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Veteran Small Business Loans

Currently, one out of every 10 businesses in the U.S. is veteran-owned, and the numbers are continuing to grow with more than 21 million veterans in the U.S.

This article contains general information and is not intended to provide information that is specific to American Express, or its products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.

Small business financing for veterans

After active duty, many veterans choose business ownership to continue giving back to their community and providing income for their families. A veteran business loan can help you:

  • Hire more employees
  • Open a new location
  • Generate extra working capital to keep your business running

There are many funding options for veteran business owners, from a Veterans Advantage small business loan to business grants or traditional business financing.

Benefits of a veteran small business loan

If you or your spouse served in the military and need to fund your small business, or need financing for start-up business costs, there are many small business loan options for veterans. These can help cover expenses as you establish and maintain your small business.

Some of the most common ways veteran borrowers use small-business loans include:

  • Purchase more inventory: Having a small business loan can give you peace of mind and buying power as you invest in inventory that you know will yield a significant return.
  • Expand office space or locations: With extra working capital, you can expand your business without having to rely on existing cash flow.
  • Launch a new marketing campaign: Whether you're using online tools, email marketing, or more traditional methods, a small business loan can help you get the word out about your business.
  • Upgrade your equipment: From buying new gear to updating your existing equipment, a small business loan can help you ensure your business runs efficiently and effectively.
  • Hire and train new employees: When you are ready to expand your business, using a small business loan to hire and train new employees can give you breathing room to focus on growing your business.

Types of small business loans for veterans

There are plenty of options when it comes to small business financing for veterans but not all will work for every business. Here are some options to consider:

Business line of credit

A line of credit is an arrangement with a financial institution that establishes a maximum loan amount the lender will allow the borrower to take. You can withdraw any amount from the line of credit at any time, as long as you don't exceed the maximum credit line amount amount in the agreement or your available balance of funds.

A business line of credit is similar to a credit card: You use it as you need it. As you make payments specified by the repayment terms, you can borrow or use more of your credit line as you repay the principal.

Veterans who are small business owners can apply for a business line of credit online. Many online-lending providers will ask for business and personal information, including veteran status, assess your business’s performance by linking business accounts, and provide a fast approval. If approved, you'll quickly know your credit line limit and fee rate.


Microloans are small loan amounts, generally offered to those with a lower credit score or the collateral typically required for a traditional loan. This makes microloans an alternative option to small business loans for veterans with bad credit. Microloans are provided to small businesses through nonprofit organizations across the country, including the SBA's Microloans program. Although, microloans are available up to $50,000, the average microloan amount is around $13,000.

SBA loans

The Small Business Administration (SBA) offers funding programs tailored to veteran- owned businesses. The SBA Express loan program offers borrowers up to $500,000, and waives certain fees for veterans, members of the National Guard, and qualifying spouses.

More established veteran-owned businesses looking for larger loan amounts can apply for 7(a) loans, up to $5 million, with waived or reduced fees as part of the SBA's Veterans Advantage program. If you're just starting out or need smaller-scale financing, the SBA also created its own microloan program to foster growth for small business owners.

Working capital loan

Working capital is the cash available for the day-to-day expenses of running a business. Net working capital is a calculation of current assets minus current liabilities that helps measure a company’s efficiency and short-term financial performance. A working capital loan allows you to continue your daily operations without tapping into your cash reserves.

Short-term business loans

Short-term business loans are designed to meet immediate financing needs, like bridging gaps in cash flow, dealing with unexpected costs, or taking advantage of new business opportunities. Rather than pulling funds from other parts of your business, you can cover your costs with a short-term loan while keeping your daily cash-flow needs intact.

This type of loan may be a good option for veteran-owned businesses with fluctuating seasonal cash flow, especially if you know you can quickly pay back what you borrowed. Several financial institutions and online lenders offer short-term loans specifically tailored to veterans.

Business credit card

A small business credit card is one way that business owners can pay for various business-related expenses. Small businesses can help conserve cash flow by using a small business credit card instead of cash for the items they need.

However, credit cards often come with higher costs vs. low-interest loans through a lending company, and not all expenses may be covered with a card, such as lease payments and payroll.

Other business resources to help veterans

Beyond just funding, there are many other programs and grants for veterans to help fund your business. These include:

  • The Office of Veterans Business Development, part of the SBA, offers several programs and services to support veteran entrepreneurs and military spouses through training, mentorship, access to capital, preparation for opportunities in federal procurement, and connections within commercial supply chains and disaster relief assistance. It can also help facilitate small business loans for disabled veterans.
  • Boots to Business provides veterans’ services and entrepreneurial training on how to start and grow a business with a special focus on the areas veterans need to consider most. The program, typically free of charge, is available for transitional military service members and veteran military spouses as an in- person course with follow-up online courses.
  • Hivers and Strivers, an Angel Investment Group, invests $250,000 to $1 million in start-ups founded and run by graduates of U.S. Military Academies. The group works closely with its network of investment partners to broker deals for the entrepreneurs when additional investments are needed.
  • Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE) is a three-phase business training that trains women veterans on starting and growing businesses and provides great networking opportunities. V-WISE is open to women veterans, active-duty female service members and female partners and spouses of active service members, and veterans that wish to start a business venture.
  • The Entrepreneurship Bootcamp for Veterans (EBV) is a national program that offers training in entrepreneurship and small business management to post- 9/11 veterans and their families. The program's goal is to open the door to economic opportunity for our veterans and their families by helping them develop and sustain an entrepreneurial venture.

Many of these programs can be used with the funding listed above to help accelerate the growth of your business.

FAQs: Veteran-owned business financing

How hard is it for a veteran to get a business loan?

Many previous loan initiatives like the SBA Veterans Advantage and Patriot Express Loan programs that were created to assist veteran-owned businesses and entrepreneurs have changed in recent years. As a result, many veteran small business owners have found fewer funding options and limited information on suitable small business loans options.

That said, the SBA's Veteran Business Outreach Center (VBOC) program helps fill the information gap. It also provides workshops, counseling, and mentorship for veterans interested in starting or growing their small business.

Beyond the SBA, there are financial institutions and online lenders that will support veteran entrepreneurs and help you get small business funding that prioritizes flexibility.

Does the VA offer business loans to veterans?

The Department of Veterans Affairs (VA) doesn't offer direct funding to veterans. There is a Veterans Advantage program that offers reduced fees for veteran-owned businesses seeking 7(a) loans, but those are funded through the SBA, not the VA.

Can I get a veteran business loan with bad credit?

Most lending options have minimum credit score requirements, which could limit access to capital for veteran small business owners whose prior service interfered with building up credit history.

But some lenders may offer more flexible terms for veterans. There are also online lenders that specialize in dealing with borrowers with bad credit.

What's more, if you have a low credit score, you may be able to pledge some of your real estate or small business equipment as collateral.

Some small business financing options may still work with a bad or limited credit history. It's worth considering:

How to get a veteran small business loan

When you're a veteran entrepreneur starting or currently operating your own business, you may find you need some type of financing. You may need cash for start-up costs and essentials like inventory, payroll, equipment, and marketing. Rather than dipping into your profits, using a veteran business loan can help you cover your expenses while keeping your cash flow intact.

Get the funding that you need for your small business to better understand your loan options.

The material made available for you on this website is for informational purposes only and is not intended to provide legal, tax or financial advice. If you have questions, please consult your own professional legal, tax and financial advisors.

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