Does SBA give veteran-owned businesses priority on loans?
Short answer
Yes, on loans SBA processes itself. SOP 50 10 8.1 says SBA will prioritize non-delegated applications from veteran-owned businesses. For delegated loans, including all SBA Express loans, SBA only encourages lenders to give special consideration (Sec. B and Sec. C introductions; 13 CFR 120.105).
Yes, on applications SBA processes itself. SOP 50 10 8.1 says SBA will prioritize processing applications from veteran-owned businesses when those loans go through non-delegated procedures (Sec. B, p. 116; Sec. C, p. 217).
Delegated loans are different
For loans processed under delegated procedures, SBA only encourages lenders to give special consideration to veterans. SBA Express loans are processed only through the lender's delegated authority (Sec. B, Ch. 2, Para. C.1.b). So SBA's processing priority does not reach them. Export Express works the same way.
What the regulation says
13 CFR 120.105 says SBA will give special consideration to a small business owned by a veteran. If the veteran chooses not to apply, a business owned or controlled by one of the veteran's dependents can receive it. The rule says SBA will process the application promptly, resolve close questions in the applicant's favor and pay particular attention to maximum loan maturity.
What it does not do
Neither source sets a separate credit standard for veterans. Eligibility rules and the lender's credit analysis still apply. The regulation defines a veteran as a person honorably discharged from active military service. The SOP's definition in Appendix 3 is broader, covering discharge under conditions other than dishonorable.
Ask a delegated lender how it applies SBA's encouragement. Practice varies by lender.
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