5 Best Small-Business Loans for Veterans of June 2021

Can you get a VA business loan?

The Department of Veterans Affairs does not provide business loans. But a different government agency — the Small Business Administration — previously offered discounted loans to veterans via the Veterans Advantage lending program, also known as "VA loans."

VA loans reduced or eliminated fees on SBA 7(a) loans for veteran-owned businesses. This program is no longer available, but veterans can still apply for other SBA loans.

SBA loans are available through banks, credit unions and other lenders. The government partially guarantees SBA loans, so lenders may offer you a lower interest rate or more flexible terms. However, strict underwriting criteria and a long application process may make other options — like an online lender — better fit your needs.

Other SBA programs for veterans or servicemembers 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.
• Patriot Express Pilot Program. This program offered low-interest Patriot Express Loans to veterans and other members of the military community. Patriot Express Loans were discontinued in 2013.

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$50,000 in revolving credit, meaning you can borrow and repay from the credit card as needed, and pay interest only on withdrawn funds.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

When shopping for a loan, be sure to compare annual percentage rates, or APRs, which give you 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 servicemember, look at lenders that cater to the military. Some may not offer funding; for example, USAA’s business loan program ended in 2018. But discounts may be available from other lenders. 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.