How to Find Small Business Loans for Veterans


holly johnson

By Holly Johnson

Last updated 4/22/2020


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Summary: Small business loans for veterans can help entrepreneurial veterans and active duty military bring their dreams to life. Learn about the best loan options for veterans in this piece.

Military veterans put their lives on the line to help protect Americans at home and abroad, so it only makes sense for them to have access to small business loans with special perks.

Some small business loans for veterans are easier to qualify for than traditional business loans, and they may also come with considerably lower fees.

If you’re a military veteran who wants to borrow money to pursue your business goals or build up a profitable side business, or if you’re someone in search of small business loans for veteran’s spouses, you’re in the right place.

In this piece, we’ll go over some of the top small business loans for veterans, including loans from the SBA.

Note: Currently, veteran business owners struggling with income loss related to COVID-19 can apply for small business loans through the Paycheck Protection Program.


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These loans are available to any business that meets the Small Business Administration’s (SBA) size requirements, and all or part of the loans may be forgiven.

You can read about this program via the U.S. Small Business Administration website

small business loans for veterans

SBA Small Business Loans for Veterans

The Small Business Administration (SBA) once had more funding options for veterans, including the SBA Veterans Advantage loan, the Patriot Express Loan, and the Veterans Business Fund.

However, these loans have been phased out over the last decade for various reasons. 

Fortunately, the SBA still offers some special funding options for veterans, and this may even include small business loans for veterans with bad credit.

According to a U.S. Bank study, a whopping 82% of businesses that failed cited cash flow problems as a factor in their failure.

While basically any SBA loan is available to military veterans, here are some of the programs that can work well for veterans and active duty military. 

Military Reservist Economic Injury Disaster Loan Program

This loan program, also called MREIDL, intends to provide funding to eligible small businesses who are having trouble covering operational expenses because an essential employee was required to enter active duty as a military reservist.

That makes this small business loan for veterans fairly specific and difficult to use, but the benefits can be enormous. 

Based on federal guidelines, the SBA determines whether credit from non-government sources are sufficient to help small businesses recover, or whether the MREIDL is appropriate.

Quick Tip for Start-Ups:

Personal loans are a great way to fund a new business if you can't qualify for a business loan or 0% credit cards.  For personal loans up to $35,000, visit our #1 recommended personal lender.

Credit requirements for this type of assistance is dictated by the SBA, as are collateral requirements for loans over $50,000. 

Other Details For the Military Reservist Economic Injury Disaster Loan Program

  • Interest rate will be no more than 4%
  • Loan term cannot be longer than 30 years
  • Maximum loan amount is $2 million

Apply for this loan on the SBA’s Disaster Loan Assistance website


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SBA 7(a) Loan Program

While you don’t have to be a military veteran to apply for small business loans through this SBA program, SBA 7(a) loans can be fruitful for veterans and other small business owners.

Loan amounts up to $5 million are available, and the SBA will guarantee up to 85% of loans up to $150,000 and 75% of loans in amounts greater than $150,000. 

While the SBA backs part of the loan, you can apply for and get funding from a number of lenders that partner with the SBA through this program.

Interest rates and loan terms are then set by the lender, but they cannot exceed the SBA maximum which varies depending on the loan amount. 

As an example, a loan of less than $50,000 with a repayment timeline of less than 7 years can’t come with a rate that exceeds the prime rate + 3.25%.

Meanwhile, a loan with a repayment timeline that’s longer than 7 years and a loan amount over $50,000 must come with a rate that doesn’t exceed the prime rate + 2.75%. 

How Much Do Startups Need?

According to the Wells Fargo Small Business Index, $10,000 is the average amount of startup capital required by a small business owner.  

Also note that the SBA offers a special version of this loan known as the SBA Express Loan. This is basically another SBA 7(a) loan, but you have the ability to get quicker funding. When you apply for this loan, the SBA will reply to your loan request within 36 hours. 

However:

  • You can only borrow up to $350,000 with a SBA Express Loan
  • The SBA only guarantees 50% of the loan
  • Collateral may be required for loans over $25,000

Once again, SBA Express loans are facilitated through a lending partner that works with the SBA to provide small business loans to veterans and other entrepreneurs.


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SBA 504 Loans

This unique loan program from the SBA is another option that can benefit veterans, although funding can only be used for certain components of a business. Specifically, you have to use the loan funds to buy real estate, or for construction or development of a property used for business purposes.

However, you can also use loan funds to purchase new machinery or equipment, or to update machinery or equipment you already have. 

With the SBA 504 loan, only 40% of the loan amount is supplied by the SBA. The rest is offered through a Certified Development Company (CDC), which is a nonprofit corporation that helps promote economic development within a community. 

How does this work? 

“CDCs are certified and regulated by the SBA, and work with SBA and participating lenders (typically banks) to provide financing to small businesses, which in turn, accomplishes the goal of community economic development,” writes the SBA on their website. 

These small business loans for veterans and others come with a $5 million SBA loan cap, and they also come with longer amortization periods of 10 to 20 years that make repayment easier to handle. 

Business Loan Funding Equals Opportunity

Interest rates on SBA 504 Loans are based on the current market rate for 5-year and 10-year U.S. Treasury issues, and fees may be financed with the loan.

Other Small Business Loans for Veterans and their Spouses

These are just some of the small business loans for veterans available, but there are plenty of other loan options.

To make sure you have a handle on all the small business loans that may be available to you, we suggest heading to the SBA website and perusing all your options. 

Qualifying for Business Loans:


Most business lenders require 1-2 years in business and $50,000 or more in annual revenue to qualify for a business loan.  Don't qualify yet?  See our top personal loan companies.

Also note that plenty of business loans are available to anyone who applies, and that includes a broad range of small business loans for veterans with bad credit, good credit, or excellent credit.

If you’re curious what your credit score is or how credit works, then read our Guide on Credit and Why It’s Important

Which lenders should you check out? 

For example:

  • Kabbage offers small business loans for small business of all sizes
  • A company called ondeck offers small business loans up to $500,000
  • BlueVine also offers small business loans and lines of credit with reasonable rates and fees

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SBA Loans Require A Separate Business Checking Account

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The Bottom Line

Being active duty military or a veteran can help you access special loan programs with low fees and fair terms.

However, you should take the time to compare all small business loan options available to you, including options that are available to the general public.

Also make sure to take time to improve your credit score if you haven’t already.

Your credit becomes more important than ever when you need funding, so you need to make sure this digital manifestation of your credit health is in good shape. 

At the end of the day, you need funding for your small business that helps you grow and thrive. Who cares if the loan is backed by the U.S. Department of Veterans Affairs or the SBA?

The most important factor for you, the borrower, is your ability to access the funding you need with low fees and terms you can live with.

Make sure to compare all your options so that any decision you make is an informed one.


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Get your no-obligation quote to see how much capital you could access.  Up to $250,000 in working capital in 24 hours.

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