Whether you want to start a business or need help keeping the one you already have going, knowing about the financial resources you have can help you reach your goals.
VA loans provide unique funding options for military service members and their families. Read on to learn more about VA business loans, who is eligible, and other information that will help you decide if a VA loan is right for you and your business.
What is a VA loan for a business?
Who can get a VA loan for a business?
A Brief Look at VA Loans
What is a VA loan for a business?
The U.S. Small Business Administration (SBA) created the VA business loan program to help military veterans start their own businesses. The SBA helps qualified veterans find places to borrow money when they wouldn’t know where to look on their own. Service members can also get similar help from other government agencies and lending institutions.
Who can get a VA loan for a business?
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You may be able to get a VA business loan in more than one way. As part of the Veterans Advantage program, the 7(a) Loan program of the SBA gives loans to veterans and their families. Check out the categories below to see if you meet the requirements:
Any veteran who left the service on good terms
Veterans who got hurt on the job
Those in the military who signed up for the Transition Assistance Program (TAP)
Members of the National Guard
Reservists
Spouses of active-duty service members, veterans, veterans with service-connected disabilities, reservists, or National Guard members
Widows of military men and women who died in battle
Also, these people and their businesses must own at least 51% of the business in order to be eligible for a loan.
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A Brief Look at VA Loans
VA business loans might seem hard to understand, but there are many resources and loan options to help you choose and apply for a VA loan. Here’s a quick look at VA loans to help you decide what to do next:
There are different kinds of VA loans.
Depending on which lender you choose, there are several different types of VA loans and loan programs you can apply for:
SBA Express Loan: This loan is great for business owners who don’t have a long credit history. It’s part of the SBA’s Veterans Advantage Program. A business owner can get a loan of up to $350,000 and pay it back as a term loan or a line of credit.
SBA Veterans Advantage 7(a) Loan: The goal of this loan is to help veteran business owners get the money they need to start or grow their businesses. This loan program is popular because the SBA guarantees that loans of $125,000 or less will have no fees.
Military Reservist Economic Injury Disaster Loan Program (MREIDL): This program gives up to $2 million in capital to veteran-owned businesses when the owner or one or more key employees are called to active duty. Its goal is to help the business keep going without key employees.
Service-Disabled, Veteran-Owned Small Business Program: This program is meant to help disabled veterans get government contracts for property, machinery, and other business assets before other businesses do.
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What do they talk about?
VA loans can cover a variety of business expenses, depending on your needs and the loan amount. From MilitaryBenefits, here are some examples:
Help pay for start-up costs.
Pay off business debt.
Get some property.
Get things in stock.
Hire new employees.
Invest in new inventory, property, or employees to grow your business.
Hire contractual professionals.
Get money for working.
Repair damages from natural disasters.
Where to apply for a VA loan for a business
According to LendingTree, there are a variety of ways you can apply for a VA business loan. Some veterans may choose to apply to a lending program through the U.S. Small Business Administration (SBA) or the U.S. Department of Veterans Affairs (VA), which connects them with possible lending institutions. Others might look to a local organization or a private lender. To protect your privacy, you should make sure the lender is trustworthy before giving them your personal information or paying any fees.
How to use the SBA to apply for a VA loan
Here is one way to ask the SBA for a VA business loan:
Visit the site for the SBA.
Choose “Business Guide.”
Go to the “Grow Your Business” page.
Click “Businesses owned by veterans.”
Scroll down until you see “Funding for Small Businesses Owned by Veterans.”
Click “Find Lenders” on the “Lender Match” page to connect with SBA-approved lenders.
Answer a questionnaire about your loan needs.
Wait to be contacted by one or more lenders.
Talk about rates to figure out which loan option is best for you.
Get your paperwork in order before you fill out your application. You may need your own Social Security number or the number of your spouse, as well as discharge papers and identification tags (dog tags).
Fill out your application(s) and send them in to see if you qualify.
VA loan FAQs
How does a VA loan for a business work?
VA business loans help veterans start a business or keep the one they already have going. A government agency usually helps veterans get their finances in order before putting them in touch with a possible lender. Loan recipients may have to pay an upfront fee to get the loan(s). After a certain amount of time, they may also have to pay a monthly interest rate.
Can someone with bad credit get a VA business loan?
The U.S. Small Business Administration helps veterans get loans faster by using a credit scoring model. So, people with good credit may get loans faster than people with bad credit. But the SBA also offers training courses and counseling services that may make it easier to get a loan, even if you have bad credit.
With a VA business loan, how much money can you get?
The Military Reservist Economic Injury Disaster Loan Program of the U.S. Small Business Administration says that veterans can get up to $2 million for their businesses (MREIDL). Owners of businesses should talk to LenderMatch to find out exactly what they can get based on their qualifications and current situation.