SBA Loans for Veterans

SBA loans for Veterans

The Small Business Administration provides SBA loans for veterans who wish to fund their small businesses. People who served in the military and their spouses can obtain various loan options that aim to support veterans. Take a look at the following SBA loans and see which one fits you best.

Types of SBA Loans for Veterans

There are three types of SBA loans for veterans. These loans are loan guarantees that are available for veterans, soldiers, or their wives and widows. Those who are going off to serve in the military or have returned can also avail one of these loans.

Note that these loans don’t originate from the VA or Veterans Administration. The SBA has an Office of Veterans Affairs. This office oversees business loans to veterans. These funds aren’t given out as grants. They are all standard loans that require repayment, with a corresponding interest rate attached. Check the following list of VA business loans:

SBA Express Loan Initiative for veterans

This program also welcomes non-veterans. Veterans can borrow up to a maximum of $350,000. SBA express loan for veterans also waives all upfront loan guaranty fees for those who qualify for this loan.

SBA 7(a) Loan Program

Just like the first type of loan on this list, non-veterans are also welcome to utilize the SBA 7(a) loan program. The best thing that’s in store for veterans here is that there are upfront guaranty fees of zero for loans amounting to $125,000 or less. Veterans can also enjoy up to 50% reduction of guarantee fees for those who borrow amounts exceeding $125,000. The SBA also welcomes those who need support in their business ventures. Various training and counseling sessions are available by SBA.

Military Reservist Economic Injury Disaster Loan (MREIDL)

This type of loan aims to provide working capital to businesses that could have met and continued to meet their obligations if their principal owner has not been called up for military service. The interest rate on the MREIDL is up to 4%. Its maximum loan term is up to 30 years. Note that the term depends on the amount of loan and individual circumstances. The maximum loan amount of this type of SBA loan is up to $2 million.

Who is eligible for SBA Loans for Veterans?

All active military personnel, service-disabled veterans, and veterans are eligible for these loans. Their current spouses or widows are also eligible for SBA loans for veterans. Please note that those veterans who received a dishonorable discharge aren’t eligible.

If you’re active duty personnel within 12 months of separation or a retiree within 24 months of retirement, you are qualified for the SBA Express Loan Program. National Guards and Reservists are also eligible for this program.

What are the types of businesses that can avail SBA loans for veterans?

The business is qualified for an SBA loan for veterans if it’s at least 51% owned by a qualified veteran. Most businesses can meet the eligibility requirements so long as the company is not a gambling business, a pyramid scheme, or a lending business. Also, non-profit entities are not eligible.

What can the proceeds of SBA loans for veterans cover?

The proceeds of an SBA Express or 7(a) loan can be used for most business purposes. You can use the funds for the following purposes:

  • add working capital into your business
  • purchase equipment
  • cover start-up costs for a new business
  • buy inventory to sell
  • hire business management
  • buy real estate for your business to occupy
  • expand your business
  • set up to sell goods/services to the government (contracting)
  • set up your business for the possibility of your deployment
  • recover from declared disasters like hurricanes, tornadoes, and earthquakes

See which of the types of SBA for veterans suits your situation best. If you’re qualified for any of them, you can look up our article on the general SBA loan requirements. The process could take a while, but with an advance preparation of the documents and other necessities, you can save time and effort upon availing loans for your small business ventures.