Military personnel who dream of starting their own business after leaving the armed forces often face an array of obstacles, not the least of which is funding.
A $20 million lending program that Bank of America introduced Friday aims to help, offering affordable small business loans through community development financial institutions, which focus on distressed groups across the country. Bank of America’s charitable foundation will also provide $1.3 million in grants to support the institutions over the next two years.
What the Charlotte, N.C.-based lender has created is exactly the sort of service that prospective entrepreneurs need after military service, said Misty Stutsman, the director of entrepreneurship and small business programs at the Institute for Veterans and Military Families at Syracuse University. According to the Small Business Association, about 10 percent of veterans own companies, and they employ 5.8 million people.
Gaining access to capital is the biggest challenge facing veterans who are just getting started, she said. Many struggle to qualify for traditional bank loans due to low credit scores and a lack of experience putting together a business plan and financial projections.
“When you have partnerships between banking and training institutions,” she said, “that’s when you make real progress in moving veteran businesses forward.”
Loan recipients through the Bank of America program will be required to complete two months of training at one of the lender’s learning partners: The veterans institute at Syracuse, Veterans Entrepreneurship Program at Oklahoma State University, and VetToCEO by Veterans for Veterans.
Funding for the program will be provided to community development institutions in North and South Carolina, Colorado, New York, California, Texas, and Oklahoma, the company said.
