Ahead of Veteran’s Day, the U.S. Small Business Administration announced on Friday a new zero-upfront-fee loan program designed to help more veterans start or expand businesses.
Starting January 1, veterans taking out SBA loans of up to $350,000 will pay no upfront fee until the end of the fiscal year. Loans between $150,000 and $350,000 typically require upfront payments anywhere between 2.25% and 4.75%. Fees for SBA loans of less than $150,000 are currently set to zero.
“This initiative will set fees to zero for SBA Express loans to veterans up to $350,000, and is part of SBA’s broader efforts to make sure that veterans have the tools they need to start and grow a business. As we honor our veterans and thank them for their service and sacrifice, let’s continue to identify ways to support them when they come home,” said acting SBA administrator Jeanne Hulit in a statement. In fiscal year 2013, the SBA facilitated $1.86 billion in lending to veteran small business owners.
And new research from the SBA’s Office of Advocacy suggests that programs aimed at veterans may be working. Business ownership among young veterans is on the rise: In 2012, 7.1% of veteran business owners were under the age of 35, up from 4.6% in 2008. This runs counter to the trend among the general population, in which business ownership among non-veteran owners decreased from 18.5% to 16.3% in the same time period.
“The drawdown of Afghanistan and Iraq has affected the young age bracket,” says Office of Advocacy chief economist Janemarie Mulvey.
Female veterans are also increasingly becoming business owners. The Office of Advocacy research found that in 2012, 4.4% of veteran business owners were women, up from 2.5% in 2008. While business ownership for women is much higher in the overall population (35.9% of all business owners were women in 2012), the report says business ownership among female veterans is growing at a faster rate.