A new federal program to transition veterans into business owners was announced this month in honor of National Veterans and Military Families Month.
The announcement coincides with a new study that shows veteran entrepreneurship is facing a “generational decline” with younger veterans owning businesses at lower rates compared to past generations and non-veterans.
A new pilot program takes a step in tackling the discrepancy. It involves a collaboration between the U.S. Small Business Administration (SBA) and U.S. Department of Veterans Affairs (VA) to scale intensive management and leadership training for veteran small business entrepreneurs.
Seed money for the program comes from President Donald Trump who donated his second quarter salary, $100,000, for the pilot.
“Veteran business owners are critically important to our nation’s economy. In fact, one in 10 business owners is a veteran, collectively employing nearly five million American workers,” SBA Administrator Linda McMahon said after signing a memorandum of understanding with VA Secretary Robert Wilkie forging their commitment to the program.
Alarming new data indicates that veteran small business owners face more challenges when applying for financing. That may be why their numbers are declining, concludes a report, Financing their Future: Veteran Entrepreneurs and Capital Access.
Released by the Federal Reserve Bank of New York and the SBA, the study reveals that veteran business owners have a more difficult time obtaining capital compared to fellow veterans and non veterans. Veteran business owners reported more financing shortfalls and lower approval rates.
The data provides a starting place, said Claire Kramer Mills, assistant vice president of the New York Fed. Now, policy makers and service providers can focus on improving financing for veteran-owned small businesses.
In Arizona, an estimated 81,000 small businesses are owned or co-owned by veterans, said Robert Blaney, Arizona’s District Director for the SBA. Almost 10 percent of the total number of businesses in Arizona are majority-owned by veterans, which is slightly higher than the national state average.
Veteran entrepreneurs have been shown to be key to developing local economies, said Jordan Ripley, of the SBA. Many of these businesses hire other vets and give back to veterans organizations.
Veterans like Ed Willis, a Vietnam Conflict veteran who was awarded four air medals while serving in the U.S. Air Force. Willis enlisted when he was 18 and flew 120 combat missions. He was an AWACS radio control operator, monitoring enemy jamming signals.
He deals with hearing loss and stress from his service but is grateful for the strength of character he developed.
After serving four years, he spent several decades working in government administration positions. Then he started his own company, WW Associates Management & Consulting of Scottsdale. He credits his quick rise to success to business assistance from both the SBA and VA.
With assistance from the SBA’s Small Business Development Center (SBDC), the company was awarded its first contract for $173,000 in 2015. The following year, the company was awarded additional projects totaling over $1.5 milion with Fort Huachuca.
In recognition of his achievements, Willis and his company have received a number of honors including the SBDC 2017 Success Award. It honors not only personal success, but also the positive impact on communities and to the Arizona economy.
Willis said more needs to be done to get the message out to veteran entrepreneurs about assistance programs. That’s one reason he dedicates time to mentor veterans and team up with veteran business owners.
“Maybe it was the era I was raised in but I’ve always given back to the extent I can,” Willis said. “This sounds kind of corny, but when we served in the military, we always backed each other up. Once you’re out, that continues for life because you’re a veteran for life.”
For more information on the resources available for veteran entrepreneurs, visit www.sba.gov/veterans.