Business Loans for Veterans: A Guide

Key Points:

• Importantly, a business loan is not a personal loan. A personal loan can be used for any purpose. But a business loan can only be used to cover business-related expenses. 
• You have access to small business loans that are only available to veterans. 
• Start the process by clarifying your business idea. Then make sure you are eligible for business loans for veterans before applying.

What is a Business Loan for Veterans? Plus, How To Get One?

• Shorter application time: Typically, small business loans for veterans come with an expedited application timeframe. 
• Better rates: Many business loans for veterans come with better rates than a traditional business loan. 
• Longer repayment terms: Getting your business off the ground is no small feat. You will often find longer repayment terms which give you more time to turn a profit. 

Who is Eligible for a Veterans Business Loan?

A veteran business loan sounds like a great option for small business owners. So, who qualifies for a military business loan and military retiree benefits.

• Veteran status:  The main requirement is that the business owner is a veteran in good standing. Typically, this includes honorably discharged veterans, widowed spouses of those who died in service, or service-disabled veterans. 
• Military status:  Veteran business loans are also available to active-duty military members participating in the Transition Assistance Program. Additionally, reservists and members of the National Guard are also eligible. 
• Veteran-owned business: If the business has multiple owners, the veteran or military member must own at least 51% of the business. 

How to Apply for a Veterans Grant to Start a Small Business

When applying for a veteran grant to start a small business, there are a few extra steps to keep in mind. Here’s what you’ll need to do to apply:

• Collect the standard loan application documents: As with all business loans, you’ll need to gather documents, including your business plan, financial statements, tax information, business ownership, and necessary licenses or certificates. 
• Meet the small business loan requirements: The exact requirements will vary based on the loan. But typically, you’ll need to have a good credit score, a reasonable revenue level, and a record of how long the business has been open. 
• Veteran-status documentation: Lenders will need to see a document to prove their status. Veterans can submit a copy of Form DD 214 or NA Form 13038. Transitioning active-duty members or reservists can submit a copy of their DD Form 2, a U.S. Armed Forces Identification Card, Armed Forces of the United States Geneva Conventions Identification Card, DD Form 2648, or DD Form 2648-1. Finally, spouses of veterans can submit their marriage certificates and their spouse’s appropriate documentation. 

Where to Find Business Loans for Veterans

With the appropriate documentation in hand, it’s time to find the perfect loan for your veteran-owned business. The good news is there are plenty of places to look. But we’ll explore the top options below.

• SBA 7(a) Loans: The Small Business Administration offers this type of loan to small businesses of all kinds. But veterans can receive a break on fees when applying for the program. The SBA itself doesn’t offer these loans. Instead, it offers a guarantee to lenders. With that, you can apply for these loans through a partner financial institution. For example, Live Oak Banking Company and The Huntington National Bank are two of the most active SBA(7) lenders. 
• Military Reservist Economic Injury Disaster Loan Program (MREIDL):If one of your employees is called into active duty, the Military Reservist Loan Program provides loans of up to $2 million to cover the working capital required until the essential employee returns to their position. 
• Hivers and Strivers Angel Fund & Veteran Capital for Veterans: If you prefer an investment to a loan, then Hivers and Strivers is worth looking into. The fund invests in veteran-owned businesses with investments that range from $200,000 to $500,000. The business must be past the initial concept phase and positioned for large gains to be considered by Hivers and Strivers. 
• Bank business loans: Many banks and credit unions offer business loans with special perks for veterans. But most require that your business have a proven revenue stream to qualify for a loan. 
• Online lenders: You can find attractive business loans for veterans through online lenders. If you are considering an online lender for your business funding needs, then check out our list of the best options. 
• StreetShares Foundation: The StreetShares Foundation awards a grant annually. As a grant winner, you could receive $15,000, $6,000, or $4,000. 
• SBA’s Patriot Express Loan: You’ve likely heard of veteran business loans through the SBA. The Patriot Express Pilot Program provided business loans to veterans. But this opportunity ended in 2013. 
• Microloans: A microloan often offers a fast application and more lenient credit requirements. Although these loans are smaller, they could be just what you need to get your business off the ground. 

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