Does the VA give business loans?
No. VA’s Office of Small and Disadvantaged Business Utilization works to increase participation of veteran-owned small businesses in VA procurement and points owners toward its Veteran Entrepreneur Portal, business readiness training and small business liaisons. Its pages describe contracting support and training, not lending.
VA’s Veteran Readiness and Employment program has a self-employment track for veterans who have a service-connected disability with an employment barrier and who are enrolled in the program. VA describes it as help with a business plan, analysis of the concept, and training in operations, marketing and finance. VA also notes that VetCert, the certification for veteran-owned firms that want to work with VA, is run by SBA. For the money itself, veterans apply to SBA lenders or private lenders.
What SBA offers veterans in fiscal year 2027
SBA does not lend directly through the 7(a) program; it guarantees part of loans made by approved lenders, which lowers the lender’s risk. The veteran benefit is a fee benefit. SBA Information Notice 5000-881797, effective October 1, 2026 for loans approved through September 30, 2027, sets the upfront guaranty fee at $0 for all SBA Express loans to businesses owned and controlled by a veteran or the spouse of a veteran, citing section 7(a)(31)(G) of the Small Business Act.
The same notice lists its fee exceptions: Express loans to veteran-owned businesses, export and working capital program loans, and a 0 percent fee on loans of $700,000 or less to manufacturers, certain food supply chain businesses and rural businesses. It contains no separate reduction for veteran-owned standard 7(a) loans. Some lender websites still describe a broader Veterans Advantage discount; for FY 2027 the notice is the rule to rely on.
| Loan amount | Standard 7(a) upfront fee | SBA Express to veteran-owned business |
|---|---|---|
| $150,000 or less | 2% of the guaranteed portion | $0 |
| $150,001 to $500,000 | 3% of the guaranteed portion | $0 |
| $500,001 to $700,000 | 3% of the guaranteed portion | Above the Express limit |
| $700,001 to $5,000,000 | 3.5% of the guaranteed portion up to $1 million, 3.75% above | Above the Express limit |
Who qualifies for the Express fee waiver
SOP 50 10 8.1 lists the eligible owners. The waiver applies to businesses owned and controlled by a veteran (other than one who received a dishonorable or bad conduct discharge), a service-disabled veteran, an active-duty service member participating in the military’s Transition Assistance Program, or the spouse of a veteran or active-duty member. The widowed spouse of a service member who died in service or of a service-connected disability also qualifies.
The lender has to document that eligibility in its file, so expect to provide a DD-214 or equivalent proof of service and the ownership documents that show control. SBA also says it will prioritize processing applications from veteran-owned businesses when SBA itself processes the loan, and it encourages delegated lenders to give veterans special consideration.
SBA Express versus a standard 7(a) loan
SBA Express loans are capped at $500,000 and carry a 50 percent SBA guarantee. Express lenders decide the credit themselves under delegated authority, which is why the process can be faster. A 7(a) Small loan goes up to $350,000 with an 85 percent guarantee up to $150,000 and 75 percent above. A Standard 7(a) loan covers $350,001 to $5 million.
The lower Express guarantee means the lender keeps more risk, so ask each lender whether it offers Express at all. If you qualify for both, compare total cost: the fee waiver helps, but a lower rate or a longer term on a standard loan can matter more over ten years.
| Option | Maximum amount | SBA guarantee | FY 2027 fee for a veteran-owned business |
|---|---|---|---|
| SBA Express | $500,000 | 50% | $0 upfront |
| 7(a) Small | $350,000 | 85% up to $150,000; 75% above | Standard schedule |
| Standard 7(a) | $5 million | 75% above $150,000 | Standard schedule |
Worked example: what the fee waiver is worth
Hypothetical, not an offer. A veteran-owned HVAC contractor borrows $347,900 for two service vans, tools and working capital. At an assumed 11.25 percent over 120 months, the payment is $4,841.69 a month, $58,100.25 a year, with $233,102.52 of interest over the term. The rate and term are the same in both versions below; only the fee changes.
As a 7(a) Small loan with a 75 percent guarantee, the guaranteed portion is $260,925 and the FY 2027 upfront fee at 3 percent is $7,827.75. As an SBA Express loan to a veteran-owned business, the upfront fee is $0. The waiver saves $7,827.75, which is about 1.6 months of payments. For a loan of $150,000 or less, the standard fee is 2 percent of the guaranteed portion, so the saving is smaller.
The waiver does not change underwriting. For a 7(a) Small loan used for purposes other than buying a business, SBA requires debt service coverage of at least 1.10. With no other debt, the contractor needs about $63,910 of annual EBITDA to cover $58,100.25 of payments at that ratio.
| Item | 7(a) Small | SBA Express, veteran-owned |
|---|---|---|
| Monthly payment | $4,841.69 | $4,841.69 |
| Guaranteed portion | $260,925 (75%) | $173,950 (50%) |
| FY 2027 upfront fee | $7,827.75 | $0 |
| Total interest over 10 years | $233,102.52 | $233,102.52 |
Rules that apply to every SBA loan, veteran or not
Any owner of 20 percent or more must sign an unlimited personal guarantee. The lender must explain why credit is not available elsewhere on reasonable terms and must review the personal credit reports of owners and guarantors. Variable-rate loans are capped at the base rate plus 6.5 percent for $50,000 or less, plus 6 percent up to $250,000, plus 4.5 percent up to $350,000, and plus 3 percent above that.
Collateral is not required on 7(a) loans of $50,000 or less, and SBA says lenders should not decline larger loans solely for inadequate collateral. Maturities for equipment and working capital are generally 10 years or less, and real estate can run up to 25 years.
| Product | Amount to discuss | Time to fund | Pricing structure | Eligibility review |
|---|---|---|---|---|
| SBA loan | Program-specific; 7(a) maximum $5 million | Provider-dependent; confirm availability of funds | Lender-negotiated interest subject to applicable SBA program limits; fees may apply | Operating-history requirements vary by provider; Ask which personal and business credit checks apply |
| Equipment financing | Provider-specific; size to repayment capacity | Provider-dependent; confirm availability of funds | Loan interest or lease payments; compare deposit, fees and ownership terms | Operating-history requirements vary by provider; Ask which personal and business credit checks apply |
| Business term loan | Provider-specific; size to repayment capacity | Provider-dependent; confirm availability of funds | Quoted interest and fees; compare net proceeds and total repayment | Operating-history requirements vary by provider; Ask which personal and business credit checks apply |
| Business line of credit | Provider-specific; size to repayment capacity | Provider-dependent; confirm availability of funds | Interest or installment fees by provider; check draw and maintenance charges | Operating-history requirements vary by provider; Ask which personal and business credit checks apply |
If an essential employee is called to active duty
SBA’s Office of Veterans Business Development points Reserve and National Guard members to the Military Reservist Economic Injury Disaster Loan. It is a disaster-style loan meant to help a small business keep paying ordinary operating expenses while an essential employee is away on active duty, not to fund growth. Amounts, the rate and the filing window are set by SBA’s disaster loan office, so confirm them on SBA’s current program page before you plan around it. Owners who are themselves deploying should also ask their lender about payment options before they leave.
Free training and counseling from SBA
SBA’s Office of Veterans Business Development serves veterans, service members, Guard and Reserve members and military spouses. Boots to Business is taught on military installations as part of the Transition Assistance Program. Boots to Business Reboot brings the same course to veterans of any era in their communities, and Revenue Readiness is a six-week online program for turning an idea into a working model.
Veterans Business Outreach Centers operate nationwide and offer business plan workshops, concept assessments, mentoring and training. OVBD also lists programs for women veterans, service-disabled veteran entrepreneurs, and the Veteran Institute for Procurement for firms pursuing government work. A counselor can review your projections before a lender sees them, which is often the fastest way to fix a weak application.
VetCert and federal contracting
Since January 1, 2023, SBA rather than VA certifies veteran-owned small businesses (VOSBs) and service-disabled veteran-owned small businesses (SDVOSBs). A business must be at least 51 percent owned and controlled by one or more veterans; for SDVOSB status those owners need a VA service-connected disability rating. The government aims to award at least 5 percent of federal contracting dollars to SDVOSBs each year. Certification opens set-aside and sole-source contracts, and a signed government contract can later support financing such as invoice factoring.