Best Business Loans for Veterans
The contribution of veterans on the battlefield is on par with their contribution to the growth of small businesses in the US.
However, veterans often face the first difficult step in transitioning from active duty to civilian life.
Skilled veterans frequently find a lack of finances dismal in their homeland. To remedy this, the federal and state government, along with private organizations, offers business loans for veterans.
Reports by the Small Business Administration (SBA) show that US Armed Forces veterans own more than 2.52 million small businesses in the country.
This makes up over 91% of all US businesses.
Overall, veteran-operated businesses bring in around US$ 1.22 trillion in annual revenue. The veteran-owned businesses also provide employment to more than 5.8 million people too.
Hence, if you too are a part of this industry, then you can also apply for business loans for veterans easily.
Who can apply for Business Loans for Veterans?
This is how you can take the first step to secure a business loan for veterans in the US.
In general, every lender has significantly different eligibility criteria to provide business loans to veterans. You need to do your part and find the specific criteria for loans from different lenders.
However, some of the more common eligibility criteria to secure a business loan for veterans include:
- Being an honorably discharged veteran
- Being a disabled veteran due to a service-related injury
- Being an active duty member of the military has participated in the Transition Assistance Program
- Being a member or reservist of the National Guard
- Being a spouse of any of the above
- Being a widowed spouse of a service member who passed away in the line of duty, or died from service-related injuries
If your business meets the above-given criteria then you may be eligible to receive business loans for veterans.
How to apply for Business Loans for Veterans?
As with any other loan, you will need to gather several documents and submit them with your loan application. The documents required for this usually include:
- Business plans
- Tax information
- Financial statements
- General business ownership details
- Relevant business certificates and licenses
Apart from these documents, you will also need to attach:
- Copy of Form DD 214 (for veterans)
- Copy of Form DD 214 or any document that proves their injury is service-related (for service-disabled veterans)
- DD Form 2 (for transitioning active-duty members)
- DD Form 2 (for reservists and National Guard members)
- Form DD 214 and proof they are currently married to a veteran (for spouses of veterans)
- DD Form 1173, Department of Defense Guard Reserve Family Member Identification Card and proof they are currently married to a veteran (for current spouses and transitioning active members of National Guards and reservists)
- Documentation from the Department of Defense/Department of Veteran Affairs providing they are widows of a veteran who has died while in the line of duty (for widows of veterans)
In case of Form DD 214 is unavailable, you can use NA Form 13038 as a substitute.
Where to get the best Business Loans for Veterans in 2022?
Several financing programs offer business loans to veterans. Let’s check out some of the more popular sources to seek business loans for veterans in 2022:
1 – SBA Loans
The Small Business Administration (SBA) is the first option to consider if you want a loan for a veteran-owned business. The SBA offers business loans to veterans at extremely convenient terms and attractive rates.
In reality, the SBA is not the lender but instead offers guarantees for loans made by member lenders.
These members include bands and non-profit CDFIs (Community Development Financial Institutions). An exception to this is the SBA Disaster Loans.
Some of the popular business loans offered by the SBA to veterans include:
SBA Express Loans
SBA 7(a) Loans
504 CDC Loans
The funds from these loans can be used to cover business expenses, as working capital, or to purchase real estate for the business.
To find out about additional loans for veterans from the SBA, you can choose to visit its official website at https://www.nav.com/
2 – Military Reservist Economic Injury Disaster Loan Program (MREIDL)
The Military Reservist Economic Injury Disaster Loan Program, or MREIDL, is also offered through the SBA’s disaster loan initiative. A veteran-owned business can qualify for this loan if an essential employee is called to active duty.
A qualifying business may be eligible for a loan of up to US$ 2 million. The amount of loan approved depends on the level of economic injury. These loans are offered at a lower rate and can be repaid in up to 30 years.
Eligible applicants can use funds from this loan to cover working capital, pay off necessary obligations, and until business operations return to normal.
To learn further details about the MREIDL loan, you can choose to visit the official SBA website at https://www.sba.gov/funding-programs/.
3 – Hivers and Strivers Angel Fund / Venture Capital for Veterans
Hivers and Strivers Angel Fund is a great source to seek investment capital, rather than business loans. The organization is committed to investing capital into veteran-owned businesses.
Henceforth, the Venture Capital for Veterans organization will provide investment into veteran-operated businesses.
Eligibility criteria require the applicant to be ahead of the concept stage, show prospects of significant growth and run by a veteran.
Through this program, eligible applicants can receive investment capital ranging from US$ 200,000 to US$ 500,000.
4 – Microloans
Microloans are more convenient if your business requires less than US$ 50,000 in funding.
The Community Development Financial Institutions (CDFIs) and other non-profit organizations offer many types of microloans for veteran-run businesses.
You can even apply for a microloan at the SBA, and receive up to US$ 14,000 in the loan amount.
Most lenders try to accommodate conventionally disadvantaged entrepreneurs, such as veterans of the US Armed Forces. You might have to do a little research to find the best-suited lender for a microloan for business.
To find out additional details on where to seek microloans for business development, you can visit the official website at https://www.nav.com/.
There are numerous sources from which you can seek business loans for veterans. Several government agencies, non-profit organizations, and corporations offer small loans for businesses owned and operated by veterans of the US Armed Forces.
If you want to find out even more about such sources, you can contact your nearest VA office and learn everything you need to know.