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Business Loans for Veterans

By Elise Moores Managing Editor at Fast Capital 360 Reviewed By Mike Lucas

Did you know that veteran-owned businesses accounted for 5.9% of all U.S. businesses and generated $947.7 billion in receipts, according to the 2019 annual U.S. Business Survey? If you’ve served in the armed forces and are looking for funds to expand your business and contribute to the U.S. economy, see what business loans for veterans are available to you.

One of the leading advocates for this cause is the federal government, namely the Small Business Administration (SBA). 

The SBA helps thousands of borrowers each year, including veterans, and they’re not alone in their efforts to level the playing field. There are multiple types of business financing for veterans as well as grants and resources to help veteran-owned companies grow.

  • To apply for loans, grants and other government-related benefits specifically for veteran entrepreneurs, you must fall into 1 or more of the following categories:

    • Military veteran
    • Service-disabled veteran
    • Active-duty service member participating in the Transition Assistance Program (TAP)
    • Current spouse of a member of any of the above groups or spouse of Reservist or National Guard member
    • Widowed spouse of a service member who died during service or due to a service-connected injury or disability

Best Small Business Loans for Veterans

Small Business Administration veteran loans help business owners who are unable to qualify for traditional bank financing. While there are a few specific SBA small business loans for veterans, there are also other loans that are well-suited to the small business challenges you face.

MREIDLUp to $2 millionUp to 30 years4%For businesses with employees called into active duty
Standard 7(a) Loans Under SBA’s VA ProgramUp to $5 millionUp to 25 years for real estate, 5-10 years for equipment and working capitalMaximum variable interest rates vary by loan amount and maturity, ranging from Prime Rate  plus 2.25% to Prime Rate plus 4.75%For loans of $125,000 or less, the upfront guaranty is waived. For loans of $125,001 to $350,000, the upfront guaranty fee will be 50% less than the guaranty fee for non-veteran owned small businesses.
Express Loans Under SBA’s VA ProgramUp to $350,000Up to 25 years for real estate, 5-10 years for equipment and working capitalMaximum of Prime Rate plus 6.5% for loans of $50,000 or less, Prime Rate plus 4.5% for loans greater than $50,000Upfront guaranty fee waived
SBA Export Express LoansUp to $500,000Up to 25 years for real estate, 5-10 years for equipment or working capital, revolving line of credit plus terms up to 7 yearsSame as SBA ExpressFor beginners expanding your international trade business
SBA  MicroloansUp to $50,000Up to 6 yearsGenerally fall between 6% and 9%.For those in need of smaller amounts with less than excellent credit.

Military Reservist Economic Injury Disaster Loans (MREIDL)

Military Reservist Economic Injury Disaster Loans help businesses stay operational when an owner or essential employee is called to active duty from the Reserves or National Guard. Funding is used to cover the costs of running the business until the owner or employee returns.

To acquire an MREIDL business loan for veterans, you must show an inability to find affordable financing through other lenders. This means you’ll need to look into acquiring loans directly from banks before applying for the program.

To qualify, you’ll also have to explain how the business will suffer from the absence of the employee. If the employee is directly responsible for much or all of the business’s operation or sales, you may be eligible.

Funding cannot be used to refinance debt or expand your business. It is designed to help veteran small businesses stay afloat until the employee returns from active duty.

The MREIDL business loan for veterans offers rates as low as 4%, rivaling what you could get from a bank. Terms go up to 30 years depending on your qualifications and loan size, which is maxed out at $2 million. That maximum can be waived, though, if your business is deemed a major employer and you can prove the additional funding will keep jobs intact.


The MREIDL program requires collateral for all loans over $50,000. The SBA won’t decline you for lack of collateral but will take all available collateral you have. If you don’t have the assets to satisfy this requirement, you may qualify for an unsecured business loan.

SBA Standard 7(a) Veterans Advantage Loans

The SBA partners with lenders to provide VA 7(a) loans to veteran business owners.

SBA VA small business loan programs open up financing opportunities for small business owners having trouble obtaining funding from banks.

The SBA accomplishes this by guaranteeing a portion of the VA business loan, agreeing to repay the balance up to a certain percentage in case of default: 85% for loans of $150,000 or less and 75% for loans greater than $150,000. This guaranty reduces a lender’s risk and significantly boosts your odds of approval.

In the VA program, upfront guaranty fees are waived for loans less than $125,000. With fees that could be 3% in many cases (5% for most loans), this could save you thousands.

To apply for SBA Veterans Advantage loans and other government-related benefits, you’ll need to fall into one or more of the following categories:

  • Military veteran
  • Service-disabled veteran
  • Active-duty service member participating in the Transition Assistance Program (TAP)
  • Current spouse of a member of any of the above groups or spouse of Reservist or National Guard member
  • Widowed spouse of a service member who died during service or due to a service-connected injury or disability

Veteran agreeing to receive government loan with SBA VA lender

SBA Express Veterans Advantage Loans

In 2007, the SBA created the Patriot Express loan program to offer quick access to financing for veteran business owners. The program ended in 2013, but the Veterans Advantage SBA Express program has filled the void by providing loans for veterans, reservists and National Guard members as well as small business loans for disabled veterans.

Obtaining an SBA Express loan for a veteran-owned business is a quick, simple way to secure funding. Instead of waiting months to be approved for other 7(a) loans, you could be accepted within 36 hours and receive funding in as little as 30 days.

  • The maximum borrowing amount for Small Business Administration Express veteran loans is $350,000.
  • Guaranty fees are waived for SBA Express loans under the Veterans Advantage program.

In exchange for the quick turnaround time, the SBA only guarantees up to 50% of these loans. This makes it slightly more difficult to be approved, but the smaller lending amounts balance out some of the risk lenders consider.

Interest rates for Express loans under the SBA Veterans Advantage program are capped at the Prime Rate plus 6.5% for loans $50,000 or less and Prime plus 4.5% for loans over $50,000. As of January 2, 2020, the Prime Rate was 4.75%. These percentage rates are likely higher than what you can get with a regular bank loan, but considerably lower than what you’ll find with private, hard-money lenders that offer high-interest loans.

SBA Export Express Loans

SBA Export Express loans offer the same expedited process of Express loans but are tailored to companies beginning or enhancing their exporting business.

Traditional lenders see international trade as an added risk, so they’re less likely to supply funding for those businesses. Because of this, the SBA guarantees up to 90% of Export Express loans.

Due to the high costs of international exporting, the maximum borrowing amount for these loans is $500,000.

To qualify for these loans, you’ll have to show that you’ll use the money strictly for day-to-day operations, supplier orders or refinancing of debt directly associated with your new or ongoing international export business.

Interest rates are capped the same way as their regular Express counterpart. If you’re looking to introduce your veteran-owned business to international trade, these rates are very competitive given the risk associated with this type of business.

SBA Microloans

For those who don’t need to borrow hundreds of thousands, SBA microloans are a good option. The maximum amount for these loans is $50,000, but the average loan in 2019 was $14,735.

These loans are made by third-party lenders who are usually nonprofit, community-based organizations. Loans cannot be used to purchase commercial real estate or refinance existing debt.

Borrowers are usually required to offer a personal repayment guarantee as well as collateral.

Interest rates for this type of small business loan for veterans generally fall between 6%-9%, with additional loan packaging fees possible. According to the SBA, in 2019 the average interest rate for microloans was 7.5%.

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How to Apply for a Veteran Small Business Loan with the SBA

Although the SBA provides guarantees on a percentage of repayment, SBA lenders will still need to vet your application as if you were applying for any other loan. Let’s take a look at how to get a small business loan and what you’ll need to apply.

SBA Business Loans for Veterans Borrower Qualifications

To be considered for any SBA lending program, you’ll need to meet minimum criteria. Here’s a quick checklist of veteran business loan requirements:

  • Operate a for-profit business
  • Reside within the territorial U.S.
  • In operation for 2 years or more
  • Qualify as a small business using SBA size standards
  • No previous delinquencies on government-backed financing
  • Owner previously used other resources to finance business before seeking SBA assistance
  • If you can check off those boxes, you should be okay to begin assessing the rest of your qualifications.

Documents to Apply for an SBA Business Loan for Veterans

To receive SBA VA business loan benefits, you’ll be required to provide documentation to both the SBA and the lender proving your status. Whether you’re seeking business loans for disabled veterans or small business loans for women veterans, there are funding options out there to meet your needs. Depending on your veteran classification, you’ll need to gather the following:

  • Veteran: Copy of DD Form 214
  • Service-Disabled Veteran: Copy of DD Form 214 or documentation from the Department of Veterans Affairs
  • Transitioning Active-Duty Servicemember: DD Form 2, Armed Forces Identification Card, DD Form 2648 or DD Form 2648-1
  • Reservist or National Guard Member: DD Form 2, Armed Forces Identification Card
  • Spouse of Veteran: Evidence of spousal status and spouse’s DD Form 214
  • Spouse of Transitioning Active-Duty Servicemember, Current Reservist or National Guard Member: DD Form 1173, Armed Forces Family Member Identification Card and evidence of spousal status
  • Widowed Spouse of Active-Duty Servicemember or Veteran Who Died from a Service-Connected Disability: Documentation from the Department of Defense or from the Department of Veterans Affairs

Credit Score Needed for an SBA Business Loan for Veterans

Depending on the lender and program, there will be a minimum business and personal credit score to qualify. Generally, you’ll need at least a 640 credit score to qualify for SBA loans, including SBA VA express loans and the MREIDL program.

Due to the lower principal amounts, microloans don’t have requirements as high as other SBA options. You’ll need a credit score of around 620 for your application to be considered.

If you’re applying for a loan for your veteran-owned small business and have poor credit (under 620), you may need to look into small business loans for veterans with bad credit. Research bad credit business loans to see if you qualify.

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SBA Business Loan Application Process

When you’ve decided to apply, you’ll need to gather financial information that allows the SBA and your lender to assess your creditworthiness. These include:

  • Business and personal tax returns
  • Personal financial statements (required for each individual owning 20% or more of the company)
  • Profit-and-loss statements
  • Balance sheets
  • Business licenses, articles of incorporation, leases or franchising agreements may be required by your lender depending on your industry and the type of loan for which you’re applying.

Then, you can find an SBA lender to begin the process. The lender will compile your business information, including any documentation needed to participate in the SBA loan program.

After that, your application will be processed by both your lender and the SBA to determine your eligibility. Depending on your program, you will receive a funding decision in 36 hours to a few weeks.

If you’re denied and need funding fast, it can be worthwhile to research alternative small business lending options.

An SBA VA loan application for a veteran-owned construction business

Alternative Financing and Business Loans for Veterans

While not all applicants meet the criteria necessary to secure popular SBA and commercial business loans for veterans, there are other funding options that can get you the capital you need to grow your business.

Equipment Financing

Equipment financing can help your company purchase expensive machinery. You can receive up to 100% of the value of the equipment you wish to purchase.

Equipment financing is a great option for veteran-operated businesses in the restaurant, technology and construction industries.

Short-Term Business Loans

Short-term business loans are a good fit for veteran-owned small businesses because they don’t require you to commit to a long-term contract that can tie up future cash flow.

Through the funding partners at Fast Capital 360, you could acquire up to $500,000, which may be used for most general business purposes.

Repayment terms can go up to 18 months, meaning you’ll keep your finances flexible for the future.

Business Line of Credit

A small business line of credit is suitable business financing for veterans who have revolving needs for working capital.

The withdrawal process works similarly to a business credit card, but repayment is different. You withdraw funding from your credit limit as you need it, using it for everyday working capital or a special project.

Instead of having a minimum monthly payment, you’ll pay regular installments for a specified period of time until you’ve paid the balance down to $0. After that, you’ll be free to withdraw more funding up to your limit.

Merchant Cash Advances

If your veteran-owned business needs quick access to funding, merchant cash advances are a potential solution. While not a loan, with a merchant cash advance, you’re committing a slice of your future revenues. Payment is either withdrawn from a percentage of your credit card sales or from Automated Clearing House (ACH) payments, which electronically deduct funds from your bank account.

Since this funding product is lent against your sales, the qualifications for approval aren’t as strict as other options. This makes them a perfect alternative to a small business loan for veterans with bad credit.

Choosing a Business Loan for Veterans

Business loans for veterans and other service members can allow you to achieve personal and professional success.

Whether you’re just starting out or trying to expand your business, there are plenty of options out there. Some are specifically tailored for veterans, while others are suited for your challenges as a veteran-owned business.

Now that you understand how to get a veteran small business loan, once you decide which option is best for you, simply gather all of the required documentation and begin the application process. Once you receive your business loan for veterans, you’ll be free to create the future you envision for your small business.

At Fast Capital 360, we thank you for your service. If you need any help finding the best loan options for your company, one of our expert Business Advisors will help guide you every step of the way.

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