-owned business is set-aside and sole-source federal contracts that are exclusively for small businesses with veteran certifications. You’ll find the federal contracts listed in SAM.gov. Use the “set aside” filter to choose either “Veteran” or “Service-Disabled Veteran-Owned Business.” States have their own contract portals and certification requirements to bid. Here is California’s, for example.
You’ll need your VetCert from the SBA to compete for these contracts, and if you’re not service disabled, you’re limited to set asides at the Department of Veterans Affairs (VA), which dedicates at least 7% of its contracts each year specifically to vet-owned businesses. Additionally, service-disabled veteran-owned businesses can compete for the 5% of dollars the U.S. government sets aside each year.
If you’re not already certified, start by making sure you have an accurate listing in SAM.gov, including your NAICS code. Then apply at My SBA Certifications.
4. Marketing opportunities
Marketing your business as veteran-owned gives you an edge with many customers, especially if they have stated preferences for veteran businesses. If you’re just starting your business, focusing on a veteran-owned marketing angle and targeting friendly companies is a great way to focus and get off the ground.
And while the Work Opportunity Tax Credit isn’t exclusive to veteran-owned businesses, it will save you thousands on taxes when you hire veterans. Combining the vet-owned + vet workers message can give you a big advantage in the marketplace.
There are also tons of networking opportunities where you can meet potential partners, customers, and mentors. The certifying organizations like NaVOBA and NVBDC organize events and have focused efforts to introduce you to their partners in corporate America. Once you get certified by these organizations, you’ll be able to take advantage of the networking and corporate matchmaking they offer, although there is a cost to get certified.
5. Surplus Personal Property Program
The Federal Surplus Personal Property Donation Program can give you an advantage with equipment purchases, since it offers low-cost and sometimes free surplus government property. Your State Agency for Surplus Property (SASP) is the place to start, and you can find it on this list from the GSA.
Available property includes construction equipment, office furniture, trucks, IT hardware, and more. However, because it’s surplus, you won’t always find what you’re looking for. In any case, the low prices and nominal service fees make it worth a little treasure hunting, as long as you’re a certified veteran business and meet these restrictions:
- Use the property you receive within one year.
- Your company is located and operating in the state where the SASP is located.
- You are certified through VetCert.
- You won’t sell the property without written permission.
- You’ll maintain your eligibility and give the government access to inspect the property and records, if requested.
If you’re a veteran and small business owner, you’ll benefit from certifications that help you get approved for loans, save thousands of dollars in fees, get special training, and qualify for contracts set aside exclusively for vets. Start by applying for your VetCert and review the types of small business loans we offer—for after you get awarded your next big contract and you need additional funds.
We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal and accounting advisors.
