The skills you learned in the military, discipline, leadership, and problem-solving, translate naturally to business ownership. That's why veterans have historically started businesses at higher rates than their civilian peers, but transitioning from military service to entrepreneurship involves more than just a good idea and hard work. Your financial foundation matters just as much as your business plan.
For veterans separating from Fort Bragg or anywhere else, starting a business means navigating funding options, keeping your retirement savings on track, understanding tax implications, and building a financial strategy that supports both your business and your personal goals.
The Veteran Entrepreneur Landscape
About 1.6 million businesses in the United States are owned by veterans. These businesses collectively generate over $1 trillion in revenue annually and employ nearly 6 million people. (U.S. Small Business Administration) Veterans are 45% more likely to start their own business than civilians. (Office of Industrial Base Growth)
The leadership, discipline, and adaptability you developed in service are real advantages in the business world, but those skills need to be paired with solid financial planning to turn your business idea into long-term success.
Funding Your Veteran-Owned Business
Access to capital consistently ranks as the top challenge facing veteran entrepreneurs. The good news is there are funding options specifically designed for veterans, along with traditional business financing that recognizes the value of your military service.
SBA Veterans Advantage Program
The Small Business Administration's Veterans Advantage program offers reduced fees on SBA-backed loans for veteran-owned businesses. If you own at least 51% of the business, you may qualify for substantial fee reductions on SBA 7(a) and SBA Express loans.
SBA Express loans can provide up to $500,000 with a faster approval process (typically within 36 hours). For veterans, the guarantee fees are reduced or waived entirely on loans up to $350,000. This can save you thousands of dollars in upfront costs.
Standard SBA 7(a) loans go up to $5 million and can be used for working capital, equipment purchases, real estate, or refinancing existing debt. Terms can extend up to 25 years for real estate or 10 years for other purposes.
Who Qualifies
The Veterans Advantage program is available to veterans, service-disabled veterans, active duty service members participating in the Transition Assistance Program, Reservists, National Guard members, and spouses (including widowed spouses) of service members.
You'll need to provide your DD-214 or equivalent documentation confirming veteran status when applying.
Personal Savings and Retirement Funds
Many veteran entrepreneurs use personal savings to fund their startups. While this gives you complete control and avoids debt, you should consider the tradeoffs carefully.
Using your TSP or IRA to fund a business is possible, but it comes with significant tax implications. If you're under 59½ and take an early distribution, you'll typically face a 10% penalty plus income taxes on the amount withdrawn. Some entrepreneurs use a Rollover for Business Startups (ROBS) arrangement to access retirement funds without penalties, but these are complex and come with ongoing compliance requirements.
Before tapping retirement savings, consider whether traditional business financing might preserve your long-term financial security while still getting your business off the ground.
Keeping Retirement on Track While Building Your Business
Starting a business often means irregular income, especially in the early years. That reality can make retirement planning feel like a luxury you'll get to later, but waiting can cost you years of compounding growth.
SEP-IRA for Self-Employed Veterans
A Simplified Employee Pension (SEP-IRA) allows self-employed business owners to contribute up to 25% of net self-employment income, with a maximum contribution of $72,000 for 2026. The beauty of a SEP-IRA is its flexibility. In profitable years, you can contribute generously. In leaner years, you can contribute less or skip it entirely without penalty.
SEP-IRAs are simple to set up and maintain. There's no annual filing requirement with the IRS, and you can establish one as late as your tax filing deadline (including extensions) for that year.
The downside? To max out a SEP-IRA contribution, you'd need substantial income. To hit the $72,000 limit, you'd need approximately $288,000 in net self-employment earnings.
Solo 401(k) for Maximum Contributions
A Solo 401(k), also called an Individual 401(k), often makes more sense for veteran entrepreneurs who want to maximize retirement contributions at moderate income levels.
With a Solo 401(k), you contribute in two ways. As the employee, you can defer up to $24,500 in 2026 ($32,500 if you're 50 or older, or $35,750 if you're age 60-63 thanks to enhanced catch-up contributions). As the employer, you can contribute up to 25% of your net self-employment income.
The total contribution limit is $72,000 for 2026 ($80,000 if 50 or older, $83,250 for ages 60-63).
Here's why this matters: A veteran entrepreneur earning $80,000 in net business income can contribute $24,500 as an employee deferral plus approximately $18,570 as an employer contribution, totaling about $43,070. Under a SEP-IRA, the same person maxes out at roughly $18,570. That's $24,500 less in tax-deferred savings.
Solo 401(k) plans also allow Roth contributions, which can be valuable for younger business owners or anyone expecting higher tax rates in retirement. And unlike SEP-IRAs, Solo 401(k)s allow participant loans up to $50,000, giving you access to funds if needed.
The tradeoff is that Solo 401(k) plans require more administrative work. Once plan assets exceed $250,000, you'll need to file Form 5500-EZ annually.
Tax Considerations for Veteran Business Owners
Understanding your tax situation as a business owner is different from understanding it as a W-2 employee or service member.
Self-Employment Tax
As a business owner, you're responsible for both the employer and employee portions of Social Security and Medicare taxes. This self-employment tax is 15.3% of your net earnings, on top of regular income tax.
You can deduct half of your self-employment tax when calculating your adjusted gross income, and you can deduct business expenses that reduce your taxable income.
Quarterly Estimated Taxes
Unlike military pay, where taxes are withheld automatically, business owners typically need to make quarterly estimated tax payments. Missing these payments or underpaying can result in penalties, so setting aside money throughout the year is important.
North Carolina Considerations for Fort Bragg Veterans
If you're starting a business in North Carolina after separating from Fort Bragg, remember that while military retirement pay isn't taxed at the state level, your business income is subject to North Carolina's 4.25% income tax.
Business owners can deduct ordinary and necessary business expenses, which can significantly reduce taxable income. Keeping detailed records of business expenses from day one makes tax time much easier.
Balancing Business Growth and Personal Financial Security
The early years of business ownership often involve reinvesting profits back into the company. That's normal and often necessary. But completely sacrificing personal financial security for business growth can leave you vulnerable.
Emergency Fund
Before you leave steady military pay, or in your first year of business, build an emergency fund that covers 6-12 months of personal expenses. Business income can be unpredictable, especially early on. Having a personal safety net means a slow month doesn't become a personal financial crisis.
Separate Business and Personal Finances
Open a business bank account and keep business and personal expenses separate from day one. This makes bookkeeping cleaner, tax preparation easier, and provides a clearer picture of whether your business is actually profitable.
Pay Yourself
Especially in the early stages, many business owners take little to no salary, putting everything back into the business. While this might be necessary in the short term, make it a goal to pay yourself a reasonable salary as soon as the business can support it. You're working hard; your personal finances deserve attention, too.
Resources for Veteran Entrepreneurs
Beyond financing, there are programs designed specifically to support veteran business owners.
Boots to Business is a free SBA entrepreneurship training program offered through military installations as part of the Transition Assistance Program (TAP). Even if you've already separated, the Boots to Business Reboot program extends training to veterans regardless of time since service.
Veteran Business Outreach Centers (VBOCs) offer free business training, counseling, and mentorship. There are 31 VBOCs nationwide that can help with business planning, loan applications, and navigating the practical challenges of business ownership.
Service-Disabled Veteran-Owned Small Business (SDVOSB) certification can open doors to federal contracting opportunities. The government sets aside a portion of federal contracts for SDVOSBs, which can provide stable, creditworthy revenue that makes financing your business easier.
Making It Work
Starting a business after military service is both exciting and challenging. The discipline and leadership skills you bring to entrepreneurship are real advantages. But those skills need to be paired with smart financial planning.
Before you launch, think through your funding strategy. Understand the tax implications of self-employment. Set up retirement savings that work with irregular income. Keep your business and personal finances separate. And build an emergency fund that gives you breathing room when business is slow.
Your business idea deserves a solid financial foundation. Taking the time to get that foundation right makes the difference between a business that survives and one that thrives.
If you're a veteran in the Fayetteville, Southern Pines, or Fort Bragg area considering entrepreneurship, Good Life Financial Advisors works with military families and veteran business owners throughout the Sandhills. We understand the unique financial considerations of transitioning from service to business ownership, from funding decisions to retirement planning to tax strategy.
Contact us for a complimentary consultation to discuss your business plans and how we can help build a financial strategy that supports both your business and your personal goals.
Good Life Financial Advisors of NC serves veterans, military families, and business owners in Southern Pines, Fayetteville, and throughout North Carolina. Our team understands the financial transitions that come with military service and entrepreneurship.