Launching a business starts with a dream, but to turn that dream into reality, you need the right fuel: capital. For many veteran entrepreneurs in Chicagoland, finding that fuel is the single most challenging part of their journey. If you’ve struggled to get approved for a loan, worried your credit score would hold you back, or felt stuck between wanting to grow and facing a wall—know this: you are not alone because access to capital is the biggest challenge facing Veteran entrepreneurs.
Why Is Access to Capital a Veteran’s Biggest Hurdle?
Recent studies indicate that 37% of veteran entrepreneurs cite access to capital as their top barrier to business success. This is higher than for the general business population. Why? Often, veterans come out of service with limited personal savings and thinner credit histories than their civilian peers, making banks less willing to offer loans. Without outside capital, it’s hard to afford inventory, hire staff, invest in marketing, or simply make payroll.
Let’s break it down:
-
Banks Look for Credit Scores & Collateral: Many veterans did not build civilian credit while serving, and some missed years of savings or homeownership.
-
Personal Savings Get Drained: According to Federal Reserve data, 72% of veteran business owners dip into their own pockets to start or grow their company, compared to just 62% of non-veterans.
-
More Likely to Get Denied: Applications for business loans are less likely to be fully approved for veteran-owned businesses, leading many to rely on high-interest online lenders or unfavorable payment terms.
Despite these realities, veteran-owned businesses are powerful economic engines. There are roughly 1.6 million veteran-owned firms in the U.S., employing 3.3 million people. Imagine what those numbers could be if more had funding to fuel their dreams!
Checkpoint: Are You Facing These Capital Access Obstacles?
-
Do you find it difficult to get a standard business loan?
-
Have you ever used personal savings, credit cards, or even retirement funds for your business?
-
Do you feel overwhelmed by the paperwork, credit checks, or collateral requirements banks demand?
-
Have you considered (or used) an alternative lender with high fees out of desperation?
-
Are you unsure where to look for help tailored to veterans?
If you answered “yes” to several, you are not alone—and there are solutions tailored for you.
Chicago’s Financial Landscape for Veteran Founders
Chicagoland is home to thousands of veteran business owners, along with programs and advocates who understand the unique challenges you face. Whether you’re ready for your first loan or need advice on alternative funding, these resources are designed with you in mind.
Veteran-Specific Loan Funds
VEDC Veteran Small Business Loan Fund:
-
For veterans operating a business in Chicago for at least two years.
-
Loans from $50,000–$250,000 for working capital, expansion, equipment, or real estate.
-
No minimum credit score, but must show a profitable year and provide personal guarantees.
-
Focused on business owners who are creating jobs and contributing to Chicago’s economic development.
-
Contact: Torrence Moore, Managing Director (Illinois), 312-577-7587, tmoore@vedc.org.chicago
SBA Veterans Advantage Loan Program:
-
Backed by the Small Business Administration with reduced fees and special terms for veterans.
-
Apply through banks or SBA lenders familiar with veteran needs.
Alternative Funding Sources to Access Capital
-
StreetShares Foundation Grants: Annual competitions for veteran-owned businesses; no repayment required.
-
IVMF: A national nonprofit with a strong Chicago presence; it provides pitch competitions, mentoring, and connections to investors just for veterans.
-
Illinois Small Business Development Center (SBDC): Offers workshops, one-on-one business counseling, and help navigating funding options.
Government & Community Support
-
Veteran Business Project: Chicago-based, matches veterans with retiring business owners in local communities—think about acquiring an existing company rather than starting from scratch.
-
Illinois Department of Veterans Affairs: Helps with business certification and connects you to incentives and grants specific to Illinois veterans.
-
Networking Organizations: Join the Chicagoland Veterans Business Owners and plug into both formal and informal groups—don’t underestimate the power of a referral.
Finding Creative Paths to Access Capital
If banks say “no,” don’t give up. Today’s business environment offers more ways than ever to get access to capital:
-
Microloans: Useful for short-term needs or startup cash with more flexible requirements.
-
Crowdfunding: Raise small amounts from many supporters—patriotism, your mission, and your story can inspire backers.
-
Revenue-Based Financing: Pay a percentage of your monthly revenue until the loan is paid back; this is increasingly popular in Chicago.
-
Online Lenders: Be sure to compare rates and watch for high fees. Use this only as a short-term bridge.
It’s also smart to take advantage of any available tax credits, especially those tied to hiring veterans or expanding in low-to-moderate-income neighborhoods.
Action Steps: Get Funding-Ready
-
Polish Your Business Plan: Lenders and grantors want to see a clear vision, revenue projections, and a strong “why.”
-
Build Your Credit: Start as early as possible—personal and business credit both matter.
-
Gather Documentation: Tax returns, DD214 (discharge paperwork), financial statements, and legal business documents are commonly required.
-
Network Relentlessly: Each connection—at Chicago Veterans Business Association, Bunker Labs, or local SBDC workshops—opens more funding opportunities.
-
Get Assistance: Lean on the free counseling and readiness programs outlined above.
Never Go It Alone—You Have a Community
Your service taught you persistence. Entrepreneurship demands it, too. Navigating the world of business finance will test you—but there are veteran-specific resources here in Chicagoland and beyond. Don’t hesitate to reach out, ask for help, and let these organizations stand with you.
If you’re still struggling to unlock growth for your business, the next step may be the most important: connect with veteran-focused local groups, sign up for a workshop, or start your next application with help from someone who’s been in your boots. Your journey is the foundation for a stronger, more vibrant business community.
