After distributing millions of dollars to veteran-owned businesses in the last year, one of the country’s leading financial institutions, Bank of America, is looking to the new year to repeat its process. Announced in late 2023, Bank of America will be seeding a second round of financing for the Veteran Loan Fund, doubling a two-year-old commitment that has already funded more than 500 small businesses built by former military personnel. These companies alone have created or retained more than 3,000 jobs across 37 states. The fund’s first $15 million round, closed in 2022, was deployed in less than 12 months.
“Many veterans have the drive, discipline and leadership skills to fuel small business growth but lack the funding or network to help them grow,” Dan Letendre, head of CDFI Lending at Bank of America, stated in an official press release. “We have seen the benefits of low-cost capital in catalyzing entrepreneurship and are pleased to continue to support this work.”
The Veteran Loan Fund is a national collaborative of a growing number of Community Development Financial Institutions (CDFIs) and specialized veteran service organizations providing responsible capital and technical assistance to underserved veteran entrepreneurs. The fund offers an online platform that connects military veterans and their spouses with mission-focused lenders and education partners to help them build and sustain small businesses. Eligible veterans benefit from below-market-rate funding and free business coaching.
CDFIs currently enrolled in the program include the Black Business Investment Fund in Florida, Wisconsin Women’s Business Initiative Corporation, and Access to Capital for Entrepreneurs in Georgia. The group also works with several technical assistance programs, including Bunker Labs, SCORE, Veteran Business Outreach Centers and Vet to CEO.
The Veteran Loan Fund plans to grow to $100 million across the nation by 2027, an amount equal to the estimated annual demand for capital from veteran entrepreneurs who lack any funding for their businesses. Its first $15 million round, fully deployed in less than 12 months, was made possible by a $5 million commitment of long-term, below-market rate lending capital from Bank of America as lead investor in 2021, along with support from other major institutions. In this round, Bank of America will provide $10 million in support of the new $25 million fund.
Director of Veteran Programs and Operating Manager of the Veteran Loan Fund Grant Bennett stated of the commitment, “Access to responsible capital is a key issue for military veteran entrepreneurs. Now is the time to scale our impact within the veteran business community. We can only do this through the work of our CDFI partners and the support of organizations like Bank of America.”
Bank of America is the largest investor in CDFIs, with $2 billion in financing to more than 260 CDFIs across all 50 U.S. states and the District of Columbia.
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