Veteran Small Business Loans

The U.S. Department of Veterans Affairs (VA) doesn’t offer business loans. But there are many other VA Small Business loan options, whether from the Small Business Administration (SBA), traditional banks, online lenders, or credit unions.

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Does the VA offer small business loans?

Written by Janet Berry-Johnson | Edited by Kurt Adams and Janet Schaaf | August 22, 2023

The VA doesn’t have a small business loan program. Likewise, many small business lenders do not offer business loans specifically for veterans.

However, if you’re a veteran-owned business looking for funding, there are many other entrepreneurship resources available to help. Several banks and credit unions offer discounted rates or reduced fees on business loans. There are also government contracting and assistance programs available for veteran small businesses.

If you need funding to start or grow a business, here are some resources that offer support for veterans.

Veteran small business loan options

There are several reputable sources for veterans seeking business loans, each with its unique pros and cons and eligibility requirements. Below, we provide an overview of these sources so you can find the right lending source for your specific needs and business goals.

SBA 7(a) loans

The SBA 7(a) loan program isn’t specific to veterans. Still, it can be a good resource for veteran entrepreneurs due to its high borrowing limits — the maximum loan amount is $5,000,000 — and flexibility in how the funds are used.

The SBA doesn’t lend money directly but guarantees a portion of the loan made by an SBA-approved lender, reducing the risk and making them more willing to lend to small businesses.

You can use an SBA 7(a) loan to:

  • Build or buy commercial real estate
  • Provide working capital for your business
  • Purchase equipment, machinery, furniture, fixtures, inventory or other supplies
  • Start a new business or buy an existing one
  • Refinance existing business debt

SBA Express loans

An SBA Express loan is another type of loan backed by the SBA. Like SBA 7(a) loans, they’re not specific to veterans, and you can only access them through SBA-approved lenders. However, their appeal is that they offer an accelerated turnaround time, with applicants receiving a response from the SBA within 36 hours of application submission.

The maximum loan amount is $500,000.

SBA microloan

The SBA microloan program provides loans of up to $50,000 to help small businesses and certain types of not-for-profit childcare centers cover start-up and expansion costs. Like other SBA loans, these microloans are backed by the SBA. However, nonprofit community lenders administer the program by managing loan applications and providing funding.

You can use an SBA microloan for:

  • Working capital
  • Buying inventory or supplies
  • Purchasing furniture, fixtures, machinery, or equipment

You can’t use microloans to pay off existing debts or purchase real estate.

Military reservist economic injury disaster loan (MREIDL)

The Military Reservist Economic Injury Disaster Loan is an SBA-backed loan program designed to provide financial support to small businesses that cannot meet their operating expenses because an essential employee was called to active duty as a military reservist.

MREIDL offers a maximum loan amount of $2 million, with interest rates set at 4% and repayment terms extending up to 30 years. However, the amount a business can borrow is limited to the actual economic injury calculated by the SBA. They’re not designed to compensate for lost income or profits and can’t be used to refinance debts or expand the business.

Bank and credit union business loans

Credit unions and traditional banks generally do not offer specific veteran business loans. However, some banks or credit unions may offer additional benefits or incentives to veteran-owned businesses, such as reduced interest rates or waived fees.

Here are a few to consider.

  • Navy Federal Credit Union. Navy Federal Credit Union caters specifically to people with ties to the armed forces, Department of Defense or National Guard. They offer a variety of resources to veteran business owners, including SBA loans, competitive loan rates, low fees and payroll processing.
  • Huntington Bank. Huntington Bank’s Lift Local Business program helps women-, minority- and veteran-owned businesses with SBA loans, business plans, and entrepreneurial education. They also promise no loan origination fees and will pay borrowers’ SBA fees.
  • PNC Bank. PNC Bank is an SBA-approved lender. They also offer military members reduced direct deposit requirements to qualify for waived monthly service charges on checking accounts.
  • Chase Bank. Chase Bank is an SBA-approved lender. They also waive the monthly service fee on business checking accounts and the first year’s annual fee on business lines of credit for military members.

Online business loans

Online business loans are offered by lenders that operate primarily or exclusively over the internet. Online lending platforms often provide a streamlined and efficient application process and make comparing offers from multiple lenders easy. These loans can include working capital loans or short-term business loans with repayment terms extending from several months up to several years.

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Who qualifies for a veteran small business loan?

Eligibility for veteran small business loans can vary depending on the specific loan program and the lender. However, some common business loan requirements include:

  • Veteran ownership. The majority ownership (at least 51%) of the business must be held by individuals who are veterans, active-duty military members or their spouses. In some cases, opportunities for government contracts or assistance are also available to widowed spouses of veterans or service members who died in service or from a service-connected disability.
  • A for-profit business operating in the United States or its territories. Non-profit organizations and foreign entities generally aren’t eligible for these types of loans.
  • Ability and intention to repay the loan. Lenders will typically evaluate your ability to repay the loan by reviewing your personal and business credit history, business plan and financial projections.

Other resources for veteran-owned businesses

Funding isn’t the only thing veteran businesses need to be successful. The following resources can offer veteran entrepreneurs valuable guidance, training and networking opportunities to help them navigate the business landscape more effectively.

  • Veteran Business Outreach Centers (VBOC): The VBOC program, administered by the SBA, offers a variety of resources tailored to support veteran entrepreneurs, including business training, referrals to resources, mentorship programs and assistance in developing business plans. Find your local Veterans Business Outreach Center.
  • VetCert: VetCert helps veteran-owned businesses compete for contracts with the Department of Veterans Affairs. Get started by registering for a MySBA account.
  • Boots to Business (B2B): The SBA’s Boots to Business program offers veteran entrepreneurship training programs. It’s open to active-duty service members, veterans, and their spouses. Find the upcoming course schedule and register for classes on the B2B page.
  • Service-disabled veteran-owned small business program: The Service-Disabled Veteran-Owned Small Business (SDVOSB) is a program of the federal government that aims to award at least 3% of all federal government contracting dollars to service-disabled veteran-owned small businesses each year. You can self-certify your business as an SDVOSB by updating the status of your business at
  • Women Veteran Entrepreneurship Training Program (WVET). WVET offers comprehensive training, mentorship and support services to guide women veterans operating small businesses in Texas. It also offers business loans ranging from $500 to $500,000.

Grants for veterans

The Second Service Foundation is a grant program designed specifically for veterans. By providing grants, it helps veterans start or expand their businesses.

In addition to the Second Service Foundation, several federal government agencies and private corporations offer small business grants for veterans. Federal grants tend to be competitive and are often linked to specific industries or objectives, such as technology development, environmental conservation or community development.

Similarly, private companies offer grant programs, often aligning with corporate social responsibility goals. These grants can provide the necessary financial boost for veteran-owned businesses, driving innovation and growth.

How to get a business loan as a veteran

Navigating the process to get a business loan can seem daunting at first. However, when you understand the necessary steps involved and what each one entails, it becomes significantly more manageable. Below are some crucial steps to guide you toward a successful loan application process.

  1. Review your options. Numerous loan options are available to veteran entrepreneurs, including SBA loans, traditional bank loans and alternative lending options. Each option has unique eligibility criteria, interest rates and terms. Reviewing these options and selecting the most suitable one is a critical part of the process.
  2. Gather the required documents. Next, gather the documents you must submit with your loan application. These may include personal and business financial statements, bank statements, a business plan and recent tax returns.
  3. Compare rates. Rates can vary widely from lender to lender—even for the same type of loan. So shop around with a few different lenders to compare rates, fees and other terms.
  4. Apply. Once you find a loan with the right rate and terms, the next step is to fill out the loan application and submit all required documents. Then wait to hear whether your application is approved.

Frequently asked questions

The Department of Veterans Affairs (VA) does not directly offer business loans. However, it does offer programs and partnerships, such as Boots to Business and the Women Veteran Entrepreneurship Training Program, that aid veterans in obtaining the financing they need.

The SBA Veterans Advantage business loan program, which reduced or eliminated fees on SBA 7(a) loans, was discontinued. However, SBA 7(a) loans are still available, and some SBA-approved lenders offer reduced or waived fees for veterans.

Business loan interest rates are set by the SBA-approved lenders issuing the loans. However, they are subject to SBA maximums.

Those maximum rates depend on the loan amount, loan term and either the prime rate, LIBOR rate or the optional SBA peg rate in effect when the loan is taken out. Currently, rates range from 3.0% to 6.5% plus the base rate on variable-rate loans and 5% to 8% on fixed-rate loans.

The SBA doesn’t set a minimum credit score — each lender can set their own minimum credit score requirements. However, having a credit score of 680 or higher gives you a better chance of getting approved for a loan.

Yes, getting a veteran business loan with bad credit is possible. Various lenders have different credit requirements — some are more lenient, and others are more strict. However, having a poor credit score can increase the difficulty of getting approved for a loan and may result in less favorable loan terms.

Obtaining startup business loans for veterans can be a challenge. However, the degree of difficulty varies based on several factors, including your personal and business credit score, cash flow and the strength of your business plan.

Fortunately, a variety of programs and initiatives are in place to support veteran entrepreneurs, including providing training, mentorship and help in creating a business plan.