SBA business loans are quite popular for many businesses in numerous industries. If a company meets the SBA eligibility requirements and can qualify for a business loan via a participating lender, getting an SBA loan is often a great move. What’s more, the SBA also offers loans designed specifically for veterans. And with the SBA Veterans Advantage program in place, securing the funding needed for a veteran-owned business is now more possible than many might think.
What is the SBA Veterans Advantage? Essentially, it is an SBA-backed loan program in which veterans are not only given special consideration when it comes to the loan qualification process, but some savings and incentives enable veteran-owned businesses to more easily afford a loan. The loan programs are geared to help veterans acquire the necessary capital to start and/or grow their small businesses. In addition to providing funding, the SBA also has programs for veterans to access to online training, counseling for business, and access to resource partners within the network who can mentor veterans as far as becoming ready to submit their loan applications—that is all a part of the SBA Veterans Advantage.
Helping Veterans Save
A highly attractive aspect of this loan program is that the SBA will provide “fee-relief” depending on the loan size and applicant. The SBA’s goal here really is to help veterans get established in business. They are also invested in working with those business owners based in smaller communities, thereby infusing those communities with more businesses, more jobs, and more opportunities. In many ways, the SBA Veterans Advantage truly is a win-win.
To help veterans save during the loan process, the SBA has implemented a credit scoring model; this, in turn, was designed to alleviate some of the cost of underwriting small business loans. And for smaller dollar amount loans, as noted, many of the fees are dropped. For example, if a loan is 150k or less, there is an upfront guaranty fee of zero. And for loans that are between 150k and 500k, the upfront guaranty fee is generally fifty percent less than that of the same loan for non-veterans.
Benefits of an SBA Loan for Veterans
So why should you apply for the SBA Veterans Advantage program? The benefits are almost too many to list here.
– Lower (or no) fees. We’ve already talked about how to make funding more accessible to veterans. The SBA has structured its loan fees to have no upfront guaranty fee in some cases.
– Favorable interest rates. One of the main reasons business owners turn to SBA loans over other loan products is that interest rates tend to be more attractive than you can get with some other commercial financing options.
– More generous repayment terms. Versus short-term business loans, for example, you can get a more extended repayment period with SBA loans. On average, repayment periods are around ten years.
The SBA tends to offer more extensive percentage financing options than you can otherwise get. Generally speaking, SBA loans will often cover eighty to ninety percent of a project’s costs.- Financing for up to 90% of the project costs in some instances.
– Easier to qualify. If you have been turned down for other types of financing, looking into an SBA Veterans Advantage loan could be your best option. Because the money is backed by the SBA (up to a certain percentage), lenders view these loans as less risky. If the borrower, for whatever reason, defaults on loan payments, the SBA reimburses the lender up to the stipulated percentage.
Who Can Apply for the SBA Veterans Advantage Loan Program?
The program is open to veterans and their spouses for business funding. Specifically, their criteria mention the following eligibility requirements:
– Honorably discharged veteran
– Active National Guard member or reservist
– Active duty military who qualify for transition assistance program
– Current spouse of any of the above
– Widowed spouse of a military member who died as a result of a service-related activity
The opportunity is there. This program is certainly worth checking out for veterans looking to start a business or grow their current endeavor.
First Union Lending is Here to Help
We work with veterans all around the country, getting them the funding they need precisely when they need it—not weeks or months from now. Some clients receive the money in as little as two days. If you’re a veteran seeking financing for your small business, we would love to consult with you. Our programs are fast and flexible. Call today and let’s get started together!