The franchise industry has made it its mission to help military veterans secure funding in order to pursue their small business dreams– but why is it so important that former members of the armed services receive so much help? Aren’t they an obvious choice for financial support?

You would think so– and the loan environment for veterans is significantly better than it was a decade ago– but fiscal support for our nation’s heroes still isn’t where it should be.

Call me old-fashioned, but American businesses and banks should do all within their power and conscience to help former members of the military. After all, they offered up their lives in potential sacrifice for this nation. Can’t we help them settle into civilian life as small business owners?

The International Franchise Association has, through various programs like VetFran, done a great deal to rally support around military veterans. The IFA and various franchises have extolled the benefits of employing veterans, praising veterans’ ability to lead, to take direction and to execute intricate plans.

But banks don’t always see it that way.

When evaluating a loan application, banks look at:

1. Your history. Banks will check your financial status and personal credit history and your previous loan history. Banks believe we’re creatures of habit and that if we’ve demonstrated fiduciary responsibility in the past we’re likely to continue those habits now. But, if you’ve been in the military since your twenties you probably haven’t had time to develop and rich credit history.
2. Your cash flow. Preparing a cash flow statement with future cash flow projections is something banks take seriously. Doing so shows the bank that you’re aware of cash coming in and going out of your business. However, how many military personnel are taught how to prepare these kinds of statements?
3. Your collateral. Most loans are repaid in cash but lenders will want some kind of back up in case your business fails. Collateral– anything of value like a vehicle, real estate, savings, equipment or stocks and bonds– may be used as security for debt repayment. Again, many of those just leaving the military do not own real estate and, if they’ve been on tour for extended periods of time, have not needed a vehicle.

It’s for these reasons that some banks like TD Bank, with urging from the IFA and some franchises, have given some preferential treatment to veterans. As more and more action is taken to help veterans become business owners banks should follow suit. Furthermore, as banks are desperate to lend they’ll consider more and more loans.