SBA Loans and Resources for Veterans

Updated: July 21, 2022
In this Article

    The Small Business Administration offers veteran entrepreneurs training and counseling, as well as assistance in finding funding, including small business loans. If you need a military small business loan with competitive terms and lower down payments, the SBA may be a good option.

    This government agency offers many opportunities, including training, education, and funding assistance.

    See What You Qualify For

    Select a VA Home Loan Option to Continue:

    Home Purchase
    Home Refinance
    Cash-Out Refinance
    Explore My Options
    Get Started

    Small Business Administration Help For Veteran-Owned Businesses

    The SBA runs the Office of Veterans Business Development (OBVD )and dedicates a section of its website to veteran-owned businesses.

    According to the SBA website, the OBVD ”facilitates the use of all SBA programs by veterans, service-disabled veterans, reservists, active-duty service members, transitioning service members and their dependents or survivors.”

    SBA programs can help veteran business owners find more operating capital, training and business opportunities.

    In some cases, the SBA may be able to help veteran-owned businesses who want to enter the federal procurement system.

    SBA Training for Veterans

    One important SBA initiative designed to help veterans is known as the Veterans Business Outreach Center Program, which mentors and trains veterans and helps their businesses plan to succeed. SBA training programs include:

    • Boots to Business – Offered on military bases (even those overseas). This is a training track of the Department of Defense Transition Assistance Program.
    • Women Veteran Entrepreneurship Training Program – Offers business training to women who are veterans, service members and spouses of service members.
    • Service Disabled Veteran Entrepreneurship Training Program – Business training offered to service-disabled veteran entrepreneurs who have a small business or would like to start one.
    • Veteran Federal Procurement Entrepreneurship Training Program – Training for veteran-owned and service-disabled veteran-owned businesses pursuing federal procurement.

    SBA Business Counseling for Veteran Business Owners

    The agency’s website has a locator tool to help you search for a Small Business Development Center near you. This local resource can be an important resource, especially for those needing individual counseling or problem-solving assistance.

    The SBA will also help to match you with a business mentor through SCORE, a national network of volunteer business experts. You can also access training, workshops and online resources.

    SBA-Backed Loans: Helping Not Lending

    The SBA does not lend money. Rather, it helps connect borrowers and lenders, then backs the loans.

    This is similar to the Federal Housing Administration’s role in its Single-Family Home Loan program, except the SBA guarantees business loans.

    According to the SBA website, the agency “helps small businesses get funding by setting guidelines for loans and reducing lender risk. These SBA-backed loans make it easier for small businesses to get the funding they need.”

    If you need funding to start a business or expand an existing business, the SBA may be able to help.

    SBA Patriot Express Loan

    The Patriot Express Loan Program was a popular pilot program created to lend up to $500,000 to businesses that were at least 51% owned by veterans and other members of the military community.

    Between 2007 and the end of 2012, the SBA facilitated approximately $703 million in loans, according to a Government Accountability Office report. The report found that default rates on these loans were higher than for other SBA loans, especially for loans under $25,000. This likely led to the program’s termination on Jan. 1, 2014.

    Current SBA Loan Programs

    You may be able to apply for a loan for as little as $500 up to $5.5 million, depending on your business needs and financial qualifications. These SBA-backed loans can be used for fixed assets, such as real estate or equipment, or for working capital.

    • 7(a) loans – The Patriot Express Loan Program was an example of a 7(a) loan. According to the SBA, this type of loan can be used to refinance current business debt, for working capital or to purchase real estate or other fixed assets. The maximum you can borrow with a 7(a) loan is $5 million.
    • Certified Development Companies/504 loans – According to the SBA, “CDCs are SBA-regulated non-profit organizations focused on promoting community economic development.” You can use funds from these loans for purchases, construction or improvements of major fixed assets, such as buildings. The maximum is $5 million for most loans and $5.5 million for certain energy projects
    • Microloans – As the name implies, microloans are small loans for up to $50,000. According to the SBA, the average amount borrowed with these loans is $13,000. Funds can be used to help you expand your business. You can not use it to pay debts or purchase real estate.
    • Loans for exporters – According to the SBA, most lenders consider export operations to be risky business, which “can make it harder for you to get loans for things like day-to-day operations, advance orders with suppliers, and debt refinancing.” SBA’s loan programs make it easier to get these loans. Contact the SBA International Trade Finance Specialist or the SBA’s Office of International Trade to get started in this area.

    SBA Veterans Advantage Loans

    According to the SBA, veteran-owned businesses are “one of the fastest-growing and significant segments of the U.S. economy.”

    Accordingly, the agency offers a reduced-fee loan program specifically for veterans.

    To be eligible, members of the military community must own at least 51% of a small business.

    Here’s who qualifies:

    • Honorably discharged veterans
    • Active-duty troops eligible for the military’s Transition Assistance Program
    • Service-disabled veterans
    • Reservists
    • Active National Guard members
    • Current spouse of any veteran, active duty service member, reservist or National Guard member
    • The widowed spouse of a service member who died while in service
    • The widowed spouse of a service member who died as a result of a service-connected disability.

    The borrower and the small business must also meet eligibility and financial requirements.

    Who Needs a Veterans Advantage Business Loan?

    A 2021 report by the Congressional Research Service analyzed issues facing veteran entrepreneurs. According to the report, accessing capital was one of the top challenges they face. In addition, “veteran small business owners reported approximately 10% lower loan approval rates than non-veteran small business owners and more financing shortfalls.” The report cited lower credit scores, insufficient credit histories and lower requested loan amounts as contributing factors.

    According to the report, the SBA “encourage(s) lenders to provide loans to specific groups of borrowers identified by the SBA as having difficulty accessing capital,” including veterans.


    Different SBA loan programs and lenders may have different eligibility requirements, but some general ones are common to all. One requirement is that businesses must be able to repay funds, but according to the SBA website, “Even those with bad credit may qualify for startup funding.”

    Here are the other general eligibility requirements:

    • Small business – The SBA was updating its definition of small business in 2022. In general, the question of size depends on annual receipts and/or the number of employees. You can find the table of size standards on the Code of Federal Regulations website.
    • Sound business purpose
    • For-profit business
    • Located and operating in the U.S.
    • Invested equity
    • Exhaust financing options – You must use personal assets and other alternative funding methods before applying for an SBA loan.

    How to Apply for a Veterans Advantage or Other SBA Small Business Loan

    If you need a business loan as a veteran owner/operator, the SBA can help with a program called Lender Match.

    This is an online tool used to gather your basic information, including the nature of your business, annual income, veteran status, and whether or not you have written business plans or a projected income or earnings schedule.

    You must also indicate that your business is at least 51% veteran-owned and submit the amount you wish to borrow. It’s one of the factors used to determine the best lender for your needs.

    Once you submit the form, the SBA will match you with a group of lenders based on your ZIP code and other factors. Expect to wait up to two business days to be contacted for more information.

    You will be able to contact the potential lenders to discuss your loan, the interest rate and other terms. You may also speak to the lender about the different types of business loans, including loans for operating capital, loans to purchase a business or equip one you already own and other options.

    If you are a new business owner, or still in the planning stages, you may find you have different options than applicants who have prior experience running a company, or applicants who are running a company now.

    Required Business Documentation

    Anticipate that any lenders you are matched with will request certain documentation. This may include at least two years of business tax returns, profit-and-loss statements, business plans, projected income and other documentation.

    You may also need to provide your DD Form 214 or other proof of an honorable discharge from the military.

    Business loans are predicated on the idea that the borrower is a good credit risk, and that the business will survive long enough to justify the loan for both lender and borrower. The more advance planning (on paper) you can do to show a lender how you will profit and grow as a business will be key to convincing the loan officer you should get your small-business loan.

    SBA Resources for Veterans and Small Business Owners in Spanish

    Spanish-speaking veterans are not left out of the picture. The entire SBA website is available in Spanish as well as English. You can find several resources in Español, including:

    • Guía de negocios
    • Programas de financiamiento
    • Contratación federal
    • Centro de capacitación
    • Asistencia local
    • Acerca de la SBA

    The website also has a Google Translate button built into the website to translate the site into a variety of languages including Kurdish, Ukrainian, Gaelic, Hindi and many others.


    If You Need Local Assistance With a Small Business Loan or Small Business Training

    The SBA’s locator tool will help you find regional SBA offices and district-level SBA offices. In some cases, your nearest SBA location may be in a nearby major city, but you can get many forms of assistance online.

    Some SBA offices serve multiple states. In such cases, demand may slow down processing times or create delays in getting personal assistance. It is wise to start early when contacting the SBA and expect delays.

    Don’t try to beat other deadlines while waiting for assistance at the SBA level, unless you know your processing times from start to finish will work in your favor. In lending, there are often delays, setbacks, and complications. Anticipate these before you begin for best results.

    Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News.

    About The AuthorJoe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News

    Written by Team