Reviewed by
When veteran business owners approach me, they are often looking for dedicated financing. Many are surprised to learn that specialized loan options don't exist for veteran business owners.
Even so, there are 1.6 million veteran-owned small businesses in the U.S., and within that network there's plenty of support available to you. You just need to know where to look.
I'm Bryan Gerson, co-founder of Clarify Capital, and I've spent my career working with small to midsize business owners. I've helped plenty of veteran business owners find the right financing, and below I'll get into the honest version of what's available. We'll cover the financing options, the resources that can help you prepare, and what lenders consider.
| Financing type | Borrow up to | Rates and fees | Repayment terms | Speed to financing |
|---|---|---|---|---|
| Short-term business loan | $10,000 to $5 million | From 6% APR | 6 to 36 months | As fast as same day |
| Business line of credit | Up to $5 million | From 6% APR | Revolving, 6 to 36 months | As fast as same day |
| Equipment financing | Up to 100% of equipment value | From 6% APR | 12 to 72 months | 1 to 5 days |
| Merchant cash advance | Up to $5 million | Factor rate 1.08 to 1.45 | No fixed term; repaid from a share of sales | As fast as same day |
| Invoice factoring | Up to 100% of invoice value | 0.5% to 5% per invoice, per month | Tied to when your customer pays | 1 to 2 weeks |
| Home equity line of credit (HELOC) | Up to $750,000 | As low as the prime rate | Up to 30 years, with a draw period up to 5 years | As fast as one week |
| SBA loan | Up to $5 million | Set by the lender, within SBA caps | 10 to 25 years | As fast as two weeks, typically 30 to 90 days |
| SBA Express loan | Up to $500,000 | Lender-set rate; $0 up-front SBA fee for veterans | Up to 10 years | Often faster than a standard 7(a) loan |
| Military Reservist Economic Injury Disaster Loans (MREIDL) | Up to $2 million | Fixed rate, no higher than 4% | Up to 30 years | Varies; the SBA reviews each application |
Where Veteran Status Helps
Veteran status can help you lower your up-front cost, and it can also open doors to federal contracting opportunities.
Here are a few benefits that you may qualify for as a veteran small business owner from the U.S. Small Business Administration (SBA):
SBA Express fee waiver
Waives the SBA guarantee fee on SBA Express loans. These are SBA loans up to $500,000.
Veteran-owned small business (VOSB) certification
This SBA certification program, part of VetCert, gives you access to special set-aside and sole-source contracts.
Service-disabled veteran-owned small business (SDVOSB) certification
Specifically for service-disabled veterans, this VetCert program lets you compete for set-aside and sole-source contracts across federal agencies.
Military Reservist Economic Injury Disaster Loan (MREIDL)
Loans that cover your operating expenses when an essential employee is called to active duty. Borrow up to $2 million.
Support for Veteran Business Owners
For veteran entrepreneurs, there are free counseling and training programs available. Here are a few that I share with my clients:
Veterans Business Outreach Centers (VBOCs). Established by the SBA, these 31 veteran organizations throughout the country provide assistance to transitioning veterans who have expressed interest in establishing a small business.
Boots to Business. These are education and training programs available for service members and military spouses.
SCORE mentors. SCORE mentors give free advice on financing and business planning to service members and veterans.
V-WISE. Offers entrepreneurship training to women veterans, service members, and military spouses.
Warrior Rising. Offers coaching and mentorship to military entrepreneurs and their family members.
SBA's veteran business development officers. These officers are familiar with the local programs available to veterans and can provide targeted support.
Financing Options for Small Businesses Owned By Veterans
Veteran business owners face the same day-to-day pressures as any small or midsize business (SMB) owner, such as reaching new customers, growing sales, and hiring qualified staff.
Financing can help with many of these challenges. Here are the options available to you through Clarify Capital:
Short-Term Business Loans
A short-term business loan is a lump sum with fixed repayment terms. Borrow up to $5 million with APRs starting at 6%. Repayment terms run from six to 36 months.
Equipment Financing
You can use equipment financing to buy vehicles and other equipment to support your small business. The equipment secures the loan as collateral. Finance up to 100% of its value, with repayment terms from 12 to 72 months. APRs start at 6%.
SBA Loans
The SBA partially guarantees these loans. Borrow up to $5 million with terms from 10 to 25 years. Approval can happen as quickly as two weeks but typically takes 30 to 90 days.
Business Lines of Credit
A business line of credit gives you a revolving credit limit you draw against. Pay interest only on what you use. Lines go up to $5 million on six- to 36-month revolving terms. APRs start at 6%. Business lines of credit are a working capital tool you can use to cover expenses like payroll and marketing.
Invoice Factoring
Invoice factoring turns your accounts receivable into quick cash. You receive up to 100% of the value of the invoice, with fees from 0.5% to 5% per invoice per month.
Merchant Cash Advances
A merchant cash advance allows you to advance money against your future sales. Advances reach $5 million and are priced by a factor rate from 1.08 to 1.45. These are some of the fastest options on this list, but they're also some of the most expensive.
Home Equity Line of Credit
A home equity line of credit (HELOC) is a revolving credit line secured by your home. The biggest difference between a HELOC and the other financing options is that lenders underwrite HELOCs based on your personal finances, though it can be used to cover business expenses.
HELOCs use equity in your home rather than the business. This means if you can't pay back the loan, you're putting your home at risk. Lines run up to $750,000.
