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A plan to allow United States veterans eligible for GI Bill benefits to use the potential benefits as a source of capital to start a business was signed by President Barack Obama on Sept 9, 2015.
The Veterans Entrepreneurial Act (Vet Act) of 2015 will allow eligible veterans to access GI Bill funding as seed money for new businesses as opposed to using it for college tuition.
This will allow talented veterans with entrepreneurial spirits who may not want to go to college to pursue their business ideas by leveraging the GI Bill to help start their companies.
The bill also waives the typical guarantee fee for those applying for a7(s) loans via the Small Business Administration; this will assist recently-discharged veterans to access funds more quickly.
The bill’s sponsor, Senator Jerry Moran, R-Kansas, said “After serving our nation, many veterans want to continue their service by giving back to their communities as small business owners and entrepreneurs," Moran said in a statement. "It's common sense to give them more flexibility and choice in their benefits to achieve their goals” (Military.com).
Co-sponsor Senator John Tester, D-Montana, stated, “This bill will help veterans transition from the armed services to the private sector so they can succeed on Main Street.” Senators Moran and Tester stated that nearly 550 service members transition into civilian life from military life every day; they estimate one million service members will go through this transition within the next 3 to 5 years. (Military.com).
If enacted, the bill would allow qualified veterans to use the skills learned and work ethic gained while serving our country in order to start a new business and further strengthen our communities nationwide.
Per the Vet Act, service members are encouraged to set up new businesses—or buy into existing ones—using GI Bill education benefits as collateral for loans. The SBA and the Department of Veterans Affairs will oversee the 3-year pilot program, enabling 250 veterans to begin their lives anew.
According to Michael Helm, American Legion National Commander, “The fact that 62 percent of veteran-owned small businesses bootstrap their ventures with personal or family savings highlights the reality that access to capital remains an issue for the veterans’ community” (Military.com).
Several high-ranking former officers now in administrative and/or political positions fully support the GI Bill, and hope to see it change the lives of service men and women.
The training, education and leadership skills that many of our veterans possess allow them a different perspective on the business world. Our veterans with advanced knowledge of technology can utilize these skills to introduce new products to the market. United States veterans tend to see things a little differently and problem solve uniquely in order to provide alternative solutions.
As a veteran, I can’t think of a better way to honor these exceptional individuals than to allow them the benefits allotted to other veterans who choose to go to college. The previous GI Bill could only be used for attending school; approximately 50% of the eligible veterans do not use the current benefit, and I believe this opportunity will increase the percentage.
According to the plan, veterans would have to complete approved business training and develop a Small Business Administration-approved business plan. A local SBA office can assist with specific information regarding the business plan, and the Department of Veterans Affairs can provide information on the approved training programs.
More information about the Vet Act can be found on the Veteran and Military Owned Business Association website www.vamboa.org. Other information useful to our veteran business owners can be found on the Veterans affairs webpage www.va.gov.
Gregory, Debbie. “President Signs Vet Entrepreneurship Act.” Veteran and Military Business Owners Association. VAMBOA.org. Sept. 9, 2015. Web. Oct. 1, 2015.
Sisk, Richard. “Bill to Let Vets Use GI Bill to Start a Business Passes Senate Hurdle.” Military.com. Military.com Network. July 30, 2015. Web. Oct. 1, 2015.
THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE’S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE.
There are 2 comments left for New GI Bill Aims to Help Entrepreneurial VeteransGarrett Wiseman said: Wednesday, May 10, 2017
I have recently opened my own business. My veteran status is pending but I should have it anytime now. Who would I contact to pursue with this loan? ThanksHBS Staff replied: Friday, May 12, 2017
Try either (or both) the Small Business Association or the Department of Veterans Affairs.precious leyva said: Thursday, April 20, 2017
I really appreciate the idea to support veterans to become business owners. It's very true, they are trained to be unique, fast, and efficient thinkers. This could be very beneficial to the business world.HBS Staff replied: Monday, April 24, 2017
We think so, too! Thanks for reading our blog.