June 30, 2021
By Delaney Sexton
C-Suite Wednesday- Veteran Entrepreneurs Receive Less Loan Approvals From Large Banks, Small Banks, and Online Lenders
“Recent research indicates there may be unique factors hindering veterans’ pursuit of entrepreneurship and business ownership,” says the SBA Office of Advocacy in a report issued yesterday. “As Vietnam veterans age out of the workforce and millennial veteran entrepreneurs become the next generation of veteran entrepreneurs, ensuring their success and opportunity remains vital.”
The report shares four policy recommendations:
- Tailor support for female millennial veterans and Hispanic and Black millennial veterans pursuing entrepreneurship.
- Continue support for veterans with service-connected disabilities to start their own businesses.
- Increase network and mentorship support for a geographically mobile population of entrepreneurs.
- Improve financial literacy related to business and entrepreneurship for military and veteran populations.
• Of millennial-aged veterans, only 3.4% are entrepreneurs. 4.8% of nonveteran millennials are entrepreneurs, and 13.2% of the older generations of veterans are entrepreneurs.
• Millennial veteran entrepreneurs are more diverse than previous generations of veteran entrepreneurs. 6.7% of older veteran entrepreneurs are Black while 9.6% of millennial veteran entrepreneurs are Black. 13.2% of millennial veteran entrepreneurs are Hispanic compared to only 4.6% of older veteran entrepreneurs. This increase in diversity led to a 14.6% decrease in the representation of white veteran entrepreneurship from the old generation to the millennial generation.
• 14.8% of millennial veteran entrepreneurs are women compared to 4.7% of older veteran entrepreneurs being women. Between 2007 and 2012, the number of women veteran-owned businesses tripled, and there was a 23% increase of nonveteran women-owned businesses.
• 29.7% of millennial veteran entrepreneurs report having a service-connected disability when only 16% of the older generation of veteran entrepreneurs report having a service-connected disability.
• Although veteran-owned businesses submit applications for loans, lines of credit, and cash advances more frequently than nonveteran-owned businesses, they experience lower approval rates from large banks, small banks, and online lenders.