Fostering Banking Relationships with Veterans

by: Smith and Howard

November 13, 2017

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According to the U.S. Department of Veterans Affairs, approximately 20 million military veterans live in the United States. Many former service personnel find employment in the civilian sector. Millions of others decide to launch businesses. Veteran-owned businesses can be a lucrative market niche for bankers who take the time to understand the owners’ specific military experience and needs. 

Creating relationships is key

Here are some ways to foster banking relationships within the veteran business community:

Ask your employees with military experience for help.

Establishing a strong connection with a veteran who owns a business depends on your ability to establish trust. Regardless of their age, veterans share a common bond — especially if they served in the same branch of service.

If you have former service personnel on your payroll, ask for their input to help you connect with veteran business owners. Learning about veterans’ needs and concerns can help ensure that your institution sets the right tone and foundation for mutually beneficial business relationships. It also can help you target your outreach strategies more effectively.

Develop marketing materials to target the veteran community.

Create marketing materials that focus on how your institution helps veterans establish and grow businesses. Mine your loan portfolio for borrowers with military experience and develop compelling case studies that showcase your bank’s role in helping those veterans become successful business owners.

Learn military terminology.

Every branch of service uses different jargon and terminology that’s foreign to civilians. Take the time to learn key phrases and terms of the service branches where your borrowers and loan prospects spent their career. By doing so, you’ll demonstrate your willingness to build rapport and relate to veterans in their own language.

Network with veterans who own businesses.

A number of public and private sector organizations help veterans transition to the civilian sector. Reach out to those organizations in your area and offer to host a presentation that helps them learn how to fund their businesses.

Connect with franchisors.

In addition to starting businesses from scratch, some veterans decide to open franchises. Many large, well-known companies actively seek out veterans to run their franchises. For example, the VetFran organization, part of the International Franchise Association, helps veterans and their spouses access franchising opportunities. Determine whether it makes sense for your bank to serve as a preferred banker through VetFran or another franchise organization.

Seek out military families.

Each service branch maintains groups to support spouses and family members during a service member’s deployment. Consider sponsoring an event as a means of connecting with family members of active service personnel. When the time comes for veterans to leave government service, their spouses will be aware of your bank’s services and commitment to the veteran community.

Acknowledge military birthdays.

The Army, Navy, Marine Corps, Coast Guard and Air Force celebrate their birthdays every year. Add these dates to your marketing calendar and publicize each service branch’s birthday on your website. On each service branch birthday, check in with existing customers and loan prospects who served in that branch — or consider hosting birthday “meet and greets” at your branch for veterans.

Use social media to connect.

Former service personnel often connect with other service members using social media. If you employ someone with service experience, consider inviting them to join relevant groups and, when appropriate, interact with their members on behalf of your bank.

Education matters

Given their lack of business experience and limited credit histories, veterans’ loan requests may be difficult to get through underwriting. Moreover, the prospect of applying for a loan can easily become overwhelming for a veteran who may have spent his or her entire life in uniform. Educating veterans on the process can help improve the quality and quantity of loan applications your institution receives.

The skills and values the military instills, combined with a bank that takes the time to invest and nurture a long-term relationship, can help veterans excel in civilian life — and lead to a stronger loan portfolio.

How the SBA supports veteran-owned businesses

The U.S. Small Business Administration (SBA) provides the veteran community with several resources to start a business or open a franchise. Some SBA programs and classes that might provide your bank with the ability to target the veteran community include:

Banker Match. This program connects small businesses with SBA-approved bankers.

SBA Veterans Advantage. This program guarantees loans to approved businesses with at least 51% ownership by veterans or military spouses.

Boots to Business. This classroom training program in entrepreneurship is offered as part of the Department of Defense’s Transition Assistance Program (TAP).

Boots to Business Reboot. This is another, more intensive, course in entrepreneurship.

Veteran Women Igniting the Spirit of Entrepreneurship. This 15-day online course provides women veterans and female spouses with an introduction to entrepreneurship.

It’s important to note that government programs designed to support the veteran community are subject to change. Visit the SBA website for the latest program requirements.

For more information on Smith and Howard’s commercial banking services, please contact Alan Najjar at 404-874-6244.

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