Business loans for veterans are crucial to face the unique challenges when starting a business. As a veteran, you've served your country honorably, and the time to take care of yourself and your family has arrived by forming your own company.
We're here to help you every step of the way. To help you succeed, we're listing the top VA loans and alternatives. We also share valuable resources that will be invaluable in your journey.
The Best Business Loans for Veterans
The Military Reservist Economic Injury Disaster Loan Program (MREIDL)
The SBA sponsors this program that helps veterans and personnel whose businesses suffered economic damage
can provide active duty service members and veterans up to $2 million as a cover for operating costs that you cannot meet because of the loss of a vital employee that the US Army has called to active duty, specifically in the Reserves or National Guard.
The interest rates can be as low as 4%, with terms possibly expanding to 30 years.
The Military Reservist Economic Injury Disaster Loan Program (MREIDL) is a business loan program for veterans who have received the call to active duty.
This program provides low-interest loans to help businesses cover the costs of operating while the owner is away on active duty.
You can use MREIDL to cover various expenses, including inventory, payroll, and other business operating expenses.
Hivers and Strivers
This program helps veteran-managed startups to surge, but the person in question has to be a US Military Academy graduate.
You can use the loan funds for working capital, equipment purchases, and real estate purchases.
The program commits to helping veterans get the financing they need to succeed. That's why it also offers competitive rates and terms.
It is a veteran-administered platform
that serves as a financial marketplace for retired and active personnel, specifically those with small business ventures. It aims to connect investors with beneficiaries
Veteran entrepreneurs founded StreetShares, who understand the unique challenges faced by veteran-owned businesses.
Their goal is to help this group get the financing they need to start and grow their businesses.
StreetShares offers a variety of small business loans, including term loans, lines of credit, and invoice financing. They also have a number of programs specifically for veteran businesses, such as the Veterans Advantage Program.
Veterans Business Fund
It funds small business owners looking for capital for starting and existing businesses.
Small Business Loans for Veterans: What Are They? How Do They Work?
VA stands for Veteran Affairs. Business loans for veterans, or VA loans, refer to every type of financing that veterans or active military personnel receive to venture or reinforce ties in the business world.
They are often offered along with business development tools.
Opening a business or starting an alternative career in the corporate world can demand funds veterans may not have: for hiring new staff, paying locations, rent, services, and other related expenses.
Veterans, wives, widows, and active military personnel need viable and affordable funding alternatives.
Debt financing will help veterans to finance and grow their enterprises or business ventures.
Since they spent (or spent) much of their time serving the country, they often don't have the capital to invest in a project.
How can you use the funds from VA small business loans?
You can use the funds of a veteran business loan in many ways. Some of the most common uses for VA business loans
Starting or expanding a business
You can use the funds from a veteran business loan to help start or expand a business.
Including using the money to purchase equipment, pay for renovations, or cover other business expenses.
Paying off debt
With the funds from a veteran business loan, you can pay off debts that you may have as a business owner.
This can help free up some cash flow and make the business's growth easier.
Investing in growth
You can use it to invest in the growth of the business.
Such as the money to hire new employees, open new locations, or expand the product line.
Covering operating expenses
You can cover the ongoing operating expenses of a business. This can include things like payroll, marketing, and other day-to-day costs.
Making capital improvements
You can use the funds to make capital improvements. This can include renovating a store or office, buying new equipment, or expanding a business.
Purchasing or expanding a business
Finance the purchase of an existing business or fund the expansion of a current business.
This might include buying new equipment or inventory, hiring additional staff, or opening new locations.
Use it for other expenses that the business owner may have. This may include using the money to pay for marketing, advertising, or other business-related costs.
Tips for Comparing Business Loans for Veterans
If you are a veteran, you have several options available to you when it comes to business loans.
The Veterans Administration (VA) offers a variety of business loan programs that you can use for a wide range of purposes, from starting a new business to expanding an existing one.
Comparing different loans for veteran-owned businesses can be confusing and time-consuming.
But comparing loans is important before deciding which is right for your business.
Here are some tips to help you compare these loans:
Know the types of loans available
There are many different types of business loans
for the military, each with its own terms and conditions.
Knowing the difference between each type of loan is essential before comparing loans.
Consider the purpose of the loan
Before comparing loans, consider why you need them and what you plan to use them for.
This will help you narrow down your options and choose a loan best suited to your needs.
Compare interest rates and fees
Interest rates and fees can vary significantly from one lender to the next.
It's important to compare these costs carefully before you decide which loan is right for you.
Consider the repayment terms
Repayment terms can also vary. Make sure you understand each loan's repayment terms before making a decision.
Read the fine print
Before you sign any loan agreement, be sure to read the fine print carefully.
This will help you avoid any surprises down the road and ensure that you understand all the terms and conditions of the loan.
By following these tips, you can be sure you're getting the best business loan for your needs. Veterans have access to a variety of great loan programs. By taking the time to compare loans carefully, you can find the right one for your business.
How To Get A Small Business Loan For Veterans
For many veterans, starting their own business can be difficult and overwhelming.
Applying for small business financing
for veterans is no different than any other application; however, some key differences make the difference between success and failure in this area.
No matter which lender you'll apply for, here are some recommendations and steps you should follow:
Who is eligible to participate in Veteran Small Business Loans or Business programs?
All veteran business owners are eligible to receive some funding and other business tools, training, or programs.
Active military personnel can also receive help, as well as service-disabled veterans.
In most cases, veterans that have suffered dishonorable discharge from the army, navy, flight team, national guard, or other military-related activity are not eligible to receive funds for their business ventures.
The majority of loans, grants, funding, and training programs give benefits to veterans' wives, widows, and National Guard and Reservists as well.
VA Small Business Loans Requirements
- It must be majority-owned by veterans or service-disabled veterans.
- The business must also be for-profit and have a sound business purpose.
- The business must operate primarily within the United States
- Be in operation for at least two years.
- Have a good business or personal credit score and adequate collateral (in some cases).
To qualify for a veteran business loan or grant, you must:
- Be a U.S. citizen or permanent resident alien
- Be a veteran of the United States armed forces, including the National Guard and Reserves
- Be in good standing with the Veterans Administration (VA)
- Have a satisfactory credit history
- Demonstrate the ability to repay the loan
- Meet the eligibility requirements of the program for which you are applying
Steps to Apply for Veteran Business Loans
Get Veteran Status Documentation
Establish your veteran status. You will need documentation such as a DD-214 form or other discharge papers
You must provide proof of service if you are a reservist or National Guard member.
Prepare a Business Plan
Some lenders will ask you for a business plan, so the next step is to develop one. This should include your business goals, marketing strategy, and financial projections.
They will use this document to assess your eligibility for a loan and to determine the terms of the loan.
Get your Paperwork in Order
The first step in applying for a veteran small business loan is to gather the necessary documentation.
This includes financial statements and tax returns.
Once you have developed a business plan and have all your documentation in order, you must complete a loan application.
This will include information on your business, financial situation, and collateral.
You offer collateral as security for the loan, such as property or equipment, and some lenders will ask you this to secure the debt.
After the lender reviews your loan application, they will notify you of the decision and give you documents to sign if they approve your loan.
These documents outline the loan terms, such as the interest rate and repayment schedule.
Once you have signed the loan documents, the lender will disburse the loan.
They typically do it via wire transfer, although some online lenders may issue a check or directly to your bank account.
You will then have the funds available to use for your business purposes.
Other Alternatives For Veteran-Owned Businesses
If VA loan requirements are too stringent, more flexible options exist:
The Small Business Administration (SBA) backs several types of loans for veterans, including:
- 7(a) Loan Program: This is the SBA's most popular loan program. It offers loans of up to $5 million for businesses with various purposes, including working capital, inventory or equipment purchases, and business expansion.
- 504 Loan Program: The 504 Loan Program offers long-term, fixed-rate financing for major business equipment and real estate purchases. Loans can be up to $5 million for small businesses and up to $20 million for larger businesses.
- Microloan Program: The Microloan Program provides loans of up to $50,000 to small businesses and non-profit organizations. You can use the loans for working capital, inventory or equipment purchases, or business expansion.
- SBA Express Loan: The SBA Express Loan is a small business loan of up to $350,000. The VA guarantees this loan, but a participating lender makes it.
Many online lenders
are willing to work with small business veterans. These lenders offer a variety of loans, including lines of credit and term loans.
And because they're online, they're often able to provide funding more quickly than traditional lenders.
Invoice factoring is financing that allows small business owners to sell their invoices at a discount to receive immediate cash.
This can be a helpful way to improve cash flow and manage expenses, as well as provide working capital for growth.
Also, it can provide working capital for growth. With the extra cash, business owners can invest in new equipment, hire additional staff, or expand their operations.
Merchant Cash Advances
A merchant cash advance (MCA) can provide the funding you need to cover expenses, make inventory purchases, or take advantage of other opportunities as they arise.
An MCA is not a loan but an advance on your future sales. You repay the advance with a percentage of your future credit card sales, only paying back the funding as your business earns revenue.
This can be a helpful option for businesses with difficulty qualifying for traditional loans.
Business Line of Credit
This is a type of loan that allows businesses to borrow money as needed.
The lender sets the amount that can be borrowed, the interest rate, and other terms when you open the line of credit.
This type of financing can provide working capital that you can use for various purposes, such as inventory purchases, equipment upgrades, or unexpected expenses.
To qualify for a business line of credit, veterans must have a strong credit history and a solid business plan.
They will also need to provide collateral, such as business or personal assets.
Best Online Business Loans
Although we don't have specific veteran business loan programs, our microloans and small business loans are very competitive.
We specialize in business loans for minorities
because we understand veterans' unique challenges when starting or growing.
Other benefits include the speed and ease of start-up online loan process: you can receive your funds just days after submitting your loan application.
You can use the funds for start-up costs, inventory, equipment, marketing, and working capital.
Our business loan is available from $5,100 to $35,000 with competitive rates and terms, and there are no upfront fees or prepayment penalties.
To qualify, you will need:
Apply for a business loan today
- No SSN required: You can apply with your ITIN
- Time in business: 9 months active and registered
- You must have the business registered.
- Minimum gross annual sales: $30,000
- Loan payment: 24 to 60 months
National Funding offers veteran loans for small businesses up to $500,000.
There are no fees or requirements for these loans. You can use them for business purposes, such as business expenses, buying or leasing equipment, developing new products, etc.
Veterans can apply for these loans online or over the phone, and they will receive a decision within 24 hours.
National Funding also offers special financing options for veterans interested in starting their own businesses.
These options include 100% financing, low-interest rates, and no down payments.
- Time in business: 6 months
- Minimum credit score: 600
- Minimum gross annual sales: $250,000
- Loan payment: 4 months to 2 years.
The US government provides the funds for Funding Circle loans for veterans, meaning there are fees and requirements for eligibility.
The loan amount will depend on the veteran's business and financial situation, but it can range from $25,000 to $500,000.
You won't need collateral, and repayment terms are flexible, making it easy for veterans to get the financing they need.
To apply, veterans simply fill out a short online application and provide some basic information about their business.
Funding Circle will then review the application and decide within 24 hours. Then they will deposit the loan funds into the business's account within 3 days if they approve you.
- Time in business: 2 years
- Credit score: 660 minimum
- Minimum gross annual sales: $400,000
- Loan payment: 6 months to 5 years.
Fundbox offers an alternative to traditional loans. They provide lines of credit that you can use for working capital or business expenses.
However, they can offer a short-term repayment of 24 to 53 weeks, and still, this is one of the best business loans since you can get the funds as soon as the next business day.
You can apply for a loan amount from $1,000 to $150,000. To qualify for a Fundbox line of credit, you must have:
- A business checking account with a US bank
- Time in business: for at least 3 months
- Minimum gross annual revenue: at least $100,000
- Minimum credit score: 600
OnDeck offers terms loans of up to $250,000 and lines of credit of up to $100,000 with terms of up to 24 months.
To qualify, you must have been in business for at least one year and have annual revenue of at least $100.000.
This is one of the best business loans for veterans because its terms are flexible, and its rates are competitive.
This makes OnDeck an excellent option for veterans starting or growing their businesses.
They also have many other benefits, including flexibility, fast funding, and excellent customer service. Some requirements are:
- You will require a personal guarantee
- Time in business: 1 year
- Minimum credit score: 600
- Minimum gross annual sales: $100,000
- Loan payment: 6 months to 5 years.
Grants For Veteran Business Owners
Veterans can significantly benefit from business grants. They can be government-offered or private. Some of them are:
- VetFran Business Grant Fund: This grant works smoothly as a supplement for a business loan, as it represents a $10,000 fund injection for veterans awarded a franchise via the IFA VetFran scheme.
- USDA Veteran and Minority Farmer Grant: Managed by the Department of Agriculture, this specific grant focuses on providing veterans with all the needed tools (education, training, funding, and outreach) for their business ventures in the agricultural world.
- Little Caesars Veterans Program: The famous restaurant chain Little Caesars offers it. It consists of a $5,000 franchise fee discount and other offerings, including marketing expenses and supplies, which can ascend to $30,000.
More Help Available for Veterans
Besides the traditional lending of veteran-owned small businesses, several other financing sources and tools can help you start a business, qualify for a loan, or just gather the information and education you need as an entrepreneur.
Boots to Business
It is a program for veteran entrepreneurs
, offered on military bases and installations worldwide and in a training track of the Department of Defense's Transition Assistance Program. It trains veterans of all ages and eras in their respective societies and communities.
Women Veteran Entrepreneurship Training Program (WVEPT)
is an entrepreneurial program directed at female veterans.
It offers business training for service members, women spouses of active duty service members, and veterans when opening a business. Related grantees are:
Service Disabled Veteran Entrepreneurship Training Program (SDVETP)
offers business training for service-disabled veterans who want to own and manage small commerces. Related grantees are:
Veteran Federal Procurement Entrepreneurship Training Program (VFPETP)
specializes in training veterans and service-disabled personnel in entrepreneurship, especially those interested in federal procurement.
Veteran Institute for Procurement (VIP)
It is another veteran entrepreneurship program
that addresses federal procurement, offering three training programs: VIP Grow, VIP Start, and VIP International.
- The first assists companies in developing marketplace strategies
- The second helps companies ready to enter the federal market
- The last aids business that desires to expand their contracting or commercial opportunities in foreign locations.
Business development centers, organizations, and resources
- Veterans Business Services: It is a consulting service for veterans who own small businesses, ranging from start-ups to franchises. It provides tools to find business loan investors and serves as a connecting platform.
- VetBiz: Short for Veterans Business Resource Center, VetBiz mentors and develops veterans and active duty personnel in business consulting.
- Syracuse University's Institute for Veterans and Military Families: This organization holds conferences and provides training resources such as boot camps.
- EBV National Program: it stands for Entrepreneurship Bootcamp for Veterans with Disabilities (EBV) and offers some of the same resources as Syracuse University's Institute for Veterans and Military Families. It is an online learning program.
- National Veterans Business Development Council: The NVBDC serves as a counseling resource made by veterans for veterans. It is a third-party non-profit agency that provides certifications for businesses owned by retired US military personnel. It has the contacts to connect veterans to lucrative loan opportunities.
- SCORE Veterans Fast Launch Initiative: It is a non-profit foundation that intends to serve as an aid to a veteran-owned business. Specifically, the SCORE Veterans Fast Launch Initiative wants to help businesses get off the ground and begin operations as fast and smoothly as possible.
- Veterans Business Outreach Center: (VBOC) is a national program that provides counseling, training, and resources to veteran-owned businesses. VBOCs offer veteran small business owners various services, from one-on-one counseling to workshops and seminars.
- Camino Financial online resources: besides small business loans, we offer a variety of resources and tools in our educational blog.
In conclusion, the US Government and the private sector have worked tirelessly to ensure that veterans, active-duty personnel, and female entrepreneurs have all the tools to start, grow, and finance their businesses.
With a line of credit
available via different business loans, programs, alternative sources of capital, grants, and development centers and organizations, veterans can access working capital as their start and develop their dream of having their own company.
Financial institutions and alternative organizations offer business loans for veterans, service-disabled retired personnel, active-duty soldiers, and higher-ranked officials. Their wives and widows can also reap the benefits of these initiatives.
One of the biggest challenges small business owners face is access to capital. That's where Camino Financial comes in.
We are a fintech lender that provides small business loans to underserved entrepreneurs.
We believe everyone should have access to the financial resources they need to grow their businesses.
We've helped hundreds of small business owners get the funding to start or expand their businesses. If you want to be the next, you can apply today.
Apply for a business loan today
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How to apply for a veterans small business loan?
You can visit the Small Business Administration website to learn more about the process or speak with a local bank or credit union representative.
In addition, numerous private lenders offer loans specifically to veterans.
Does the VA give out business loans?
The Veterans Administration (VA) does not give out small business loans. The SBA is the entity that offers a variety of VA loans that also are available through participating lenders.
What credit score do you need for a VA business loan?
The credit score needed for VA small business loans varies depending on the lender. However, lenders will usually ask you to have at least a 580 score.
How big of a business loan can a veteran get?
Veterans can get business loans of up to $500,000.
How much does the VA give for a business loan?
Lenders offer a maximum loan amount offered is up to $ 5 million. However, a veteran's actual amount depends on several factors, including their business plan and credit worthiness.
Can an LLC use a VA loan?
Yes, an LLC can use a VA loan if it meets the eligibility requirements for businesses the Department of Veterans Affairs set forth.
The business must be majority owned by veterans or service-disabled veterans, and the veteran must have a controlling interest in the management and daily operations of the business.
How can a veteran start a business?
One option is to take advantage of the Small Business Administration's (SBA) programs and resources designed specifically for veterans.
Additionally, several private organizations support veteran-owned businesses, such as the Veterans Corporation and Theisen Vets.
Can veterans get business loans?
Yes, veterans can get business loans. The government has many programs to help veterans start or grow their businesses.
Some popular programs include the Veterans Affairs Business Loan Guaranty Program and the Small Business Administration's Veterans Entrepreneurship Program.