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Veterans with an entrepreneurial spirit may have an advantage over others seeking to build a new business. The skills that make a military operation successful are the same as those needed to build a solid business. Creating an enterprise from scratch takes discipline, leadership, and decisive action. It also takes money. Fortunately, there are many funding options available to help veterans realize their entrepreneurial dreams.

Traditional Small Business Loans

Veterans starting a new business or growing an established one may first look to their local bank for financing. What it takes to qualify for a traditional small business loan varies by institution. But most banks require a good credit score, a low debt-to-income ratio, established credit with a solid payment record, and collateral.

Yet there is a chance, that even if you meet all of those requirements, your local bank still may not offer extend credit to your business. Fortunately, there are alternatives.

Small Business Administration

The Small Business Administration (SBA) offers counseling, capital, and contracting expertise to start-ups and small businesses, and it has specific programs to help veteran entrepreneurs. There are specific loan programs to help launch veteran-owned businesses, as well as finance established ones.

The SBA's Office of Veterans Business Development (OVBD) works exclusively with veteran entrepreneurs and provides both training and financing assistance. Lending programs include Lender Match and the Military Reservist Economic Injury Disaster Loan Program (MREIDL).

Lender Match is a free online tool to help veterans connect with small Community Development banks and other local lenders. Veterans should include a business plan in their loan applications and be prepared to offer collateral, if necessary. MREIDL helps businesses arrange low-cost loans when they temporarily lose an essential employee called up as a military reservist.

Veterans Advantage Loans

SBA loan guarantees can help veterans start, grow, or maintain a business. To qualify, a business must be at least 51 percent owned by an honorably discharged veteran. That veteran must also be involved in the regular operations of the business. Others who qualify for Veterans Advantage Loans include:

  • Active duty servicemembers eligible for the Transition Assistance Program
  • Active Reservists and Guard Members
  • Spouses of veterans, active duty servicemembers, members of the Guard and Reserves, and widowed spouses of those who died as a result of military service

Veterans may have to pay a guaranty fee on loans above a certain dollar amount. But, generally, no guaranty fee is charged on small loans.

Grants Available for Veterans

Grants can provide capital to business owners to help with start-up and ongoing costs. And while there are some grants available only to veteran-owned businesses, that does not preclude you from applying for grants generally available to any business. Examples include:

  • Small Business Innovation Research (SBIR) - available to businesses under 500 employees engaged in technological innovation
  • Small Business Technology Transfer (STTR) - awarded to businesses that partner with nonprofit research institutions
  • National Association for the Self Employed (NASE) Growth Grants - available to micro-businesses
  • Self-Employed Grants for Service-Disabled Veterans - mostly awarded to start-ups, these were created to help service-disabled veterans become self-employed

There are also a number of online resources that can help you find alternative financing solutions. You can look for opportunities specific to your veteran status, industry, location, or type of desired financing.


StreetShares is a peer-to-peer lending platform for veterans. The nonprofit StreetShares Foundation provides several funding options for start-ups and established businesses including term loans, grants, and lines of credit.

Hivers and Strivers

Hivers and Strivers is an angel investment group that supports start-ups founded and run by graduates of the U.S. service academies.

In addition to providing capital, Hivers and Strivers investors take an active role in the management of their portfolio companies. They provide guidance and oversight and act as mentors and counselors to founders and management.

Some of the characteristics Hivers and Strivers looks for when considering investment are:

  • Companies led by veterans
  • Early-stage (beyond concept) start-ups
  • Not reliant on government contracts
  • Tangible valuation
  • Significant growth opportunity
  • Clean capitalization table


Veterans interested in becoming franchise owners can look to VetFran for a two-fold approach. VetFran helps educate veterans about various franchise opportunities and can match them up with different franchisors.

VetFran negotiates franchise fee discounts on behalf of the veterans who use their service. They offer promotional opportunities for established franchisees and foster connections between mentors and new franchisees. The also provide users a list of potential funding sources.

Veterans Business Fund

This nonprofit program offers loans with favorable terms to veterans to help them secure the necessary equity to qualify for a bank loan. Veterans Business Fund requires business owners to provide 50 percent of the necessary equity. The VBF loan will provide the other 50 percent.

Veterans need to apply for a bank loan first to learn their equity requirement, then they can apply for a VBF loan. Applicants may be asked to provide a business plan, past tax returns, and a personal financial statement, among other documents.

Private Funding Alternatives

Other forms of financing may be available to veterans depending on the type of business they have. Some of these include business incubators, angel investors, venture capitalists, and your own family and friends.

There are veteran-specific business incubators that can help you launch your new businesses. Incubators provide services like business education, management training, and networking opportunities. Some can help you arrange financing. Others provide help creating business plans, sales and marketing plans, and financial forecasts. Some offer no- or low-cost manufacturing facilities or office space.

Angel investors are typically wealthy individuals who can invest small amounts in promising businesses. Venture capitalists are generally big institutions that invest very large amounts in established private companies on track to becoming publicly traded.

Friends and family are the most common source of initial business funding. Still, most people involved in such transactions are well served by consulting with both tax and legal advisors.

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