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The U.S. Small Business Administration (SBA) offers the Veterans Advantage program, which supports U.S. companies that are majority-owned (51% or more) by a veteran, active duty service member or military spouse or widow.
These loans are a subcategory of the SBA 7(a) loan program, which allows small businesses to borrow for a number of reasons, including working capital, commercial real estate and more.
Learn more about the Veterans Advantage program, including current SBA loan rates for veterans.
Page written by Kat Cox. Last reviewed on August 12, 2024. Next review due October 1, 2027.
Under the SBA Veterans Advantage program, loan rates are tied to the prime rate, just as with other SBA 7(a) loan programs. The prime rate is the average rate of interest at which the majority of U.S. banks lend at a given point in time, which can change. While each lender can determine their own rate in addition to the prime rate, the SBA sets a cap on how much they can charge.
The SBA allows lenders, including banks, credit unions and other financial institutions, to add anywhere from 2.25 – 8% to Veterans Advantage loans, depending on the loan type, its maturity age and how much the loan is worth. The program offers both fixed- and variable-rate loans.
| Loan amount | Maturity | Interest rate |
|---|---|---|
| $0 - $25,000 | Under 7 years | Prime rate + 4.25% |
| $0 - $25,000 | Over 7 years | Prime rate + 4.75% |
| $25,001 - $50,000 | Under 7 years | Prime rate + 3.25% |
| $25,001 - $50,000 | Over 7 years | Prime rate + 3.75% |
| $50,001+ | Under 7 years | Prime rate + 2.25% |
| $50,001+ | Over 7 years | Prime rate + 2.75% |
| Loan amount | Interest rate |
|---|---|
| $0 - $25,000 | Prime rate + 8% |
| $25,001 - $50,000 | Prime rate + 7% |
| $50,001 - $250,000 | Prime rate + 6% |
| $250,000+ | Prime rate + 5% |
The SBA Veterans Advantage program is a loan type under the SBA 7(a) loan program. It’s intended for small businesses that are majority-owned (meaning 51% or more) by veterans, active duty service members or military spouses or widows. As with any SBA 7(a) loan, loans can be up to $5 million with repayment terms around 10 years or 25 years for real estate loans. Most loans under the Veterans Advantage program average $350,000, but your loan amount will depend on what you need the funds for and what type of business you run.
Veteran-owned businesses can use the loans for a number of business purposes including:
In order to qualify for the Veterans Advantage program, the small business owner must meet the regular requirements of the SBA 7(a) loan program, including:
To qualify specifically for relief under the veteran programs at the SBA, the business owner must be 51% owned and controlled by:
The main benefit of the Veterans Advantage program is that it’s made specifically for veterans, which makes it somewhat less competitive than other SBA programs, which are open to any small business owners in the U.S. that meet the SBA’s qualifications.
Another benefit is lowered fees. Unlike regular 7(a) loans, loans offered through the Veterans Advantage program boast lower fees. For Veterans Advantage loans under $150,000, there’s no guarantee or service fee. Loans under $350,000 also don’t have a guarantee fee, but they do include ongoing service fees. Guarantee fees can range anywhere from 0% – 3.5%, and the service fee is usually 0.5%, depending on how much the borrower takes out.
If you’re a veteran who is interested in applying for a Veterans Advantage loan under the SBA or are looking for financing for your business, Swoop can help. Download our app today, answer a few questions and start getting recommendations on what the best financing options are available for your business.
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