Bank of America is seeding a second round of financing for its Veteran Loan Fund. Specifically, it is doubling a two-year-old commitment that has already funded more than 500 small businesses built by former military personnel. The bank says that this has already created or retained more than 3,000 jobs across 37 states. The fund’s first $15m round, closed in 2022, was deployed in less than 12 months.
The Veteran Loan Fund is a national collaborative of a growing number of Community Development Financial Institutions (CDFIs) and specialised veteran service organisations. It provides 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.
“Many veterans have the drive, discipline and leadership skills to fuel small business growth. But they lack the funding or network to help them grow. We have seen the benefits of low-cost capital in catalysing entrepreneurship. We are pleased to continue to support this work,” said Dan Letendre, head of CDFI Lending at Bank of America.
“Access to responsible capital is a key issue for military veteran entrepreneurs,” added Grant Bennett, Director of Veteran Programmes and Operating Manager of the Veteran Loan Fund. “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 support of organisations like Bank of America.”
$100m funding across the US by 2027
The Veteran Loan Fund plans to grow to $100m across the US by 2027. This is an amount equal to the estimated annual demand for capital from veteran entrepreneurs who lack any funding for their businesses. Its first $15m round, fully deployed in less than 12 months, was made possible by a $5m 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 $10m in support of the new $25m fund.
Bank of America is the largest investor in CDFIs, with $2bn in financing to more than 260 CDFIs across America.
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