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SBA Loans For Veterans: Rates, Requirements, & How To Apply

After serving their time in the military, many veterans choose to start a business. Military veterans own about 7.5% of the businesses in the United States.

Just like any other small business owner, there comes a time when these entrepreneurs need funding, whether it’s for getting equipment, expanding the company, or funding a startup project. And like civilians, many veterans are searching for a business loan that can help them expand their business.

For these business people, an SBA VA loan could be the answer.

What May be the SBA?

SBA stands for Sba. It’s a government organization which helps smaller businesses.

Through the SBA, business owners have access to education, information, and training. The SBA serves as an advocate for smaller businesses and provides a vital piece of the entrepreneurial puzzle: business financing.

Learn much more about the Small Business in our help guide to the SBA for small businesses.

SBA Home loan programs For Veterans

The SBA provides a number of programs — loan and otherwise — to help veterans and active servicemembers.

The SBA currently offers two home loan programs for veterans:

  • Veterans Advantage Guaranteed Loan Program
  • Military Reservist Economic Injury Disaster Loan Program (MREIDL)

Previously, the SBA also offered a course called “SBA Patriot Express Loan Program”. However, the program is no longer functioning. People interested in the defunct Patriot Express program should consider applying for an SBA Express Loan through the Veterans Advantage Guaranteed Loan Program.

The SBA doesn't offer any grants to veterans. Find other grant options in our guide to the very best business grants for veterans.

The organization offers a number of resources to provide veterans the various tools they need to flourish in business. SBA training programs for veterans include:

  • Boots to Business
  • Thee Women Veteran Entrepreneurship Training Program
  • Service Disabled Veteran Entrepreneurship Training Program
  • The Veteran Federal Procurement Entrepreneurship Training Program.

Learn more about working out programs for veterans with the SBA website.

Learn much more about there's two main SBA loan programs for veterans below.

SBA Veterans Advantage Guaranteed Loans

The Veterans Advantage Loan Program is a popular choice for veterans because you can use the loan for many business purposes, for example expanding or getting a business, purchasing equipment, working capital, or debt refinancing.

SBA VA Loan Program Terms, Rates, & Fees

These would be the current rates and costs for that SBA Veterans Advantage Loan Program:

The Veterans Advantage Loan Program belongs to the SBA’s most popular program — the SBA 7(a) Loan Program. When you obtain a Veterans Advantage Loan, you go with the standard SBA 7(a) Loan process (or optionally with the SBA Express Loan process if the loan is for $350,000 or less).

The main advantage of the SBA’s VA loan program is that veterans have access to reduced guarantee fees compared to other borrowers.

One of the most significant drawbacks for an SBA 7(a) Loan is the timeline for finding the money. The application, approval, and funding process may take months in most cases. However, the SBA Express Loan program can offer faster approval.

How To Qualify For A Veterans Advantage Loan

To qualify for a Veterans Advantage Loan, you must qualify for an SBA 7(a) loan. These include:

  • Must run a for-profit business
  • Must meet the SBA definition of a small business
  • Must prove you are able to repay the loan
  • Must 't be delinquent on any debts and have any recent bankruptcies

Learn more about 7(a) qualifications within our within our help guide to SBA 7(a) loan requirements.

You must reveal that your company is a minimum of 51% owned and controlled by veterans along with meeting standard 7(a) loan requirements. The SBA definition of veterans includes:

  • Veterans
  • Active-duty military within the Transition Assistance Program
  • Reservist or National Guard member
  • Spouse of any of the aforementioned, including those who were widowed due to death during service or from service-related disabilities

How To try to get A Veterans Advantage Loan

For the SBA Veterans Advantage Loan program, you have to find a qualified lender to work with, such as a bank .

The SBA provides a Lender Match service that connects businesses having a lender within their area. While some applications could be completed online, lenders generally require a telephone call or in-office visit by the applicant.

After getting in contact with a lender, you will have to put together an application. You must be prepared to show that you can repay the loan and operate your business successfully. The application process will need additional documentation, including:

  • Business and private income tax returns
  • Financial statements, projections, business certificates, and licenses
  • A business plan
  • SBA forms such as DD Form 214, DD Form 1173, or a different relevant form

Military Reservist Economic Injury Disaster Loan Program (MREIDL)

Th Military Reservist Economic Injury Disaster Loan Program is made to help cover operating costs while a veteran is on active duty. Military reservists and members of the nation's Guard who face economic hardship during or following a deployment could possibly get the financing they need for his or her business with an MREIDL.

MREIDL Program Terms, Rates, & Fees

These are the current rates and fees to have an MREIDL:

While the SBA does typically require collateral on Military Reservist EIDL, it’s worth noting the SBA won't ignore a loan simply for lack of collateral. Still, the borrower is going to be necessary to set up any available collateral, including real estate.

These loans are extremely attractive to military veterans due to their repayment terms and low-interest rates. SBA Veteran Loan rates are currently set at 4%. These loans provide the working capital needed to pay necessary expenses; funds cannot be used for income or profit loss, refinancing debt, or business expansion.

How To Qualify For A MREIDL

The Military Reservist Economic Injury Disaster Loan Program is available to service members, reservists, or National Guard members who're on active duty.

To qualify, service members must make an application for the borrowed funds during active duty or a period of twelve months following the end of active service or discharge.

How To Apply For A MREIDL

For the Military Reservist Economic Injury Disaster Loan Program, contact the Disaster Assistance Customer support Center via phone or email to obtain a credit card applicatoin.

VA SBA Loans: Final Thoughts

Although the process of applying for an SBA loan isn’t easy, the competitive terms make it worth it for many service members, veterans, and their families.

SBA Veteran Loans allow people who serve their country to be able to truly live the American Dream through successful ownership that belongs to them business.

Decide an SBA loan program for veterans isn’t right for your small business? Learn about more kinds of SBA loans for small businesses.

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