Legislation will allow veterans to use GI Bill to start small businesses

An American Legion legislative priority for the 116th Congress is the expansion of GI Bill benefits to assist entrepreneurial veterans in obtaining access to small business capital. The Reserve Officer Association has proposed legislation that would allow transitioning servicemembers to use their Post-9/11 GI Bill benefits to start a small business.

The Post-9/11 Veteran Business Acceleration Act is sponsored by U.S. Army Major and Rep. Tulsi Gabbard, D-Hawaii, and is a pilot program of 500 veterans nationwide. The proposed legislation is set to be delivered at the end of October.

“We want to make sure that veterans have full opportunities and maximum ability to participate in the business world,” said Kevin Hollinger, legislative director for the Reserve Officer Association, during his presentation at The American Legion’s Veterans Small Business roundtable in Indianapolis Aug. 26 for the 101st National Convention. “This is a crucial part of where we think we need to move. Not everybody wants to go to college. Not everybody is capable of going to college.”

Hollinger shared that 7.2 percent of the nation’s 5.5 million businesses are veteran-owned.

“That number could increase greatly if veterans had financial backing to start a businesses as they were transitioning out of the military,” he said. “Veteran-owned businesses are important for the economy.”

The program will fall under the Department of Veterans Affairs and will provide qualified veterans with: mentorship and entrepreneurial classes, such as accounting and marketing; one year of basic allowance for housing based off the Post-9/11 GI Bill; $20,000 each year for up to three years. The bill will allow veterans to opt out of the business acceleration program, and they will be able to have the educational benefits remaining to them if they only use part of the stipend.

The business acceleration program is non-transferable to dependents based on the current proposed legislation, however, if after two years the veteran wants to leave, they have another year to use their benefits and transfer them.

Hollinger opened the floor up for questions about the proposed legislation. One question asked was why the program is under the Department of Veterans Affairs and not the U.S. Small Business Association (SBA). Hollinger said the SBA has no jurisdiction over the GI Bill; however, the bill “will require the VA and SBA to work together in helping a veteran who wants to use their Post-9/11 benefits.”

The idea of growing veteran-owned small businesses is something the SBA desires as they have seen a decline in veteran entrepreneurship in the past 20 years. In 1998, 16 percent of veterans in the labor force were self-employed. As of 2018, that number is 11 percent, according to Larry Stubblefield, associate administrator of SBA’s Office of Veterans Business Development. Stubblefield attributes some of the decline to inability to access capital, a strong veteran job market and millennials less likely to want to start a business.

During his presentation at the Legion’s Veterans Small Business roundtable, Stubblefield shared two ways American Legion members can help veteran entrepreneurs who are looking to start, grow or expand their business.

First, send them to SBA as “99.9 percent of the programs SBA offers are free,” Stubblefield said. SBA’s signature program is Boots to Business, where participants learn how to start a business from the bottom up. The program has had 100,000 graduates since 2013.

Second, remind them about the Veterans Small Business Enhancement Act of 2018 which was signed into law by President Trump in January. This legislation, which Stubblefield said will be underway by the second quarter of fiscal year 2020, adds veterans to the list of eligible recipients for federal surplus personal property, such as office equipment and furniture to specialized apparatuses, including scientific devices and heavy machinery.

To encourage growth with veteran small businesses, The American Legion helped SBA host its first Veterans Summit in July, where veteran small businesses and corporations talked about what corporate America is looking for when they partner with a veteran business. Moving forward, SBA is looking to partner with The American Legion and the Department of Agriculture “to focus the next Veterans Summit on rural communities, because The American Legion has pointed out that about 65 percent of our transitioning and retired servicemembers live in rural areas and we all know that in some rural places there’s a lot of developmental needs.

“What better way to help get rural areas to start veteran-owned small businesses?”