“I can’t tell you how many horror stories I’ve seen of individuals that wanted to get into business but had nowhere else to turn. We’re trying to let people know that there are alternatives to conventional lenders that always require collateral. I’ve seen individuals borrow money on credit cards and now have up to $80,000 in debt on credit cards and are paying that money back with a 30% interest rate.”
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Why Listen:
Michael is a great example of someone who - after 27 years of military service - goes on to a fulfilling and very different civilian career. His company - My Military Loans - has funded over 81 military Veteran companies. He shares more about My Military Loans, as well as advice for aspiring Veteran entrepreneurs. Many of the businesses he helps fund are franchises, so be sure to check out the show notes, which features over 5 other episodes related to franchises and entrepreneurship.
About Michael:
Michael Fuller is the founder & CEO of My Military Loans which provides working and startup capital for veterans to launch and grow businesses with a focus on fighting back against predatory lenders taking advantage of veterans. LTC Fuller retired on April 30, 2017 from the United States Army after completing over 27 years of service. LTC Fuller entered the United States Army on December 5, 1988 as a Private First Class, serving for over 10 years as an enlisted soldier promoted to the rank of Sergeant. LTC Fuller was commissioned in March 1999 as a First Lieutenant and subsequently rose to the rank of Lieutenant Colonel.
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Selected Resources:
Franchise related episodes:
BTU #129 - Veterans & Franchises (John W. Francis, aka "Johnny Franchise") - https://www.beyondtheuniform.io/blog/btu-129-veterans-franchises-john-w-francis-aka-johnny-franchise?rq=franchise
BTU 141: The CEO of Franchise Business Review talks about Vets in Franchises (Eric Stites) - https://www.beyondtheuniform.io/blog/btu-141-ceo-franchise-business-review-talks-vets-franchises-eric-stites?rq=franchise
BTU 147 - Founding Sport Clips Haircuts & Building 1700 Franchises(Gordon Logan) - https://www.beyondtheuniform.io/blog/btu-147-founding-sport-clips-haircuts-building-1700-franchises-gordon-logan?rq=franchise
BTU #178 - Army to Franchise Development (Nic Gray) - https://www.beyondtheuniform.io/blog/btu-178-army-to-franchise-development?rq=franchise
BTU #132 - Active Duty to Chick-fil-A Franchise Owner (Marlon Terrell) - https://www.beyondtheuniform.io/blog/btu-132-active-duty-chick-fil-franchise-owner-marlon-terrell?rq=franchise
Veteran Business Outreach Center - available for Veterans to research and find out what it would take to start their business; completely free.
SBDC - Small Business Development Centers - the advice they offer is free.
Florida Entrepreneur Business Association - most states have these with resources to help people in the military
Syracuse University - Boots to Business, closely aligned with TAPs and is free for Veterans
Transcript & Time Stamps:
2:00
Joining me today from White Springs, Florida is Michael Fuller. Michael Fuller is the founder & CEO of My Military Loans which provides working and startup capital for veterans to launch and grow businesses with a focus on fighting back against predatory lenders. LTC Fuller retired on April 30, 2017 from the United States Army after completing over 27 years of service. LTC Fuller entered the United States Army on December 5, 1988 as a Private First Class, serving for over 10 years as an enlisted soldier promoted to the rank of Sergeant. LTC Fuller was commissioned in March 1999 as a First Lieutenant and subsequently rose to the rank of Lieutenant Colonel.
3:06
What lead you start My Military Loans?
I wanted to do something that would allow me stay connected to the military community. I joined when I was 31 years old. I turned 32 in basic training. It was the best decision I ever made. I left the military at age 60 as a Lieutenant Colonel. At that time, I had developed a desire to continue to help military members. I started My Military Loans as a way to help military members and veterans that want to start their own business.
I’ve now been doing this since October 2015. Since then, we’ve funded 81 individuals using the M5 loan product which is exclusively offered by My Military Financial Services. We develop the M5 loan which allows for special advantages that gives veterans access to funding for business ventures.
5:49
How does that work for a veteran that wants to secure funding through the M5 loan?
The M5 loan is available to active duty military members and honorably discharged veterans. The criteria is that you must have at least a 685 credit score, no more than $15,000 in credit card debt, the ability to do an 11% cash injection prior to the loan funding, and a net worth of at least the amount of the loan.
You also need to have an income that is at least half the amount of the loan. For example, if you want a $120,000 loan, your income needs to be at least $60,000.
The loan is totally backed by the Small Business Administration.
Additionally, it’s a non-collateralized loan so there is no requirement of a collateral to secure the loan. The interest rate for the loan is 7.75%. That rate can go up or down depending on how the Fed manages the money and interest rates.
9:49
Why is it important that the loan is backed by the SBA?
The SBA was started by President Eisenhower in the 1950s. It’s one of the few government agencies that is completely self-sustaining. Everyone knows that small business and entrepreneurs are really the fuel of our country’s economy.
The SBA and President Trump have taken a very aggressive approach at getting more veterans into the business world. The purpose of this is to make sure veterans have everything they need to become successful entrepreneurs. Also, as veterans enter the business world, they are able to contribute to our nation’s economy.
12:20
What does it mean that there is no post-liquidity closing requirement?
Normally for post-liquidity closing on an SBA loan, they want to see at least 30% of the total loan amount. For example if you borrowed $150,000 and 30% post-liquidity was required and you had to do a cash injection of 20%. So 20% of $150,000 is $30,000, they would still want to see a $30,000 post-liquidity amount in your business account. So you would need $60,000 to get into that loan.
With the M5 product, you would only need $17,000 cash to get a $150,000 loan.
13:25
You mentioned that 81 individuals have received M5 loans. What kinds of business are these people going into?
Most are going into franchising. The good thing about franchises is they’re turn key because there’s a template that is already established. In the United States today, there are over 4,000 franchise opportunities. Each one isn’t right for everyone so a veteran can really consider what franchise or type of business might appeal to them.
So about 97% of our loans were for franchises. The other 3% were for veterans looking to start their own business. Those businesses have including consulting and home auto repair services.
16:15
I love hearing that you’ve supported veterans going into franchising. I’ve interviewed several veterans that have gone this route and I think it can be a great fit for people getting out of the military.
Absolutely. You’ve interviewed Nic Gray and he is a great resource for any veteran looking to get into franchising. Military veterans are great for franchises. There have been studies that have indicated that veterans going into franchising find more success than people off the street.
17:25
What was it like starting your own company after so many years in the military?
I can tell you right now that being a business owner is a whole different world. You really have to do a gut check if you want to go that route. I have a bi-weekly payroll that I have to meet in which my employees are relying on me to make sure they get paid. So you’re striving very hard to keep the doors open and make a profit.
It’s certainly been enjoyable and also an eye opening experience. If you want to start your own business, come up with a good mission statement and make sure it’s what you really want. And once you commit to the idea, make sure you’re all in..
For anyone that has served in the military for any length of time, you’ve gained leadership experience. The military teaches you to be a leader better than any other organization. So take those skills and apply them to the next chapter of your life. As a small business owner, you can make a positive impact on your community and our country.
20:45
How can veterans avoid predatory lending?
I can’t tell you how many horror stories I’ve seen of individuals that wanted to get into business but had nowhere else to turn. We’re trying to let people know that there are alternatives to conventional lenders that always require collateral. I’ve seen individuals borrow money on credit cards and now have up to $80,000 in debt on credit cards and are paying that money back with a 30% interest rate.
I urge people that are considering going down that road not to do it. I would be happy to talk to any veterans in this position. You don’t want to be in a position where you’re negatively impacting your credit score for the rest of your life.
The M5 loan is a structured product so you know what you’re payment is going to be. The only unknown is what the Fed will do next as far as interest rates.
What I tell people is that the first 24 months of owning your own business is the most difficult. So when someone wants to secure an M5 loan, I sit down with them and talk about exactly what kind of money their business will need to successfully make it through those 24 months.
25:05
Are there any resources you would recommend?
I recommend SBDC - small business development centers. Any veteran can go to one of these locations and receive free advice regarding their business.
VBOCs - Veteran Business Outreach Centers are also locations veterans can go to to receive free information about resources available to them as they start their own business.
Most states have a Veteran Business Association and they can be great resources as well.
Syracuse University has a Boots to Business program which is a free program to introduce veterans to tools needed to start their own business.
27:00
Do you have any last words for our listeners?
You have to do your homework. Right now we’re living in an era of economic growth that is unheard of. The business climate is very open to someone that has a good idea.
Don’t be afraid to talk to some franchises that you might be interested in. And if you want to start your own business, reach out to some of those resources I mentioned.
If you’re looking for a loan, please reach out to me. I’m happy to talk to any military member of veteran about this.