A Resource to Small Business Loans for Veterans

January 22, 2023 Business Loans
A Resource to Small Business Loans for Veterans

Small Business Loans for Veterans

If you’ve served in a branch of the United States military or armed forces, you are likely eligible for many key benefits. Many of these benefits are financial, and they apply to things like your student loans or business efforts. In fact, business loans for veterans are a popular way to finance your entrepreneurial efforts.

If you’re a new business owner and a veteran, pursuing the available loan options could help you launch the next step in your career. In this post, we’ll cover the fundamentals–like what a business loan is and how it helps. We’ll then offer suggestions for loans that are specific to individuals who have served in the military.

Keep reading to discover how a business loan for veterans could change the trajectory of your business, starting as soon as today!

What is a Business Loan?

A business loan is a form of financing that business owners can apply to receive. Basically, a business loan is a lump sum of cash, provided through a lender, that serves as capital to fund business activities. Whether you need to purchase equipment, cover operational expenses, or hire staff members, business loans can help in a pinch.

There are many different types of loan products available. These include short and long term loan options, in addition to loans with fixed or variable interest rates. The type and amount of loan you qualify for can depend upon your personal financial situation and your unique business needs.

Websites like The Credit Review can help you find top lenders, compare choices, and quickly navigate requirements. Don’t miss The Credit Review’s list of Top Business Loan Companies.

How SBA Loans for Veterans Differ from Other SBA Loans

In the United States, more than 2.5 million businesses are veteran-owned. While many of these are funded through personal investments, a good number of them require loans to get started. The United States Small Business Administration has initiated more targeted efforts to increase the availability of business loans for veterans.

The Small Business Administration also offers many different types of loans. Not all are geared towards veterans. Of the ones that do help veteran-owned businesses, the majority of loan amounts are under $350,000.

In addition to providing cash resources, the Small Business Administration also offers other valuable benefits to veterans. These include:

  • Business development and counseling
  • Training programs
  • Access to government contracts

Each of these unique benefits are designed to help former military members transition to civilian life. Additionally, veterans have unique opportunities to contract with the government. This encourages business growth for veterans who are getting started.

Qualifications

To qualify for a business loan, you and your business must meet the following qualifications.

  1. The business must be over 51% owned and/or controlled by veterans.
  2. The owner must be an official military veteran who was not dishonorably discharged.
  3. The owner can be a service-disabled veteran.
  4. If active duty military, the member can participate in the military’s Transition Assistance Program (TAP).
  5. The owner can be a member of the National Guard or a Reservist.
  6. The owner is the spouse or widow(er) of a veteran or active duty military member.

Requirements

To prove the above qualifications, veterans and their spouses may be required to provide the proper documentation. These forms are provided by the specific branch of the military. They include documents such as: Form DD 214, DD Form 2, United States Identification Cards, and others.

Additionally, to receive a business loan for veterans, the business must be:

  • Located within the United States of America
  • Able to conduct all business within the country
  • Able to meet the SBA guidelines for a small business
  • Willing to operate as a for-profit organization only
  • Willing to demonstrate a clear need for the loan

According to some resources, veteran-owned businesses may also be asked to show that they have exhausted other financing options as well.

The Application Process

For veterans, applications are taken in through the Small Business Administration. The application often requires proof of documentation regarding your military status. This is in addition to other important financial information that you would provide for other loans.

Loan Terms

As you pursue business loans for veterans, be aware that many of the available options include lender fees. These extra costs can range from 0.25 to 3.0 percent of the overall loan value. Additionally, interest rates still apply and may be variable or fixed.

Finding a Loan Provider or Lender

While being a veteran gives you the ability to pursue specific government-sponsored options, you can also apply for conventional loans. Throughout any point in your journey, you are still able to find, compare, and apply for traditional loans through banking institutions and online lenders.

If you find that you don’t qualify for these, or that they don’t meet your specific situation, a loan through the SBA could be the right choice. Some options include:

  • The SBA’s Veterans Advantage: This program applies to veterans who are approved for a standard 7(a) SBA loan. On loans of up to $350,000, eligible veterans could secure a 50% reduction in their loan guarantee fees. Over the life of the loan, this benefit could add up to several thousand dollars.
  • SBA Express: This program offers an expedited process for loan applications. While this means a faster turnaround time on applications, it could also mean that the SBA guarantees a lower percentage of the total loan amount.
  • Military Reservist Economic Injury Disaster Loans: This particular program is a bit different than other loans for veterans, in that it helps cover when business partners are called to active duty service. The total amount can be up to $2 million dollars and is designed to help cover expenses until a military member returns from service.
  • Veterans Business Fund: While this option is still in progress, it will eventually be useful for business owners who don’t meet the capital requirements set by other lenders. In the future, these non-interest-bearing loans will offer better repayment terms and more favorable conditions for veteran borrowers.
  • Veterans Small Business Awards: Although this is not a comprehensive loan program, this incentive is provided by StreetShares, a lending company run by veterans. These awards are given out annually and can range from $4,000 to $15,000. These awards are often reserved for businesses with a community focus or mission that extends beyond the scope of their business activities.

How to get started with business loans for veterans

If you’re not sure where to start, the Department of Veterans Affairs offers an Entrepreneurial Portal that can help you better understand the basics. The portal’s resources include important information about how to start a business, how to secure financing, and how to conduct business with federal agencies.

All of these tools are designed to equip veterans and their spouses with the tools they need to succeed in business. Additionally, resources such as the Navy Federal Credit Union can be a great starting point if you want to speak to an advisor one-on-one.

Other resource for veteran borrowers

If you’re new to the world of business, you may also want to check out resources that understand your unique experience as a military service member. This is especially true as you begin to transition out of active duty and invest capital into a new and growing business.

A few helpful outside resources for veterans and new business owners include:

  • Boots to Business: This free program is offered in partnership with the Small Business Administration and the Transition Assistance Program. It’s offered at several military installations around the country and provides valuable resources for launching a new business. Included in these resources is information about financing and choosing the best loan option.
  • Bunker Labs: Bunker Labs is another great resource, and it’s veteran-created! The focus of this nonprofit group is on providing resources and networking opportunities. Not only is it beneficial for veterans, but it also opens up doors of opportunity for hard working military spouses.
  • Patriot Boot Camp: This group is another nonprofit on a mission to equip military members and their spouses with important business tools. This nonprofit is on a mission to equip military members and their spouses with important business tools. Programs help activate new members, secure healthy mentorships, and create new business solutions.

Get support along the journey

Whether you’re looking to apply for a loan soon, or to simply learn more about your next financial move, The Credit Review can help. Using these detailed resources, you can learn how to navigate personal and business loans. You can also learn how to reduce your tax and debt burdens.

To start, check out Everything You Need to Know about Getting a Personal Loan Online. You’ll discover the basic principles of working online to secure the best loan option for you.

Can you really get a VA business loan?

Yes, you will need to provide relevant documents and proof of business, but VA business loans are common and extremely beneficial.

What benefits does a veteran-owned business qualify for?

Some VA business loans offer a reduction in fees or extra support options. The Small Business Administration offers financial and general support to veterans who own and operate businesses within the United States.

How do veterans get small business loans?

Any veteran wishing to secure a small business loan should begin researching lenders who work specifically with veterans and their families. You can expect a thorough application process and a discussion on how you plan to use the loan. If you have difficulty securing a loan, search for grants and other resources that may offer specific and targeted help to veterans.

What are the requirements for a small business loan?

For veterans, the requirements for a small business loan often include official paperwork from the military. Additionally, you may need to prove the location of your business and show how you operate.

What support is available to veterans with small businesses?

Support is available through the Small Business Administration. You can also find help through the Department of Veterans Affairs. Even if you’re not ready to apply for a loan today, you can learn about the resources and programs that are available for aspiring entrepreneurs.

About The Author

Ashley Davison avatar

Ashley Davison

Director of Operations, Credit Saint LLC

Ashley is currently the Chief Operating Officer for Credit Saint, previously working as a Logistics Coordinator at Ernst & Young. She is currently working toward an Executive Leadership Certificate from Cornell University.

With a degree in education, she is eager to teach the world everything she knows and learn everything that she doesn’t already know! Ashley is a FICO® certified professional, a Board Certified Credit Consultant, Certified Credit Score Consultant with the Credit Consultants Association of America and holds a Fair Credit Reporting Act (FCRA) Compliance Certificate.