The U.S. Small Business Administration (SBA) recognizes the importance of quality small business loans for veterans and offers them special benefits through their SBA loan programs.
About the Small Business Administration (SBA)
The U.S. Small Business Administration (SBA) was created in 1953 to counsel, assist, and protect the interests of small businesses. Eventually, the SBA established government guaranteed loan programs with benefits like longer repayment terms, lower down payments, and more relaxed collateral requirements compared to conventional loans. The idea was to help businesses start and expand while stimulating the economy and helping to add jobs to the communities they serve.
The SBA has grown significantly and now has a variety of specialized programs to help small businesses in all areas. However, the SBA tailors support to military veterans by offering education, counseling, and mentoring through various programs.
Benefits of SBA Loans for Veterans
- Significantly more affordable capital compared to conventional or other non-traditional loans
- High loan limits – up to $5 million ($5.5 for manufacturers) for the SBA guaranteed portion – no limit overall
- Long repayment terms – up to 25 years
- Fixed interest rates for the life of the loan
- Lower down payment requirements – as low as 10%
- Additional benefits available through VetLoan Advantage – a rebate program created in partnership between NADCO and the SBA to support veteran small business growth and increase SBA 504 loans to veterans by 5% per year. This initiative is part of SBA’s Boots to Business, which is a multi-phased approach to help veterans transition back to civilian life. Growth Corp is a proud partner in the VetLoan Advantage program.
How the SBA 504 Loan Program Works
The SBA does not make direct loans to small businesses. Rather, it sets the credit and eligibility guidelines for loans, which are then made by its partners (banks, certified development companies [such as Growth Corp] and other lending institutions). The SBA guarantees that these loans will be rapaid, thus eliminating some of the risk to the lending partners. When a business applies for a 504 loan, it is actually applying for two loans: a commercial first mortgage with a bank or lending institution and a commercial second mortgage with a Certified Development Company.
Ready for a Business Loan? How to Prepare…
Veterans preparing to meet with their banker to discuss the 504 Loan Program, or other SBA loan programs, should gather and share the documents listed below:
- Business plan that includes managerial experience
- Three years of recent personal and business tax returns (if applicable)
- Three years of financial statements (if applicable)
Plus, you can expedite the loan process even further by completing/gathering the following documents:
- Personal history and financial statement (SBA Form 413)
- One year of projections
- A list of ownership and affiliations
- Business certificates and license
- Past loan history
- Resumes for each of the pricipals of the business (20% or more ownership)
- Franchise documents (if applicable)
SBA Loan Eligibility
Most for-profit businesses qualify…
- Business owner(s) must be a U.S. Citizen or resident alien with a green card
- For-profit businesses
- Any business structure (Sole Proprietorship, Partnership, Corporation, LLC, LLP, etc.)
- By SBA definition the business must be small: this generally means less than $15 million in net worth and less than $5 million in annual after-tax profits
Additional SBA Resources for Veterans
SBA programs feature customized curriculums, in-personal classes, and online courses to give veterans the training to succeed. These programs teach the fundamentals of business ownership and provide access to SBA resources and small business experts.
Boots to Business
Boots to Business is an entrepreneurial program offered on military installations around the world and a training track of the U.S. Department of Defense Transition Assistance Program (TAP). Boots to Business Reboot extends the entrepreneurship training offered in TAP to veterans of all eras in their communities. Boots to Business Revenue Readiness is available after completion of Boots to Business or Boots to Business Reboot and provides a six-week virtual program that prepares participants to take thier business idea from concept to an executable business model.
Women Veteran Entrepreneurship Training Program
The Women Veteran Entrepreneurship Training Program provides entrepreneurial training to women veterans, women service members, and women spouses of service members and veterans as they start or grow a business. SBA funds these entrepreneurship training programs through grantees:
- IVMF – Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE)
- Lift Fund – San Antonio
Service-Disabled Veteran Entrepreneurship Training Program
The Service-Disabled Veteran Entrepreneurship Training Program provides entrepreneurship training programs to service-disabled veteran entrepreneurs who aspire to be small business owners or currently own a small business. SBA funds entrepreneurship training programs for service-disabled veterans through grantees:
- Veterans Entrepreneurship Program (VEP) – Riata Center for Entrepreneurship, Spears School of Business at Oklahoma State University
- Entrepreneurship Bootcamp for Veterans – St. Joseph’s University – St. Joseph’s University
- Warrior Rising | Charitable Organization Empowering Veterans in Business
- Veteran Entrepreneurial Training & Resource Network
Veteran Federal Procurement Entrepreneurship Training Program
The Veteran Federal Procurement Entrepreneurship Training Program delivers entrepreneurship training to veteran-owned and service-disabled veteran-owned businesses nationwide interested in pursuing, or already engaged in, federal procurement.
The SBA provides one-on-one counseling in local communities around the nation through our SBA district offices and resource partners (consisting of Veterans Business Outreach Centers, Women’s Business Centers, Small Business Development Centers and SCORE). Find an SBA resource in your local community and get started today.
- SBA District Offices
- Veterans Business Outreach Center (VBOC) Program
- Women’s Business Centers
- Small Business Development Centers
Military spouses can also connect with qualified and experienced business mentors, other military spouse business owners, and DoD-certified career counselors through the Military Spouses and Entrepreneurship group on LinkedIn. Join this group to share and find information, offer and receive advice, and ask and answer questions about business ownership from the military spouse community.
Access to Capital
Do you have a great business idea but are uncertain of how to fund it? SBA is working with lenders across the nation to help get small business loans into the hands of more military spouse entrepreneurs. Find out about which opportunity is right for you:
Who is Eligible for Veteran Assistance?
To take advantage of these programs, services, and benefits, SBA has outlined who qualifies on their Veteran-Owned Business page, but some of those mentioned include:
- A military veteran
- A service-disabled veteran
- Active-duty military participating in the Transition Assistance Program
- A Reservist or National Guard Member
- The current spouse of any veteran, active duty service member, reservist, or National Guard member
- The widowed spouse of a service member who died while in service or of a service-connected disability
Growth Corp is Proud to Serve the Military Community of Small Business Owners
For 35 years, Growth Corp has been helping small business owners like you! We are proud to bring our experience and personalized customer service to the military community. Not only are we a proud partner in the VetLoan Advtantage program, but Growth Corp is also the largest CDC in Illinois, the top 504 Lender in Chicago and a market leader in quality, consistent service. In addition, Growth Corp has earned an Accredited Lender (ALP) status with SBA, which grants us the ability to expedite the processing of loan approvals and closings. Contact any member of our Lending Team to discuss your goals and ideas.