WASHINGTON — Today, on the first day of National Veterans Small Business Week, the U.S. Small Business Administration (SBA) announced a major policy reform designed to make it easier for military veterans to buy a small business. Beginning this Veterans Day, the SBA is implementing new flexibility for veteran entrepreneurs who are acquiring existing small businesses through the 7(a) Loan Program, allowing them to raise their required 10% down payment from permitted outside sources. The reform recognizes veterans’ service to the country and will remain in place through Fiscal Year 2027 (FY27). It will give veteran entrepreneurs greater flexibility to secure financing and an easier onramp to entrepreneurship.
"As we worked to modernize our lending programs, we saw a clear opportunity to both empower veteran entrepreneurs and to address the Silver Tsunami,” said SBA Administrator Kelly Loeffler. “With today’s policy update, the SBA is empowering veterans to acquire an existing business by modifying the requirements of the 7(a) Loan Program. By providing veteran buyers greater flexibility to meet the equity requirements, we are opening up more pathways to entrepreneurship for proven leaders and problem solvers – and our next generation of Main Street job creators.”
SBA’s 7(a) Loan Program requires buyers acquiring an existing business to provide an equity contribution equal to at least 10% of total project costs. Previously, certain outside funding sources—including seller standby notes, investor capital, and external equity contributions—could provide no more than half of that contribution. Under the new policy, eligible veteran buyers can raise the full required amount from permitted outside sources, giving them greater flexibility to finance an acquisition without being solely reliant on personal savings.
The policy adjustment addresses a critical bottleneck in the business transition market. According to SBA’s Office of Advocacy, 51% of owners of businesses with employees are age 55 or older, underscoring the importance of preparing the next generation of business owners. SBA’s rule change equips veteran buyers to step in and acquire established businesses with greater flexibility to finance the required equity contribution.
Key benefits of the policy update include:
- 100% Capital Structuring Flexibility: Veterans can fulfill the total 10% acquisition equity requirement through permitted outside funding sources.
- Preservation of Personal Wealth: In recognition of their service to our nation, veterans may retain their personal savings and liquidity to support post-acquisition operations rather than locking it into initial transaction equity.
- Accelerated Veteran Business Ownership: The reform allows veteran buyers to leverage the leadership experience gained serving in the military and improves their competitive position to acquire Main Street enterprises.
This reform expands upon the Trump SBA's broader agenda to support veteran-owned businesses, strengthen the defense industrial base, and enhance our core lending programs to meet the needs of modern businesses. For more information on SBA programs and resources for veteran entrepreneurs, visit www.sba.gov/veterans.
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About the U.S. Small Business Administration
The U.S. Small Business Administration helps power the American dream of entrepreneurship. As the leading voice for small businesses within the federal government, the SBA empowers job creators with the resources and support they need to start, grow, and expand their businesses or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.