New Funding Source For Veteran Entrepreneurs

Financing is often a barrier to potential veteran business owners and now there is a loan fund that could help them overcome it.

The Veterans Business Fund is a New York-based nonprofit organization that provides the supplemental capital needed to satisfy the equity requirements for obtaining a small business loan. The VBF provides capital to veterans in the form of a non-interest bearing loan with very favorable repayment terms.

The VBF was established to help veteran entrepreneurs get equity financing to start a franchise or another type of independent small business. Veterans who have been previously denied bank financing because of insufficient equity capital are encouraged to apply for VBF financing. Getting a small business bank loan is particularly challenging for veterans, who are less likely than others to have access to capital in the form of home equity, investments or a 401k that they have been funding for years.

The VBF is managed by BoeFly, a New York-based marketplace that connects businesses borrowers with 2,400 lenders from around the country. This is BoeFly’s first loan program targeted specifically to veterans after identifying a need through its knowledge of borrowers’ loan requests and banks’ lending criteria. According to BoeFly, no other program currently exists for small business owners or franchisees that focuses on the equity injection aspect of getting a bank loan.

Mike Rozman, co-president of BoeFly and a member of the VBF Board of Directors, says the capital from the VBF is structured as a junior loan. Veterans can apply for these loans, between $5,000 to $100,000, which typically will be financed over seven to 10 years to keep payments low. The loans will carry a fixed interest rate of 1.5% amortized annually. Veterans pay back the equity financing — including principal and interest — to VBF and then those funds are redeployed to other veterans who need similar financing to get bank loans. Initial funding of the loan program is being financed with charitable contributions from generous donors, individuals, corporations and foundations.

Rozman says such financing “ultimately makes it possible for veterans to apply their military experience to owning a business while creating jobs and helping to boost our economy.” More details can be found at

Beth Solomon, vice president of strategic Initiatives & industry relations at the International Franchise Association and head of its VetFran program, says the funding is a big step forward for Operation Enduring Opportunity. The VetFran initiative is an effort to hire as team members and recruit as franchise business owners 75,000 veterans and military spouses and 5,000 wounded warriors by 2014. VBF’s loan program could be transformational in enabling more veterans to become franchise owners, Solomon adds.

The VBF’s new funding initiative comes off the heels of a recent report from the IFA prepared by Franchise Business Review that shows nearly 65,000 veterans, military spouses and wounded warriors have started careers in franchising, including 4,314 new veteran franchise business owners, since 2011 through Operation Enduring Opportunity.