Access to Capital is Greatest Barrier for Veterans with Dreams of Business Ownership

Despite the want, the number of veterans starting businesses continues to decline.  

Syracuse, NY, Nov. 20, 2017. If home ownership is one quintessential American dream, owning your own business is another. While a higher percentage of veterans are self-employed compared to non-veterans, the rate of veteran entrepreneurship has seen a significant decline. Forty-nine percent of veterans returning from service in World War II started businesses. Today the rate of post 9-11 veterans doing the same has fallen to 5.6 percent (from 12.3 percent in 1996).

The question now becomes why are we losing a potential class of business owners who come out of the military well equipped with important skills and attributes for success as entrepreneurs? A new study of veteran business owners, conducted by the Institute for Veterans and Military Families at Syracuse University (IVMF) in collaboration with Bunker Labs, takes an in-depth look into factors that account for the motivation, success, failure or survival in veteran entrepreneurship. The report, Bridging the Gap, Motivations, Challenges, and Successes of Veteran Entrepreneurs, sees veteran business owners cite difficulty accessing capital as one of three core impediments to starting or expanding their businesses. Limited or no opportunities to network and difficulty developing mentorships were the other top blockers.

The means by which veterans finance their business has wide-reaching impacts. For one, the average age of a veteran entrepreneur. Forty eight percent are 65 years old or older vs. 15.6 percent for all business owners. This in large part a consequence of their access to capital. As empty nesters, this group is through their most pressing financial responsibilities: raising children and paying off mortgages. Some also leverage their military retirement and healthcare to provide stability to a business.

More veteran business owners—59.4 percent—use personal and family savings for their businesses versus their non-veteran counterparts. That’s not true with business loans. A higher percentage of non-veteran entrepreneurs use bank loans. The challenge of accessing capital is, for some, due to regulatory restrictions on lending to their sector. A few also expressed experiencing predatory lending when seeking out bank loans. “Speed to capital is a real challenge and predatory lenders are using that as a capture point,” says Walter Allen, Founder, Acumen. Allen served in the Army.

The continued loss of veteran-owned businesses that lack cash or financing will have an impact on our economy as veteran-owned businesses employ over 5 million U.S. workers and cover a payroll nearing $200 billion. This number could continue to go down as would the incomes for households of veteran entrepreneurs who have higher incomes and greater wealth.

“We cannot continue to watch as veterans become a smaller and smaller part of the U.S. entrepreneurial population,” says Dr. Mike Haynie, IVMF Executive Director and Vice Chancellor for Strategic Initiatives and Innovation at Syracuse University. “Veterans and entrepreneurship are a natural fit given their ability to take risks, be determined, think on their feet and survive challenges. We must continue to encourage them to pursue this path, and support them every step of the way.”

“We know the ‘who’ and the ‘what’ when it comes to veteran entrepreneurship—but we’ve never looked at the ‘why’ and the ‘how’, and this study does just that,” says Misty Stutsman, IVMF Director of Entrepreneurship and Small Business. “The results provide a roadmap for those looking to support veteran-owned businesses and those businesses on their entrepreneurial journeys.”

Bridging the Gap, Motivations, Challenges, and Successes of Veteran Entrepreneurs includes a list of resources and a recommendations checklist to aid the prospective and current veteran entrepreneurs as well as veteran service organizations, financial advisors, institutions, leaders, and others helping the self-employed veteran. It is part of Operation Vetrepreneurship, a research project aimed at better understanding the needs of veteran and military-connected entrepreneurs.

This is the first from that series of papers dedicated to the veteran business owner. Information from these reports hopes to further inform veteran and entrepreneurship service organizations on factors most influencing veteran entrepreneurs today, and encourage and support successful veteran entrepreneurship for decades to come. For more information please visit IVMF Research & Evaluation.

Media Contact:
Stephanie Salanger
Director, Communications & Media
Office of Veteran and Military Affairs
Institute for Veterans and Military Families
Mobile: 315.378.8171; Email:

About the Institute for Veterans and Military Families at Syracuse University
The Institute for Veterans and Military Families (IVMF) is the first interdisciplinary national institute in higher education focused on the social, economic, education, and policy issues impacting veterans and their families. Through its professional staff and experts, the IVMF delivers leading programs in career, vocational, and entrepreneurship education and training, while also conducting actionable research, policy analysis, and program evaluations. The IVMF also supports communities through collective impact efforts that enhance delivery and access to services and care. The Institute, supported by a distinguished advisory board, along with public and private partners, is committed to advancing the lives of those who have served in America’s armed forces and their families. For more information, visit IVMF and follow the IVMF on FacebookTwitter and Instagram.