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VA Small Business Loans: Find Financing for Veteran-Owned Businesses

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Every business needs financial resources to operate, grow and invest in the future, including enterprises owned by military veterans who followed a path into entrepreneurship after their time on active duty. There are several programs that offer small business loans for veterans, as well as mentorship and training opportunities.

However, it’s important to note that if you’re seeking a VA small business loan, the Department of Veterans Affairs (VA) does not offer these. Still, there are some great alternatives, both public and private, that can help you get your business up and running or prepared for growth.

The truth about VA small business loans

While the U.S. Department of Veterans Affairs provides veterans with many benefits and resources, including VA home loans, health care, education and vocational training, it does not offer VA business loans.

The VA supports small businesses through the implementation of federal guidelines that protect business opportunities for veterans. For instance, federal agencies must set aside a portion of government contracts for veteran-owned firms, as well as service-disabled veteran-owned businesses.

Veterans Advantage loans

VA loans may also refer to the now-defunct Veterans Advantage loan program from the U.S. Small Business Administration (SBA). Neither the SBA nor its Office of Veterans Business Development loan money directly to veteran entrepreneurs. The SBA previously offered the SBA Veterans Advantage 7(a) loan, but it is no longer available.

However, the agency does waive guaranty fees for SBA Express loans, another type of 7(a) loan, for veteran business owners. We’ll discuss SBA loans more in the next section. Guaranty fee relief for veterans came out of a provision in the CARES Act designed to aid small business owners during the coronavirus pandemic.

Small business loans for veterans

A VA business loan might not be an option now, but there are other lenders who work directly with current and former service members as well as loan programs designed for veteran-owned businesses.

SBA loans for veterans

The SBA has several small business loan programs for all types of business owners that address specific business needs, such as general costs, real estate development and disaster recovery. The SBA gives special consideration to veteran-owned businesses within several of its loan programs.

  • 7(a) loans: This flagship program is several loans in one including the standard 7(a) up to $5 million. The Express, as the name implies, is designed to provide fast funding up to $350,000. As we mentioned earlier, veterans are exempt from guaranty fees on 7(a) Express loans. To qualify, a business must have 51% or greater ownership by a veteran or a veteran’s current or widowed spouse.
  • 504 loans: These loans are used to buy fixed assets such as land, machinery and buildings. Also known as CDC 504 loans, they involve a partnership between a lender and a Certified Development Company (CDC). The SBA guarantees the CDC portion of the loan up to $5 million.
  • Microloans: If you’re just starting your business, an SBA microloan might be easier to qualify for than the 7(a) or 504. These loans up to $50,000 may be used for working capital or the acquisition of supplies or capital.
  • Military Reservist Economic Injury Disaster Loan: While the MRIEDL isn’t specifically for veterans, the low-interest loan program is aimed at small businesses — veteran-owned or not — that cannot fulfill their usual and necessary operating expenses due to essential personnel being called to active duty in the military reserve. It’s one of several disaster loans available to businesses through the SBA, with funding generally available up to $2 million.

Navy Federal Credit Union

Navy Federal, where membership is restricted to those with military connections, offers a full suite of business loans and lines of credit. Veteran borrowers may feel most supported by a lender familiar with the challenges veteran entrepreneurs face. Credit unions also generally offer lower rates than other types of lenders.

Veterans Business Fund

The Veterans Business Fund is not yet operable, but will begin giving loans when it has completed fundraising. The nonprofit is designed to help veterans who don’t possess the capital required by other funders as a baseline for eligibility for business loans. VBF will provide non-interest-bearing loans with favorable repayment terms so that veteran-owned businesses can secure additional capital.

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State small business programs

In addition to federal business loans and national lenders, many states provide incentives for veteran-owned businesses. These are sometimes found in states with large military installations, but other states simply want to attract startup business owners. Here’s a sampling of state programs we found — check with your state’s commerce department to see if it has a similar program.

Maryland – Hire Our Veterans Tax Credit

This program isn’t exclusively for veterans, but small business owners who hire a qualified veteran are eligible for an income tax credit equal to 30% of that employee’s first $6,000 in wages. See details here.


Veterans are eligible for federal set-asides as we mentioned earlier, but your state may give preference to veteran-owned businesses when it comes to state contracts. See more information on doing business with the state of Nevada, but you can also check with your state’s department of veterans services.

Advantage Illinois

Illinois offers several loan programs for small business owners, including Advantage Illinois. Though not exclusively for veterans, veteran-owned businesses would be eligible for potentially greater loan amounts in Advantage Illinois’ Participation Loan Program.

Small business resources for veterans

There are a number of business resources for veterans offered through various organizations and government agencies. In addition to loan programs, the SBA provides mentorship, workshops and other training to veterans through its Office of Veterans Business Development. The SBA’s Office of Veterans Business Development acts as a liaison to connect veteran-owned businesses with SBA services.

Here are a few other places to find education and training for veteran entrepreneurs:

Alternatives to a VA small business loan

If a veteran-specific loan is not the best fit for your company, there are still many alternative, general business financing options available for veteran-owned businesses:

  • Small business grants: Many organizations provide small business grants specifically for veteran business owners. Unlike a loan, you don’t typically have to repay a grant. If an organization approves your application, they will grant you the money as a one-time monetary gift.
  • Online business loans: Online business loans can offer fast financing solutions for many business owners. With less stringent requirements than traditional banks, online lenders may approve business owners who otherwise wouldn’t qualify for business financing. However, the trade-off might be higher interest rates.
  • Business line of credit: A business line of credit works a lot like a credit card. A lender determines the amount that you can borrow from and you draw down that amount as needed. You then pay back the amount you borrow at regular intervals with interest. The biggest advantage is that you only have to pay interest on the amount you’ve used. Many businesses like to have a business line of credit in case of an emergency or one-time opportunity.
  • Equipment financing: Equipment financing allows you to finance assets and pay off the cost a little bit each month, plus interest. The equipment itself is the actual collateral — that means if you default on your payments, the lender will repossess the equipment and sell it to make up the difference. Still, it may be easier to obtain than other types of business loans that require significant time in business or annual revenue.
  • Invoice factoring: Invoice factoring involves a business selling its outstanding invoices to a factoring company for cash up front. The factoring company then collects on the invoices for a fee. This type of financing is ideal for businesses that need a short-term cash infusion to take advantage of a timely opportunity. You can also use the funds to overcome a temporary gap in cash flow.
  • Merchant cash advance: A merchant cash advance (MCA) is a sum that is paid back to the lender through automatic deductions from your credit card sales. An MCA is more accessible than a traditional bank loan or even some online loans, but it can be an expensive way to borrow.
  • Business credit cards: Some owners choose to use business credit cards to finance their company purchases. These can be in the business’s name or in the owner’s personal name. Many businesses enjoy rewards programs that help them earn points or cash back.
  • Crowdfunding: There are a number of platforms, such as GoFundMe, that can help businesses get off the ground using crowdfunding. This financing method involves members of the public donating small amounts of money to help the business meet its fundraising goals. In exchange, donors will often receive a perk, like a first-run product or a t-shirt with the company logo.
  • Equity investors: Venture capital financing and angel investments are just two types of equity investments that would provide cash to grow your business in exchange for a percentage of ownership of the company. You may be able to find firms that specialize in growing veteran-owned businesses specifically. For instance, Hivers and Strivers is an angel investment group focused on veteran business owners.

Number of veteran-owned businesses

Veteran-owned businesses represent 6.1% of all U.S. firms, or 351,237 businesses. The training and characteristics veterans gain in the military — leadership, initiative, perseverance and strategic thinking — are also valuable in business ownership. But one skill that some veterans struggle with is transitioning that training to civilian careers.

Challenges and opportunities veteran business owners face

A quarter of service members leaving the military want to start a business, according to JPMorgan Chase. However, veterans are self-employed at the same rate as non-veterans (5.6%), according to the U.S. Bureau of Labor Statistics. That might be due to a lack of access to the right networks, resources, financing or other support.

Self-employment is often a good fit for veterans who may have a hard time finding traditional jobs due to physical and mental challenges resulting from their service, a disconnect between their military skills and the skills that civilian employment requires or a general lack of job openings when their service time is complete. These challenges can make business loans for military veterans crucial for success.

VA business loans FAQs

Can I get an SBA VA business loan?

No, the SBA no longer offers Veterans Advantage business loans. However, you may qualify for an SBA Express loan without any guaranty fees. The SBA waives guaranty fees on Express loans for businesses with at least 51% ownership by a veteran or a veteran’s spouse.

Can I use a VA loan to start a business?

You may be able to find a small business loan for veterans looking to start a business. Be sure to check the lender’s minimum time in business requirements to see if it’s suitable as a startup business loan for veterans.

Does the VA offer business loans?

No, the VA does not offer business loans for veterans. However, the VA does provide a number of resources for small businesses, including set-aside government contracts for veteran owned businesses.


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