SBA Loans for Veterans

What’s the SBA like?

It is firstly important to know what the SBA stands for and how it can offer benefits to a lot small businesses before stating the details of SBA loans for veterans. SBA supports the management of small businesses. It is a governmental agency which assists small business owners with access to important education, awareness and training.

Today the SBA serves as a small business promoter and serves as a critical piece of the entrepreneurial puzzle which is company funding.

How are veterans benefiting from the SBA?

It is a difficult process for anyone to secure a business loan, but it could be particularly difficult for the military veterans. As traditional loans need a strong finance history and most veterans, and active-duty service members may have a few gaps in their own credit history. Those veterans who have served in the military for any amount of time may not have credit union records which are required by lenders, to determine the creditworthiness of veterans. These include things such as credit cards, and utility bills, and payments on mortgages. This can be quite difficult, if not almost impossible, to secure a business loan. That’s where you can call on the SBA to aid the military veterans.

Today SBA loans need the usual documentation and information like credit scores as well as verification of earnings. Lenders should, however, deal with the unique situations of military veterans and providing the funding they also need.

The SBA guarantees these loans, so lenders are more likely to lend to eligible borrowers. Furthermore, business owners benefit from the VA SBA incentives, including lower interest rates and more flexible terms. (It’s great because veterans won’t be stuck with subprime, conventional loans that could drive them into more debt and worse – even bankruptcy).

SBA Loan for Veterans

The SBA introduces a new measure to help get small business loans into the hands of veterans

The U.S Small Business Administration (SBA) has introduced a new measure to help get small business loans into the hands of veterans. The new measure lowers the borrower upfront fee to zero, for up to the sum of $350,000 for all veteran loans approved under the SBA Express program.  This program started on January 1st, and will run through the fiscal year’s end.

73 percent of all SBA loans that go to veterans are $350,000 and below.

The SBA Express Loan Program, which supports loans below $350,000, is SBA’s most popular method of loan distribution, with almost 60 percent of all 7(a) loans getting approved through the system over the past decade. It has also been one of the most common delivery methods for bringing working capital into the hands of veterans throughout the U.S., since the program’s inception.

This policy announcement means that veteran applying for a loan under the SBA Express program will no longer have to pay an upfront fee on any loan up to $350,000. This will make veteran military loans cheaper, and is another way that the SBA aims to support the military veteran, small business owners as they try different ways to access working capital, they need.

Through government contracts, SBA provides military veterans with access to business advice and training, funding and business development opportunities. SBA funded $1.86 billion in loans to 3,094 veteran-owned small businesses during the financial year of 2013. Also, the dollar amount of SBA’s lending support to veteran-owned companies has almost doubled since 2009.

Most veterans plan to start a business after spending their time in the military.

Military veterans owners form part of 7.5 percent of U.S. companies, today. Just like any other small business owner, there are times when these entrepreneurs need money. Whether it’s to buy equipment, expand their business, or finance a new project. And like civilians, many veterans are pursuing a business loan that will help them expand their business without forcing them to take on additional debt. A loan from the SBA VA program could be the solution that these business owners need.

SBA Veterans Have an Advantage

The SBA Veterans Advantage loan program guarantees great loans to veterans, with lower initial costs. This means that the normal 3 percent premium on loans over $160,000 will be lowered to 0 percent, previously the exact discount varies from one year to the next. Also, vets were charged 50 percent of whatever assurance charges, non-veterans received during the fiscal years of 2017 to 2018.

Traditionally, the system extended near the end of every fiscal year. Since the end of the 2018 fiscal year, we have not been able to find any info relating to the continuation of the programme. Before we learn otherwise, we could conclude that this service has ended.

Veterans Businesses Fund

The exciting newly formed Veterans Business Fund (VBF) has been busy with many stories from the previous few years. In principle, the fund accepts donations for the establishment of a veterans loan program. VBF can offer loans, which are fully funded, to veterans with as low an interest rate as they could legally offer. Such loans are to augment personal capital and help veteran business owners access bigger loans backed by the SBA.

However this idea for SBA Loans for Veterans has never left the ground and the website states that they are still busy with the fundraising process, and are hoping to accept more loan applications soon — but the website hasn’t been updated since 2012!