5 Best Small-Business Loans for Veterans of September 2021

Can you get a VA business loan?

To qualify for a veteran business loan, your business must be majority owned (at least 51%) by someone in one of the following categories:

• Active-duty military service members participating in the Transition Assistance Program.
• Honorably discharged or service-disabled veterans.
• Reservists and active National Guard members.
• Current spouse of a veteran, active-duty service member, reservist or guard member.
• Widowed spouse of a service member who died in service or from a service-related disability.

You’ll also need to meet general small-business loan qualifications, such as credit score, revenue and time in business. The exact requirements will vary by lender.

» MORE: How to get a business loan in five steps.

Veteran business loan options

Veteran business loans, often referred to as VA loans, are available through commercial lenders, nonprofit organizations and the Small Business Administration. (The Department of Veterans Affairs does not provide business loans.)

While some popular loan programs for veterans have been discontinued, including the SBA’s Veterans Advantage and Patriot Express Loans, there are plenty of other options for veterans and their families.

Veterans can borrow up to $1 million ($500,000 after Oct. 1, 2021) through the SBA’s Express loan program. Upfront guarantee fees, typically 2% to 3% of the loan, are waived for veterans, reservists, national guard members and spouses who qualify.

SBA Express loans have a quicker turnaround time than other SBA loans — 36 hours compared with several weeks or months — but the underwriting criteria can be strict. You’ll likely need a minimum FICO score of 650, strong annual revenue and at least two years in business to get an Express loan.

If you just launched your businesses or have bad credit, look into online lenders, which tend to have more flexible requirements (but higher rates).

Other SBA programs for veterans or service members include:

• Military Reservist Economic Injury Disaster Loan Program. The MREIDL can provide up to $2 million if you have an essential employee who is a military reservist and gets called to active duty. This program is for covering regular business operating costs, not starting or expanding a business.
• SBA 8(a) program. The SBA offers this business development program to eligible businesses, which can include those owned by veterans. The SBA 8(a) program provides small businesses with a certification that can improve their chances of winning government contracts, as well as help navigating the bidding process.

» MORE: Small-business grants and resources for veterans

Are there startup business loans for veterans?

Lenders generally prefer to do business with established companies that have strong cash flow. This often disqualifies startups with less than a year of operating history and little revenue.

However, veterans and other new business owners aren't completely out of luck: If you have good personal credit, your options include business credit cards and personal business loans.

• Business credit cards. These typically provide up to $50,000 in revolving credit, meaning you can borrow and repay from the credit card as needed, and pay interest only on withdrawn funds.
• Personal loans for business. These offer a lump sum of cash, with a fixed interest rate and repayment terms.

Both options are unsecured, meaning you won’t have to put down collateral — an asset, such as real estate or inventory — to qualify.

» MORE: Where to find startup business loans

Comparing small-business loans for veterans

Compare annual percentage rates, or APRs, when shopping for a loan to get a holistic picture of a loan's cost. NerdWallet's small-business loans comparison tool can help. We've gauged lender trustworthiness, market scope and user experience, among other factors to help you choose the best loan.

If you're a veteran or related to a service member, look at lenders like Navy Federal Credit Union, which cater to members of the military. Discounts may be available from other lenders, too. Bank of America reduces loan administration or origination fees 25% for veterans, for instance.

For other financial resources for veterans, check out our list of small-business grants for veterans or personal loans for veterans. The SBA also offers Veterans Business Outreach Centers across the nation.