Business Credit and Loan Resources for Veterans

Veterans play a vital role in our economy, with veteran-owned businesses making up 9.1% of companies today. Their efforts employ almost six million Americans and a trillion dollars in annual sales receipts. While they tend to choose self-employment more often than their civilian peers, they still find challenges when it comes to securing funding to start or grow their businesses.

Thankfully, there are a number of resources available for current or former military entrepreneurs. Here are the options to consider when looking for funding. 

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Qualifications for Veteran Business Loans/Grants

Like most business funding, programs designed for veterans have requirements, and these requirements differ by program. Generally, you must be one of the following:

  • Honorably discharged
  • Service-disabled
  • Active duty and participating in a Transition Assistance Program (TAP)
  • National Guard
  • Reservist
  • Spouse of one of the above
  • Widowed spouse of a service member lost in duty or who passed from a service-connected disability

These requirements are for the broader veteran’s programs, but there are additional opportunities for veterans from minority groups, including women, people of color, and those with certain disabilities. Requirements for these programs will depend on the individual opportunity.

Depending on the loan type, you may need to meet some financial qualifications, including:

  • Have a healthy credit score  
  • Demonstrate a solid business history 
  • (For new businesses) share a detailed business plan
  • Potentially offer up collateral

Each loan solution will have a different set of rules, however. The SBA, for example, looks at credit scores as just one factor, with the ability to repay influencing the lenders’ decisions as much or even more than just the FICO. 

Different Types of Loans Available For Veterans

There’s no one-size-fits-all advice you can give a veteran-owned business, and that includes the type of funding that the business should receive. That’s why it’s a great time to be a business owner, with a wide selection of options for loans of any size and for a variety of business purposes. These funding solutions can work for many businesses.

VA Loans

Currently, there are no small business loans for veterans offered by the Veteran’s Affairs (VA) department directly. While they do work to connect veterans and their families to home mortgage lenders, they don’t work in the business of commercial lending.

That doesn’t mean the VA can’t help you fulfill your dream of business ownership, however. Your local VA office can be a useful tool to get connected to business mentors, adjust to civilian life, get training, and access technical help needed to keep your company running strong in this new season of living. 

They may even know about some local lenders that are happy to do business with veterans. While not technically a VA loan, just forming these connections can be the difference-maker in today’s competitive business climate. 

(Since many business owners may be looking for affordable housing, working with the VA to buy a home can help with lower rates, reduced fees, and no down-payment. That’s money that can be put back into your business!) 

SBA Loans

Loans administered through the Small Business Administration (SBA) are typically open to all eligible business owners, but additional benefits may be extended to veterans and their families to help make repayment more affordable. There is currently no SBA loan specifically for veterans. 

The most common SBA loan programs offer money ranging from $500 to $5.5 million and can be used for working capital or to purchase fixed assets. Some loans restrict how the money is used, so check with the lender for details.

SBA loan options include:

  • SBA 7(a) loan – The most common SBA loan, amounts range up to over $5 million and can be used to fund business expenses, buy real property, or (in some cases) refinance debt. Veterans may qualify for the Veterans Advantage program, which reduces or waives loan fees made through the SBA 7(a) loan program. The business must be 51% owned and controlled by a veteran, reservice, or active national Guard member, their spouse, or their qualifying widow. 
  • SBA 504 loan – With long-term, fixed-rate financing, these loans offer up to $5 million to buy major fixed assets that will create jobs and grow the economy. 
  • SBA microloan – These smaller loans of up to $55,000 cannot be used for debt or real property but may be easier to get than other loans. 

To qualify for an SBA loan, you must have a for-profit business registered and operating in the U.S., and you must have your own money invested in the business. You must also show that you’re unable to get funds from any other financial institution. 

Online Loans

There is a wide variety of companies offering quick-application loans you can access online. These applications tend to be less complicated and may even approve those with less-than-excellent credit, but the interest rates are often higher. These online lenders may market themselves to the veteran demographic, but typically they finance anyone who qualifies. Funds can typically be used to help start or grow a business with few restrictions or even refinance debt. 

Other Loans In The Community

Your local VA won’t have loans that they offer directly (the VA doesn’t make business loans), but they are often in tune with what’s going on near you. They can point you in the direction of opportunities by local government agencies, including those designed to hire other veterans or grow an economic sector in your state of town.

The SBA in your area may have ideas, too. You can also walk directly into your local lender to inquire about what programs they have for local veterans. Remember, the best loans aren’t always widely advertised, and since not everyone’s a veteran, they won’t know to ask. This is where doing your research in a “boots on the ground” manner can come in handy. 

When researching business loans for veterans close by, asking those you know may still provide the best outcome. 

How To Apply to Business Loans

Applying for any loan, especially a business loan, can be intimidating – especially if this is your first time going through the process. The important thing to remember is that the lenders are in the business of making money, and they want to see their loans paid back in a timely manner. They don’t make money by granting loans to those who likely can’t pay it back. So, your job is to give them all the information they need to consider you a good credit risk and get your loan approved without unnecessary back-and-forth.

What To Expect

Each loan type will have a slightly different process. In general, you can expect to have to provide information about your income, business history, personal data, and what you may use the loan for. You can go into the process better informed by asking yourself the following questions:

  1. How much do I need to borrow?
  2. How long do I want to pay the money back?
  3. What expenses will I use the money for? (Creating a checklist will help you plan an amount and can be used as supporting documentation for the loan application.)
  4. How will I budget for the loan payment each month or year?
  5. What tax or other financial implications will this loan have for my business?
  6. When do I need the money? Am I willing to wait longer for better loan terms or a larger amount?
  7. (For SBA loans: Have I exhausted all other funding options?)

You should also run a credit check to see that your credit history is clear and that there are no surprises that may turn off the lender to your application. Getting a FICO score can help you get an idea of where you stand, but a full report will give you the same information used by the lender when considering your business. Doing it well in advance of your loan will give you time to address issues, make corrections, or pay off any trade lines that can help boost your credit profile.

Pre-Application Checklist

Most loan applications can’t be completed in minutes, especially in the case of SBA loans. Some online lenders can give you a pre-approval decision quickly, however, which will then give you time to collect additional documentation to complete your request.

To save time and frustration, have this information handy before you apply:

  1. Full business data, including name, principle place of business, owner information, industry, and year created
  2. A complete business plan
  3. Expense sheet
  4. Financial projections for the next five years
  5. Relevant tax returns
  6. A summary of how you will use the money and plans for paying it back

If your business doesn’t have a long credit history, you’ll need to supply information on your own personal creditworthiness. Come with your Social Security Number or Employee Identification Number, as well as your business license and registration paperwork, if applicable. 

Veteran Business Loans FAQ

How much money can you get with a VA business loan?

The Department of Veteran Affairs (VA) does not currently offer funding or loans to veteran business owners. The only loans they administer are for housing mortgages. The VA works with lenders to offer home loans with no down payment, low-interest rates, limited closing costs, and removal of the Private Mortgage Insurance (PMI) requirement. If someone says they offer Veteran’s Business Loans, however, this is false; the VA provides business support, but not business funding. 

Are there grants for veterans to start a business?

It’s easier to find grants that reward existing businesses than those that are directed to startups. This is because grantors like to see that you have some history as a successful business and that the investment will go to a good place. You’ll have to search around to see the grants available in your community or check out the grants offered by the government. (Most are available to all business owners; the Veteran’s Department does not offer VA grants or loans to businesses.) 

Can I get a veteran business loan with bad credit?

While it may be different to get funding with bad credit, the Small Business Administration does offer loans to some qualified business owners who may not be able to get funding elsewhere. You’ll still need to demonstrate an ability to repay the debt, however. If your credit is truly considered “bad,” and you aren’t able to get credit cards or high-interest rate consumer loans, you will want to improve your credit score to get access to better credit offers over time. 

Aim for at least a 600 FICO for online lenders and a 680 for traditional lenders to see the best rates available in your area. Business loans for veterans with bad credit aren’t common, but they may exist. 

More Business Credit and Loan Resources For Veterans

While many of the resources have remained unchanged over the past few years, programs have a tendency to come and go. The best way to see what’s available to you is to check in frequently with your local SBA office and your VA office to get an idea of any new funding that’s available.

Don’t discount opportunities available to the larger business community, either. While veterans are a special group of business owners that sometimes get unique opportunities, the bulk of funding is made available to all companies. You don’t want to miss out on something valuable because you searched for something very specific (like “business loans for disabled veterans”) and failed to search for more wide-reaching funds. 

Additional resources include:

Credit cards

While these typically aren’t designed for long-term funding, and interest rates may be high, low-introductory rate offers come up from time to time and can help you budget during times of limited liquidity.

Some have partnerships with veteran groups with additional benefits you may find useful.

Credit union

Veteran’s credit unions price their loans competitively to give veterans and active-duty families a way to save, earn, and borrow.

Check with your existing credit union to see what rates look like and if there are any new veteran small business loan programs available. 


It takes some clever marketing work and word-of-mouth to get a crowdfunding campaign off the ground. If successful, however, the money comes without interest and goes directly into funding your business. Be aware that crowdfunding usually requires you to come up with perks to offer your backers. Consider how the fulfillment of these perks may take time and resources away from your core business activities. 

These are just the start of the resources offered. When looking for startup business loans for veterans, don’t hesitate to research ways to put that money to work when you get it. The VA also has programs for education, support, and tools to help you make that money go further. 

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