Business Loans for Veterans: 4 Options You Should Consider

Business Loans for Veterans

Transitioning from military life back to the life of a civilian isn’t always easy. Finding the necessary capital to start a business or keep one afloat during the unsteady early years can be the difference between beginning a brand new and productive phase in life or struggling to find suitable employment elsewhere. Business financing for veterans seems like the perfect vehicle. But there aren’t as many options designed just for veterans as you might think.

Veteran-Friendly Business Financing Options

The SBA has a few programs that could help. And while there is also federal grant program through the VA, it has pinpoint-specific eligibility criteria. Most veterans aren’t eligible.

But that doesn’t mean you don’t have options. The same small business financial tools that are available to the public are also available to veterans, and some investors show a lot of interest in helping those who have served this country.

If your dream is to start or grow a veteran-owned business, here are a few places to look for the small business capital to make it happen:

#1: Military Reservist Economic Injury Disaster Loan (MREIDL) Program

The MREIDL program is designed for business owners who are military reservists. The goal is to offer emergency funds in the form of low-interest loans to help keep an existing business afloat when the reservist is called up for active duty, if the absence of the reservist is determined to have a severe and negative effect on the profitability of the business.

MREIDL loans aren’t designed to refinance long-term debt, explains the SBA, and they aren’t intended for expansion or to start a new business.

#2: SBIC Program Financing

Small Business Investment Companies are investment funds from privately raised capital and loans through the SBA that help provide long-term loans to small businesses. To qualify, the business must be worth $18 million or less, and have an income of $6 million or less during the past two years.

SBICs offer loans, debt securities, and equity, and the SBA explains that while the maximum interest rate is 19 percent, most products have lower rates. Although SBIC funding is available for any type of business, the most likely to qualify are existing, established businesses with proven revenue.

#3: Traditional SBA Funding

The SBA has three loan programs that suit a wide range of business needs. Although they aren’t geared specifically for veterans, they are definitely worth a look. The Basic 7(a) loan program has a broad scope and can help with startup, acquisition and expansion of a small business as well as general working capital. The Certified Development company (CDC) 504 loan program helps business owners make large purchases, such as buildings.

The SBA Microloan program is simpler to qualify for than the other two. And although it has a cap of $50,000, funds can be used for working capital, supplies, inventory, fixtures, equipment, and nearly any other need that a small business owner might have.

#4: VA Service-Disabled Veteran-Owned Small Business (SDVOSB) Program

The VA’s program, SDVOSB, offers a host of assistance for service-disabled vets who want to become self employed. Funds are available in the form of grants, which do not have to be repaid. Entrepreneur Magazine explains that eligible veterans fall into either Category I or Category II, which determine how much assistance is available.

The SDVOSB program funds can be used for purchasing equipment for the business, supplies, inventory, and training classes. It can also be used to pay for marketing and advertising, and any licensing fees that the business owner may incur.

Veterans have access to all of the small business funding that anyone else has, plus a few other options that are designed just for ex-military. Another program to watch is the Veteran’s Business Fund. This program is not accepting applications just yet. But once it has enough funds, it will offer non-interest loans to help veterans start and grow businesses in cases where there isn’t enough capital to qualify for a traditional loan.

As with any civilian, veterans have hurdles to jump and obstacles to navigate around while applying for small business funding. Not every vet will qualify for all of the programs. And in some cases, no program is suitable. But Credibly is an alternative.

We offer funding solutions that can help veteran-owned businesses get off the ground, and grow once they’re in operation. Prequalify Now and let Credibly fill your working capital needs and your business can thrive.