The Small Business Administration guarantees loan products for small businesses in hopes that lenders are able to be more flexible and provide better terms for business owners. As a way of honoring small business owners who are veterans of the armed services, they go even further with the Veteran Advantage Program.
The SBA Veterans Advantage Program
The Small Business Administration has a program in place designed to assist veterans of the U.S. armed forces in acquiring capital to start, grow, or succeed in their business endeavors. The Veterans Advantage Program was established to support veterans, who play a large role in stimulating economic growth in local communities. In an effort to encourage lending to veterans with small businesses, the SBA provides reductions for some loan program fees.
In addition to the reduced fees, the small business administration offers counseling and online training courses aimed at making veterans lender ready. The SBA does this in line with its singular goal of reducing barriers for veteran business owners so that they may have access to more capital and create more jobs. The Veterans Advantage Program extends to any business that is at least 51% owned and controlled by an individual or individuals who meet the following criteria:
Honorably Discharged Veteran(s)
Active Reservist and/or Active National Guard Member
Active Duty Military service members who qualify for the Transition Assistance Program
Current Spouse of any veteran, active duty service member, reservist, or national guard member
Widowed spouse of a service member who died while in service, or as a result of a service-related disability
Benefits of the Veterans Advantage Program
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 more information, feel free to reach out to one of our SBA loan specialists today!