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), JPMorgan Chase ( JPM), U.S. Bancorp ( USB), TD Bank ( TD) 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.
The SBA already partners with Syracuse University through its the Entrepreneurship Boot Camp for Veterans with Disabilities program. Now in its fourth year, the program also provides training on how disabled vets can start and grow a small business. Also see: Starting a Business? Move To One Of These 6 Cities The initiative also complements SBA's new partnership with the National Association of Development Companies (NADCO) VetLoan Advantage, a strategic initiative that offers small business financing discounts and rebates on commercial real estate and working capital SBA loans and training to veterans who own businesses or are interested in small business ownership. Also see: 8 Hot Industries for Startups in 2013 NADCO is the national trade association for certified development companies, which are non-profit companies that have been certified by the SBA to provide financing for small businesses under the SBA's 504 loan program - the agency's most-often used long-term financing program. Last year, the industry provided roughly $6 billion in financing to 10,000 small businesses, it said. Under the VetLoan Advantage, veterans are eligible to take advantage of a cash rebate up to $3,000 for every SBA 504 loan funded to help offset their loan expenses, including appraisal and environmental reports. -- Written by Laurie Kulikowski in New York. Follow @LKulikowski To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com. >To submit a news tip, email: email@example.com.
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