NEW YORK ( TheStreet) - Just in time for Memorial Day, the U.S. Small Business Administration Tuesday began a lending program that will involve 20 of the country's largest banking institutions.
Wells Fargo (WFC - Get Report), JPMorgan Chase (JPM - Get Report), U.S. Bancorp (USB - Get Report), TD Bank (TD - Get Report) head the list. The aim is to increase lending to military veterans by 5% per year over the next five years.
Veterans looking to start a business following deployment face special challenges in raising capital, particularly as the recession has tightened borrowing through conventional bank loans.
The SBA in conjunction with its lending partners -- which includes 100 additional regional and community lenders -- expects to assist an additional 2,000 veterans on top of its current workload with $475 million of capital to start or expand small businesses.Also see: From Battlefield to the Business World -- Veterans Make It on Their Own Veterans are more likely than those with no active-duty military experience to be self-employed. Approximately 2.4 million, or 9%, of small businesses are veteran-owned, according to the SBA. That number is expected to rise dramatically as more than 1 million veterans are expected to transition out of military service by 2015, the International Franchise Association has previously said. The SBA has backed more than 3,200 loans to veterans worth more than $1.25 billion, as of Sept. 30, 2012, according to the Associated Press. An SBA spokesperson was not immediately available to confirm the number. SBA Administrator Karen Mills announced the initiative on Tuesday at Fort Bragg, N.C. "Through this partnership with national lending partners and regional and community lenders across the U.S., we stand ready to serve veteran entrepreneurs with loan-guarantees, entrepreneurial training and resources that are critical tools to help them start businesses, drive the local economy and create jobs for themselves and their communities," Mills said. Also see: Rogers: My First Day As a Military Embed Through the SBA's Office of Veterans Business Development, veteran-owned small businesses can get financing assistance, business training and mentoring as well as assistance with federal procurement programs. The lending initiative is a part of the SBA's recently launched Operation Boots to Business: From Service to Startup initiative, in which it partnered with the U.S. Department of Veterans Affairs and the U.S. Department of Defense to develop a national entrepreneurship training program to help veterans transition back into civilian life.