There are many funding options available to those who have served our country and are looking to start their next phase of their career. The Small Business Administration (SBA) offers loans with special benefits and training designed just for veterans.
Although commonly referred to as VA loans, the SBA oversees the loans, not the Department of Veterans Affairs. The SBA has an Office of Veterans Business Development (OVBD) that administers business loans and manages all SBA programs used by qualifying veterans and servicemembers.
Types of SBA loans for veterans
Veterans participate in the same types of SBA loan programs as other businessowners but with some benefits given their veteran status. These programs are not grants and must be repaid with interest. There are three types of SBA loans for veterans:
- SBA 7(a) Loan: With an SBA 7(a) Loan, active duty and veterans, and their spouses, can receive up to $5 million in funding. The SBA Veterans Advantage program waives all guaranty fees for loans of $125,000 or less, and offers a 50 percent reduction in guaranty fees for loans of more than $125,000.
- SBA Express Loan: Commonly called low-dollar funding, the SBA Express program operates similar to a SBA 7(a) loan, but generally funds up to $150,000. As with the 7(a) loan, Veterans Advantage waives all upfront loan guaranty fees for qualifying veterans.
Tenet Financial Group is able to offer a Veterans Freedom Loan program for which numerous business or franchise types would qualify including new business or new franchise, business or franchise expansion and startups.
With these loans, the Small Business Administration offers curriculum specifically designed to help veterans succeed in their business endeavors. In-person and online courses teach veterans about business fundamentals and SBA resources and feature successful business owners.
Eligibility for SBA veterans loans
Veterans benefits for SBA loans are available to veterans, service-disabled veterans, active-duty service members, reservists and transitioning service members. Active-duty military within 12 months of separation and retirees within 24 months of retirement are eligible for SBA Express loans. The program is also available to veterans’ dependents and survivors.
For a business to be eligible for a loan, a qualifying veteran must own at least 51 percent of the business and the business status must be for-profit status.
How the program works
The SBA does not provide the loans directly to veterans; rather, it works with traditional lenders to match borrowers with the right lender at a good rate. Loan specifics such as interest rate, collateral, and terms vary from borrower to borrower.
Tenet Financial Group has eight decades of combined funding experience and we are SBA Loan experts. We can help you start a new business, open a franchise, access working capital, and much more. Contact Tenet Financial Group today to learn more.