Business owners face no shortage of challenges when launching and scaling their companies. Entrepreneurs across all demographics—especially Black and Hispanic/Latino individuals, women and veterans—consistently cite access to capital as one of their biggest obstacles to success. 

49% 

Military-affiliated entrepreneurs who reported lack of access to capital as the No. 1 barrier hindering their business venture or entrepreneurial goals¹

“Securing access to capital is essential to business growth. But it can present some unique challenges for veterans,” said Alex McKindra, a former Air Force captain, Co-Head of Veteran Initiatives for JPMorgan Chase Commercial Banking, and Managing Director for J.P. Morgan Technology Corporate Client Banking.

What can veteran business owners do to mitigate those challenges? Business leaders with military backgrounds share their experiences and what they’ve learned along the way.
 
Creditworthiness, disrupted

Once businesses are established, lenders can review an applicant’s business credit score. But newer ventures don’t have a credit history, so lenders evaluate that individual’s personal credit score, McKindra said.

That can be an issue for veterans. While on active duty, members of the military often don’t get the chance to build a detailed record of loans, mortgages and credit cards.

“Building and maintaining a good credit score is difficult for many Americans, but for veterans—especially those who have moved frequently or spent time overseas—establishing a strong credit history to support their score can be a particular challenge,” said Terry Hill, a former U.S. Army field artillery captain and Co-Head of Veteran Initiatives for JPMorgan Chase Commercial Banking.

This was certainly the case for Andrea Sloan, a former specialist in the U.S. Army Reserve, who enlisted as a path toward education.

“I joined the military as an opportunity to go to college,” said Sloan, president of Groundbreakers Hydrovac Excavation Services in Indianapolis. “Building a financial profile was not top of mind for me.”

In her experience, service members are often facing financial instability when they enlist. That adds to the challenges of getting a business off the ground after their military service ends. Building a financial foundation has to begin somewhere to disrupt the cycle.

“If a veteran has personal credit but is looking to build business credit, they should consider applying for a business credit card,” McKindra said. “They likely will have a low credit limit but can use the card to cover small bills each month. They will then start to build their credit history by paying off the balance in full before payment is due each month.”

Veterans also can boost their business creditworthiness by working with vendors who relay information to business credit-reporting agencies. Buying supplies and materials—and paying for them in a timely fashion—builds the necessary credit history for additional borrowing.

“This can feel like a slow, tedious process,” McKindra acknowledged. “But veterans have to remember that showing consistency with their credit is the most important factor in improving their financial profile.”
 
Who and what you know matter

Few entrepreneurs start out understanding the different types of capital to pursue—and when. That’s where a professional network can help new entrepreneurs sharpen financial literacy as their business grows.

Owners are understandably reluctant to reveal that they may not know something, so they sometimes shy away from asking potential lenders for career or financial guidance.

“If I want you [the financial institution] to lend me money, I don’t want to appear unprepared or uninformed. I want you to say yes,” Hill said. “That’s where having a network of people who you aren’t asking things of can help. They can provide knowledge you wouldn’t otherwise have.”

Organizations like Bunker Labs, Boots to Business and the Veterans Business Outreach Center are dedicated to helping veterans expand their professional circles and succeed, McKindra said.

Over time, working with such groups and talking with peers can expand an entrepreneur’s knowledge base—and bring more clarity on business decisions.