Exploring Options for Business Loans for Veterans

Written by Banks Editorial Team
4 min. read
Written by Banks Editorial Team
4 min. read

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According to the SBA, over 20 million veterans own businesses. Veterans use their companies to serve customers, create jobs, and generate income. Some veterans need business loans to maintain and grow their companies. Loans can fund necessary equipment, a commercial building, salaries, and other investments. Veterans can tap into traditional financing like everyone else, but they can also capitalize on loans and grants exclusively for veterans. We will share some financing options that can help your business.

Flexible and Fast Business Loans

Who Qualifies for Business Loans for Veterans?

Active and former members of the armed forces must fulfill at least one of the following parameters to qualify for a business loan for veterans.

  • Active military members in the Transition Assistance Program (TAP)
  • Reservists and National Guard members
  • Service-disabled veteran
  • Honorably discharged

A veteran’s spouse can also qualify for the loan under one of the following conditions:

  • The veteran is still alive and currently serving the country
  • The veteran died in service or from a disability incurred from service 

SBA Loans for Veterans

The Small Business Administration offers various loans for business owners. In addition, they have two programs exclusively designed to finance veteran business owners.

Veterans’ Advantage for SBA 7(a) and SBA Express

The SBA 7(a) and SBA Express loans provide financing for business owners. While anyone can benefit from these programs, the SBA has exclusive advantages for veterans, such as lower loan fees. Veterans can borrow up to $500,000 through an SBA Express loan as a term loan or line of credit. You can receive the funds within 36 hours, but the SBA doesn’t hand these loans to anyone. You’ll need two years of robust revenue numbers and a credit score above 650.

The SBA 7(a) program offers long-term financing and up to $5 million from a single loan. Banks, credit unions, and online lenders provide these loans to veterans with businesses. This loan also requires strong credit and revenue numbers.

SBA 8(a) Service-Disabled Veteran-Owned Small Business

While the SBA 8(a) program won’t give you funding, the program opens up exclusive financing opportunities. This program helps socially and economically disadvantaged individuals get access to government contracts. You won’t have any outside competition for these contracts and can borrow up to $4 million. This limit jumps to $6.5 million for manufacturing companies. You can seek other fund sources as you get certified.

Military Reservist Economic Injury Disaster Loan for Veterans

The military may call one of your employees for active duty. The Uninformed Services Employment and Reemployment Rights Act (USERRA) prevents business owners from discriminating against employees based on past, present, or future military service. The government has rules like these to protect veterans, but they also offer assistance to business owners. If an essential employee temporarily leaves your company to serve, you may qualify for a Military Reservist Economic Injury Disaster Loan. You can obtain up to $2 million from this loan.  

Traditional Business Loans Available for Veterans

Veterans can consider many loans and programs specifically for veterans. However, you shouldn’t ignore traditional financing opportunities. More choices can lead to more funding. 

Business Credit Cards

Credit cards help business owners finance new purchases and tap into a flexible credit line. Credit limits vary for each business owner, but some can exceed $50,000. Other financing options give you access to more money, but you can use your credit card anytime you desire.

Lines of Credit

Lines of credit function like credit cards. Once you get accepted for a line of credit, you can use it anytime. You won’t have to reapply for another line of credit after paying it back. Lenders only charge interest on lines of credit if you borrow against them. So you can get a line of credit, not touch it for a year, and pay no interest.

Flexible and Fast Business Loans

Invoice Factoring

Some business owners generate enough demand to keep up with costs. However, revenue doesn’t always arrive when you need it. You may have an invoice not due for several months. Invoice factoring helps you realize your invoices sooner. Invoice factoring companies will buy your invoice at less than face value. You would make more money holding onto the invoice and waiting for the deadline, but not every business owner has enough time to wait. You can receive most of the invoice’s face value immediately instead of waiting for the deadline. 

Merchant Cash Advances

A merchant cash advance can provide financing if your business generates strong sales from credit cardholders. Lenders give you money upfront in exchange for a percentage of future sales. These future sales go towards repaying the loan. Lenders continue collecting this percentage until you finish paying off the loan. Most lenders set 3–18-month terms.

Small Business Term Loans

Small business term loans provide significant flexibility. You can compare rates and find loan amounts that match your objectives. If you want one of these loans, Mulligan Funding can help. The company provides access to small business funding for veterans and other business owners. (*) You can get approved for the maximum loan amount if you qualify. Mulligan Funding lets you use funds for any objective. Learning about your choices is easy. All you have to do is head over to Mulligan Funding’s website and request a free quote

Other Business Grants for Veterans

Loans give your business the financial strength to make new investments and maintain operations. These financial products help, but you can also apply for business grants. While grants are harder to obtain than most loans, you won’t have to pay them back. Veterans can explore these grant opportunities.

StreetShares

The StreetShares Foundation runs an annual competition where veterans can pitch their businesses. The foundation selects from 8-15 finalists and invites the public to cast votes. The three entrepreneurs with the highest votes get to pitch to the judges. StreetShares provides the following grants based on how you place:

  • 1st place: $15,000
  • 2nd place: $6,000
  • 3rd place: $4,000

Hivers and Strivers

Hivers and Strivers is an angel fund that awards venture capital to veteran-owned businesses. Veterans run the venture capital firm and make investments ranging from $200,000 to $500,000. The firm will look at a company’s revenue numbers, projections, and other factors before giving money. You’ll need a proven model, but you won’t go into debt to obtain the funds.

Warrior Rising

The Warrior Rising Foundation provides veterans with financing and a support network of mentors and ‘Vetrepreneurs’. Warrior Rising also helps veterans with the SBA loan process and finding investors.

Office of Veterans Business Development Resources

This office allocates funds and education for veterans and their loved ones. You can learn about growing a business and how to improve your chances of getting a loan. Their page contains many benefits and programs you should explore. You will find opportunities like the Veteran Institute for Procurement Program. Graduates receive exclusive government contracting opportunities.

The Global Good Fund Veterans Leadership Program

This program teaches veterans personalized leadership development skills to strengthen their entrepreneurial careers. You can receive a $10,000 leadership grant. 

Service-Disabled Veteran-Owned Small Businesses Program

The government allocates at least 3% of its funds to this program. Veterans must certify their service disability through the Center for Verification and Evaluation. Veteran small business owners in this program can apply for government contracts with significantly limited competition.

Mulligan Funding

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