If you’re a veteran who has served in the military, and now looking for small business loans and support to build up your business, then we have some good news for you! The US Small Business Administration or SBA, as well as private lenders, offer several small business loans and entrepreneurship training programs, especially for military veterans. The loans have generous discounts and the approval process is easier as compared to traditional loans. If this excites you, then here is some vital information that you need to know.
Best Small Business loans for veterans
The SBA loans for veterans are affordable and encourage American military veterans to start their small businesses. Although these loans are available for the general people too, you get privileges if you’re a veteran. For example, you may qualify for special terms and lower rates along with some additional support. Let’s take a look at some of the available loans.
SBA Express Loan
You can qualify for a loan of up to $350,000 through the SBA Express program. It has a quick turnaround time and you can withdraw the loan without any upfront fees although there is a fee of 2%-3% for the regular citizens. Along with affordable rates and zero upfront fees, you can also get counseling and training that will help your business to take off easily.
Standard SBA 7(a) Loan
Similar to the SBA Express loans, but this loan has a longer turnaround time. You can benefit from this loan if your capital requirements are higher. The maximum loan amount that you can get is $5 million. However, as a veteran, you do not get a fee waiver for this particular loan, unlike the SBA Express loan program. If your requirement is not so high, we suggest you go with the SBA Express loan.
Military Reservist Economic Injury Disaster Loan
There are SBA disaster loans like Military Reservist Economic Injury Disaster Loan program (MREIDL) meant for small business owners who cannot meet their financial obligations since a key employee was called for an active military duty. This loan helps to fill the gap in regular operations expenses. The loan is valid until the key employee returns to their job position. The loan amount is determined by the extent of economic injury, although the maximum limit is $2 million.
How do I secure a VA small business loan?
To be eligible to receive an SBA veteran loan, the majority share of the business should be owned by:
- National Guard members
- Service-disabled veterans
- Active duty military members in the Transition Assistance Program
- Spouse of any of the above
- Widowed spouse of a service member who passed away during service
If you are applying for a VA loan, you need to ensure that the business owner has not been discharged for any misconduct. You need to keep all your relevant documents handy to receive the veteran benefits like a fee waiver. Having an overall credit score of at least 640 and collateral are mandatory to avail these loans along with meeting the other requirements set for the SBA loans.
What are the other small business loan options for veterans?
Apart from the SBA loans, there are other alternatives too for military veterans. Let’s have a look at them.
StreetShares is a well-known lender that offers loans to small business owners owned by veterans. You can avail both secured and unsecured loans with a credit line of up to $250,000. They have a fast turnaround and a competitive rate too. Although it looks into your credit score to determine your eligibility for the loan, however, if you’re a veteran you can still apply with a slim credit file.
Another popular lender is Accion that lends different loans including veteran-owned business loans. Their loan ranges between $300 to $1,000,000 and has decent rates.
Hivers & Strivers is worth considering if you are looking for investors instead of loans to fund your business. This angel investment group is formed by veterans and they offer investments in early-stage start-ups founded by US Military Academy graduates. You can expect an amount anywhere from $250,000 to $1,000,000 in each funding round.
If you are looking for an entrepreneurship training program for veterans, then consider Boots to Business. As a participant, you can have access to business support resources through the US SBA.
Veteran Women Igniting the Spirit of Entrepreneurship, or V-WISE, in short, is a business and entrepreneurship training program for women veterans and women military spouses that offers valuable support services like financing opportunities, skill-building, mentorship, etc.
If you’re a veteran and looking to start your own small business, then there is a plethora of small business loan options for you. Go through them carefully to make an informed decision.