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What Is the Veterans Advantage Program?
The Veterans Advantage program supports small businesses that are at least 51% owned by a veteran, active duty service member, or a military spouse or widow.
The Veterans Advantage program is a permanent SBA 7(a) program. It supports small businesses that are at least 51% owned by a veteran or Active Duty service member, or by their spouse or widow.
Certain details of the program change year to year, but the benefits are always geared toward giving veteran-owned small businesses a financial advantage.
Financing Terms
The financing terms for SBA 7(a) Veterans Advantage loans are the same as a standard 7(a) loan in many respects. For example, loans may be up to $5 million, and they can have terms of between 10 and 25 years (the latter only if real estate is involved).
There's one major difference compared to a standard SBA 7(a) loan: the fees. Some Veterans Advantage loans have no upfront guaranty fees, and those that do offer a more palatable amount than the standard financing.
See our table below to get an idea of what guaranty fees are required upfront.
Loan Amount | Loan Type | Maturity | Upfront Guaranty Fee for Veteran-Owned Small Businesses |
|---|---|---|---|
$150,000 or less | SBA Express Loans | Any | 0% |
$150,000 or less | 7(a) Loans | Any | 0% |
$150,001 to $500,000 | 7(a) Loans | <12 months | 0.125% of the guaranteed portion |
$150,001 to $500,000 | 7(a) Loans | >12 months | 1.5% of the guaranteed portion |
$500,001 to $5 million | 7(a) Loans | <12 months | 0.25% of the guaranteed portion |
$500,001 to $5 million | 7(a) Loans | >12 months | Variable (see below) |
For 7(a) loans with a maturity that exceeds 12 months:
$500,001 to $700,000: 3% of the guaranteed portion
$700,001 to $5 million: 3.5% of the guaranteed portion up to $1 million, plus 3.75% of the guaranteed portion over $1 million.
Case Study: Scott's Fitness Center
Scott, a U.S. Army veteran, and his wife Jenny had a dream of opening a state-of-the-art fitness center in Rochester, New York. They wanted to create a space that offered cutting-edge equipment, group classes, and personalized training for their community. Scott's military background instilled in him the importance of physical fitness and discipline, and he was eager to share his passion with others.
Together, they developed a solid business plan and started searching for financing options to bring their vision to life. While searching for the right financing package, they learned about the SBA 7(a) Veterans Advantage program. The program caught their attention because it was specifically designed to support small businesses owned by veterans and their spouses.
Scott and Jenny saw that the Veterans Advantage program offered similar financing terms as the standard SBA 7(a) loan. What set the program apart, however, was the potential for reduced upfront guaranty fees, making it a more attractive option for their needs.
They approached a bank experienced in SBA lending and presented their business plan. Impressed by Scott's military service and their well-prepared proposal, the bank approved a $1.2 million Veterans Advantage SBA 7(a) loan for the fitness center. The loan not only helped them secure the necessary funding but also saved them on upfront costs, thanks to the reduced fees associated with the program.
With the financial support provided by the SBA 7(a) loan, Scott and Jenny successfully opened their fitness center, offering top-notch facilities and services to their community. The loan enabled them to turn their passion for fitness and wellbeing into a thriving business, all while benefiting from the advantages designed for veterans like Scott.
This is a fictional case study provided for illustrative purposes.
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Related Questions
What is the Veterans Advantage Program?
The Veterans Advantage Program is a loan program offered by the Small Business Administration (SBA) that provides reduced fees for veterans and small business owners. Eligibility requirements state that the business must be 51% owned by honorably discharged veterans, active-duty military service members, active reservists, and/or National Guard members; or the spouse of someone in any of the aforementioned groups. This loan can also be extended to the widowed spouse of a service member who died while in service.
Benefits of the Veterans Advantage Program include:
- Loans of up to $150,000: the upfront guaranty fee is zero.
- SBA Express Loans: Upfront guaranty fee is zero.
- Non-SBA Express Loans: Upfront guaranty fee for loans between $150,001 and $500,000 to veteran-owned small businesses will be 50% less than the upfront guaranty fee for non-veteran owned small businesses as follows:
- For loans with a maturity of over 12 months, the fee will be 1.5% of the guaranteed portion; and
- For loans with a maturity of fewer than 12 months, the fee will be 0.125% of the guaranteed portion.
- Loans of $500,001 up to and including $5,000,000: The upfront guaranty fees for 7(a) loans for veteran-owned small businesses will depend on the loan amount and the maturity of the loan as follows:
- For loans with a maturity of over 12 months, the applicable guaranty fees are:
- Loans of $500,001 to $700,000: 3% of the guaranteed portion;
- Loans of $700,001 to $5,000,000: 3.5% of the guaranteed portion up to $1,000,000 plus 3.75% of the guaranteed portion over $1,000,000.
- For loans with a maturity of no greater than 12 months, the guaranty fee is 0.25% of the guaranteed portion.
- For loans with a maturity of over 12 months, the applicable guaranty fees are:
For more information, feel free to reach out to one of our SBA loan specialists today!
How does the Veterans Advantage Program help small businesses?
The Veterans Advantage Program helps small businesses by providing them with access to SBA Express loans. These loans are designed to provide veterans with access to capital quickly and easily. The SBA Express loan program offers veterans up to $350,000 in financing with terms up to 7 years. The program also offers a streamlined application process and reduced paperwork requirements. Additionally, the program offers a reduced interest rate and a longer repayment period than traditional loans.
For more information on the Veterans Advantage Program, please visit the SBA Express Loans for Veterans page.
What are the eligibility requirements for the Veterans Advantage Program?
In order to qualify for the SBA Veterans Advantage program, your business must be 51% owned by an eligible veteran. For the purposes of the program, eligible veterans include:
- Veterans (except for those who have been dishonorably discharged)
- Active duty service members enrolled in the Transition Assistance Program (TAP)
- Current spouse of a veteran, active duty service member, reservist, or member of the National Guard
- Widowed spouses of veterans or service members who died during service or as a result of service-related disabilities
Source: SBA Express Loans for Veterans and SBA 7a Loans Small Business Blog
What types of financing are available through the Veterans Advantage Program?
The Veterans Advantage Program offers SBA 7(a) VA loans of up to $5,000,000 with reduced fees. Until September 30, 2018, SBA 7(a) VA loans of up to $125,000 have no fees and an 85% guarantee; loans from $125,000 to $150,000 have a 1% guarantee fee, and loans from $150,000 to $350,000 have a 1.5% guarantee fee, loans from $350,001 to $700,000 have a 3% guarantee fee, loans from $700,001 to $5,000,000 have a 3.5% guarantee fee for the amount of the loan up to $1,000,000, and a 3.75% guaranteed fee for the amount of the loan over $1,000,000. Source
How can I apply for the Veterans Advantage Program?
You can apply for the Veterans Advantage Program by submitting an application to the Small Business Administration (SBA). The application process includes submitting a business plan, financial statements, and other documents. Once your application is approved, you will be eligible for the SBA Express Loan Program, which offers up to $350,000 in financing for veterans. The loan terms vary depending on the size of the loan and the purpose of the loan, but typically include a fixed interest rate, a repayment term of up to 25 years, and no collateral required.
For more information on the SBA Express Loan Program, please visit https://www.sba.gov/funding-programs/loans/sba-express-loans.