SBA Veterans Assistance Programs:
An Analysis of Contemporary Issues
Updated July 7, 2021
Congressional Research Service
https://crsreports.congress.gov
R42695

SBA Veterans Assistance Programs: An Analysis of Contemporary Issues

Summary
Several federal agencies, including the Smal Business Administration (SBA), provide training
and other assistance to veterans seeking civilian employment. For example, the Department of
Defense (DOD), in cooperation with the SBA, Department of Labor, Department of Veterans
Affairs, and several other federal agencies, operates the Transition Goals Plans Success program
(Transition GPS), which provides employment information and entrepreneurship training to
exiting military servicemembers to assist them in transitioning from the military to the civilian
labor force.
In recent years, the unemployment rate among veterans as a whole has general y been similar to
or lower than the unemployment rate for nonveterans 18 years and older. However, veterans who
have left the military since September 2001 have experienced higher unemployment than other
veterans and, in some years, higher unemployment than nonveterans. As a result, Congress has
focused much of its attention on finding ways to assist veterans who have left the military since
September 2001.
The SBA provides management and technical assistance services to more than 100,000 veterans
each year through its various management and technical assistance training partners (e.g., Smal
Business Development Centers, Women’s Business Centers [WBCs], SCORE [formerly the
Service Corps of Retired Executives], and Veterans Business Outreach Centers [VBOCs]). The
SBA’s Office of Veterans Business Development (OVBD) also administers several programs to
assist veterans, including the Operation Boots to Business: From Service to Startup initiative,
which is part of DOD’s Transition GPS program.
The expansion of federal employment training programs targeted at specific populations, such as
women and veterans, has led some Members and organizations to ask if these programs should be
consolidated. In their view, eliminating program duplication among federal business assistance
programs across federal agencies, and within the SBA, would result in lower costs and improved
services. Others argue that keeping these business assistance programs separate enables them to
offer services that match the unique needs of various underserved populations, such as veterans.
In their view, instead of considering program consolidation as a policy option, the focus should be
on improving communication and cooperation among the federal agencies providing assistance to
entrepreneurs.
This report opens with an examination of the economic circumstances of veteran-owned
businesses. It then provides a brief overview of veterans’ employment experiences, comparing
unemployment and labor force participation rates for veterans, veterans who have left the military
since September 2001, and nonveterans. The report also describes employment assistance
programs offered by several federal agencies to assist veterans in their transition from the military
to the civilian labor force and examines, in greater detail, the SBA’s veteran business
development programs, the SBA’s efforts to assist veterans’ access to capital, and the SBA’s
service-disabled veteran-owned contracting program. It also discusses the SBA’s Military
Reservist Economic Injury Disaster Loan program and P.L. 114-38, the Veterans Entrepreneurship
Act of 2015, which authorized and made permanent, under specified circumstances, the SBA’s
recent practice of waiving the SBAExpress loan program’s one time, up-front loan guarantee fee
for veterans (and their spouses).
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SBA Veterans Assistance Programs: An Analysis of Contemporary Issues

SBA Assistance for Veterans
The Smal Business Administration (SBA) administers several programs to support smal
business owners and prospective entrepreneurs. For example, it provides management and
technical assistance training programs to assist with business formation and expansion; loan
guaranty programs to enhance smal business owners’ access to capital; and programs to increase
smal business opportunities in federal contracting, including oversight of the service-disabled
veteran-owned smal business federal procurement goaling program.1 The SBA also provides
direct loans for owners of businesses of al sizes, homeowners, and renters to assist their recovery
from natural disasters.
P.L. 93-237, to amend the Smal Business Act (1974), required the SBA to provide special
consideration to veterans in al of its programs. To meet this mandate, the SBA created the Office
of Veterans Business Development (OVBD) to administer programs specifical y designed to
assist veteran-owned smal businesses.2
As wil be discussed, the OVBD currently administers 22 Veteran Business Outreach Centers
(VBOCs), the Boots to Business and Boots to Business: Reboot initiatives, the Service-Disabled
Veteran Entrepreneurship Training Program (SDVETP), the Entrepreneurship Bootcamp for
Veterans with Disabilities (EBV) program, the Veteran Federal Procurement Entrepreneurship
Training Program (VFPETP), and the Women Veteran Entrepreneurship Training Program
(WVETP).3 These programs are available to active duty, National Guard, and Reserve
servicemembers and veteran or military spouses.4
In addition, the SBA’s management and technical assistance training resource partners (e.g.,
Smal Business Development Centers, Women’s Business Centers, and SCORE [formerly the
Service Corps of Retired Executives]) provide free training to smal business owners and

1 For further information and analysis concerning the Small Business Administration’s (SBA’s) entrepreneurial
education programs, see CRS Report R41352, Sm all Business Managem ent and Technica l Assistance Training
Program s, by Robert Jay Dilger. For further information and analysis concerning the SBA’s access to capital programs,
see CRS Report R41146, Sm all Business Adm inistration 7(a) Loan Guaranty Program , by Robert Jay Dilger, and CRS
Report R41184, Sm all Business Adm inistration 504/CDC Loan Guaranty Program , by Robert Jay Dilger.
2 Initially, the SBA’s Office of Field Services was assigned the responsibility to ensure the SBA met this statutory
requirement. In 1982, the SBA’s Office of Veterans Business Enterprise was created within the Office of the Chief
Counsel for Advocacy to address veteran needs. Soon thereafter, the office was shifted to the Office of the Associate
Deputy Director for Special Programs and renamed the Office of Veterans Affairs. In 1985, the Office of Veterans
Affairs was relocated to the SBA’s Office of Business Development. During the remainder of the 1980s and 19 90s, the
SBA regularly offered management and training conferences, seminars, workshops, and other meetings for veterans,
primarily through Veteran Affairs Officers (VAOs) located in its regional and district offices and through annual
agreements with SBA resource partners, including SCORE (formerly the Service Corps of Retired Executives) and
Small Business Development Centers. P.L. 106-50, the Veterans Entrepreneurship and Small Business Development
Act of 1999, directed the SBA to establish the Office of Veterans Business Development (OVBD) to be administered
by an Associate Administration that reports directly to the SBA Administrator. T he OVBD was established on January
12, 2001, replacing the SBA’s Office of Veterans Affairs. See U.S. Congress, House Committee on Veterans’ Affairs,
Subcommittee on Education, T raining and Employment, Oversight on the Sm all Business Loan Program for Veterans,
hearing, 98th Cong., 1st sess., March 23, 1983, Serial No. 98-6 (Washington: GPO, 1983), pp. 7, 37 -39, 103, 122; U.S.
Congress, Senate Committee on Small Business, Activities of the Sm all Business Adm inistration’s Office of Veterans
Affairs, hearing, 99th Cong., 1st sess., November 13, 1985, S. Hrg. 99-388 (Washington: GPO, 1986), pp. 22-47, 200,
340-363; and SBA, “ FY2002 Budget Request and Performance Plan,” pp. 67, 69 , no longer available online.
3 SBA, “FY2022 Congressional Justification and FY2020 Annual Performance Report,” pp. 13, 90-94, at
https://www.sba.gov/document/report -congressional-budget-justification-annual-performance-report (hereinafter SBA,
“FY2022 Congressional Justification and FY2020 Annual Performance Report”).
4 SBA, “FY2022 Congressional Justification and FY2020 Annual Performance Report,” p. 90.
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SBA Veterans Assistance Programs: An Analysis of Contemporary Issues

prospective entrepreneurs, including veterans. Overal , the SBA provides management and
technical assistance training to over 100,000 veterans annual y.5
Also, as wil be discussed, the SBAExpress loan program waives fees for veterans as a means to
enhance veterans’ access to capital. The SBA’s Military Reservist Economic Injury Disaster Loan
(MREIDL) program is also of interest to veterans; it provides direct loans of up to $2 mil ion to
smal business owners who are not able to obtain credit elsewhere to meet ordinary and necessary
operating expenses that they could have met but are not able to meet because an essential
employee (including the owner) has been cal ed up to active duty in his or her role as a military
reservist or member of the National Guard due to a period of military conflict.6
This report opens with an examination of veteran-owned businesses’ economic circumstances,
comparing unemployment and labor force participation rates for veterans, veterans who have left
the military since September 2001, and nonveterans. The report also describes employment
assistance programs offered by several federal agencies to assist veterans transitioning from the
military to the civilian labor force and examines, in greater detail, the SBA’s veteran business
development programs, the SBA’s efforts to enhance veterans’ access to capital, and the SBA’s
service-disabled veteran-owned contracting program.
An Economic Profile of Veteran-Owned Businesses
The Annual Business Survey (ABS) is conducted jointly by the U.S. Census Bureau and the
National Center for Science and Engineering Statistics within the National Science Foundation.
The ABS provides information on selected economic and demographic characteristics for
nonfarm employer businesses and business owners by gender, ethnicity, race, and veteran status.7
ABS data concerning veteran-owned businesses are provided below.
In addition, the Census Bureau’s annual Nonemployer Statistics by Demographic (NES-D) data
series uses existing administrative and census records to assign demographic characteristics,
including veteran status, to the approximately 25.3 mil ion nonemployer businesses in the United
States. About 1.42 mil ion nonemployer businesses in the United States are owned by veterans.8

5 SBA, “FY2020 Congressional Budget Justification and FY2018 Annual Performance Report,” pp. 95-100, at
https://www.sba.gov/sites/default/files/2019-04/
SBA%20FY%202020%20Congressional%20Justification_final%20508%20%204%2023%202019.pdf.
6 SBA, “Disaster Assistance Program: SOP 50-30-9,” May 31, 2018, p. 69, at https://www.sba.gov/document/sop-50-
30-9-disaster-assistance-program-posted-05-31; and 13 C.F.R. §123.508. For further information and analysis
concerning the SBA’s disaster assistance loan program, see CRS Report R41309, The SBA Disaster Loan Program:
Overview and Possible Issues for Congress, by Bruce R. Lindsay.
7 U.S. Bureau of the Census, “Annual Business Survey (ABS): About,” at https://www.census.gov/programs-surveys/
abs/about.html. T he ABS collected data electronically from approximately 850,000 employer businesses in 2017, and
approximately 300,000 employer businesses annually in years 2018 -2021. Businesses selected for the survey receive an
initial letter informing them of their requirement to complete the survey. T he sample is stratified by state, frame, and
industry and is systematically sampled within each stratum. It used a standard type of estimation for stratified
systematic sampling.
8 In 2017 (the latest available data), veteran-owned nonemployer businesses in the United States accounted for about
5.6% of all nonemployer businesses (1.42 million of 25.31 million). See Bureau of the Census, “ T able 1—Statistics for
Nonemployer Firms by Industry, Sex, Ethnicity, Race, and Vet eran Status for the U.S., States, and Metro Areas: 2017,”
at https://www2.census.gov/programs-surveys/abs/data/2017/nesd_estimates_2017_T able1.xlsx.
A nonemployer business has “ no paid employment or payroll, with annual receipts of $1,000 or more ($1 or more in
the construction industries), and filing tax forms for sole proprietorships (Form 1040, Schedule C), partnerships (Form
1065), or corporations (the Form 1120 series). T he vast majority of nonemployer businesses are sole proprietors.” See
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SBA Veterans Assistance Programs: An Analysis of Contemporary Issues

Demographics
The ABS estimates that in 2018 about 5.9% (337,934 of 5,722,142) of nonfarm employer
businesses in the United States were owned by veterans.9 Of these businesses
 95.6% were male-owned, 3.3% were female-owned, and 1.1% were owned
equal y by a male and a female.

Veteran-owned nonfarm employer businesses were more likely than other
nonfarm employer businesses in 2018 to be owned by a male. The comparable
national figures for 2018 are 63.5% were owned by a male (compared to 95.6%
for veterans), 20.8% were owned by a female (compared to 3.3% for veterans),
and 15.7% were owned equal y by a male and a female (compared to 1.1% for
veterans).10
 10.1% were minority-owned, 0.3% were equal y nonminority-owned and
minority-owned, and 89.6% were nonminority-owned.

Veteran-owned nonfarm employer businesses were more likely than other
nonfarm employer businesses to be nonminority-owned in 2018. The comparable
national figures for 2018 are 19.1% were minority-owned (compared to 10.1%
for veterans), 1.5% were equal y nonminority-owned and minority-owned
(compared to 0.3% for veterans), and 79.4% were nonminority-owned (compared
to 89.6% for veterans).11
In addition, in 2018, 99.8% (337,387) of veteran-owned nonfarm employer businesses had fewer
than 500 employees and 0.2% (547) had at least 500 employees. This ratio is similar to
comparable national figures for 2018, according to which 99.6% (5,701,995) of nonfarm
employer businesses had fewer than 500 employees and 0.4% (20,149) had at least 500
employees.12
Employment, Payroll, and Sales/Receipts
The ABS estimates that in 2018, veteran-owned nonfarm employer businesses
 employed nearly 3.9 mil ion persons (about 3.0% of total U.S. employment from
nonfarm employer businesses);

U.S. Census Bureau, Adela Luque, Michaela Dillion, Julia Manzella, James Noon, Kevin Rinz, and Victoria Udalova,
“Nonemployer Statistics by Demographics (NES-D): Exploring Longitudinal Consistency and Sub-national Estimates,”
December 2019, pp. 5, 6, at https://www.census.gov/library/working-papers/2019/adrm/ces-wp-19-34.html (hereinafter
Adela Luque et al., NES-D).
9 U.S. Bureau of the Census, “Annual Business Survey: Statistics for Employer Firms by Industry, Sex, Ethnicity, Race
and Veteran Status,” at https://data.census.gov/cedsci/table?tid=ABSCS2018.AB1800CSA01&hidePreview=true
(hereinafter Bureau of the Census, “Annual Business Survey: Statistics for Employer Firms by Industry, Sex, Ethnicity,
Race and Veteran”).
10 Bureau of the Census, “Annual Business Survey: Statistics for Employer Firms by Industry, Sex, Ethnicity, Race and
Veteran.”
11 Bureau of the Census, “Annual Business Survey: Statistics for Employer Firms by Industry, Sex, Ethnicity, Race and
Veteran.”
12 Bureau of the Census, “Annual Business Survey: Employment Size of Firm Statistics for Employer Firms by Sector,
Sex, Ethnicity, Race, and Veteran Status for the U.S., States and Metro Areas: 2018,” at https://data.census.gov/cedsci/
table?tid=ABSCS2018.AB1800CSA04&hidePreview=true.
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 had a total payroll of $177.7 bil ion (about 2.6% of total U.S. payroll from
nonfarm employer businesses); and
 generated more than $947.7 bil ion in total sales/receipts (about 2.5% of total
U.S. receipts from nonfarm employer businesses).13
Veterans’ Employment Data
The Department of Labor’s Bureau of Labor Statistics (BLS) provides monthly updates of the
employment status of the nation’s veterans. The BLS reports that as of June 2021, there were
about 18.8 mil ion veterans.14 There were over 9.1 mil ion veterans in the civilian labor force (i.e.,
they were either employed or unemployed and available for work, except for temporary il ness,
and had made specific efforts to find employment sometime during the four-week period ending
with the reference week). Of those veterans in the civilian labor force, 8.72 mil ion were
employed and about 437,000 were unemployed.15
In recent years, the unemployment rate among veterans as a whole has general y been lower than
the unemployment rate for nonveterans 18 years and older. However, veterans who have left the
military since September 2001 have experienced higher unemployment than other veterans and,
in some years, higher than nonveterans as wel . In June 2021, the unemployment rate for
nonveterans 18 years and older was 6.0%, which was higher than for veterans as a whole (4.8%),
veterans who left the military prior to September 2001 (4.5%), and veterans who left the military
since September 2001 (5.2%).16
Veterans who have left the military since September 2001 also have a higher labor force
participation rate (78.4%) than other veterans (36.7%) and nonveterans aged 18 and older
(64.3%).17 The higher labor force participation rate for veterans who left the military since
September 2001 was not wholly unexpected. They entered the civilian workforce more recently
and have had less time to develop a reason (e.g., health issue, family responsibility,
discouragement, retirement) to withdraw from the civilian workforce than other veterans and
nonveterans aged 18 and older.
The lower labor force participation rate for other veterans was also not whol y unexpected. They
entered the civilian workforce earlier and have had more time to develop a reason to withdraw
from the civilian workforce than veterans who left the military since September 2001 and
nonveterans aged 18 and older.18

13 Bureau of the Census, “Annual Business Survey: Statistics for Employer Firms by Industry, Sex, Ethnicity, Race and
Veteran.” In 2017, veteran-owned nonemployer businesses generated $59.3 billion in total sales/receipts (about 5.0% of
total U.S. receipts from nonemployer businesses). See Bureau of the Census, “Annual Business Survey: Employment
Size of Firm Statistics for Employer Firms by Sector, Sex, Ethnicity, Race, and Veteran Status for the U.S., States and
Metro Areas: 2018,” at https://www2.census.gov/programs-surveys/abs/data/2017/nesd_estimates_2017_Table1.xlsx.
14 DOL, Bureau of Labor Statistics, “ T able A-5. Employment status of the civilian population 18 years and over by
veteran status, period of service, and sex, not seasonally adjusted,” at https://www.bls.gov/news.release/empsit.t05.htm
(hereinafter DOL, T able A-5).
15 DOL, T able A-5.
16 DOL, T able A-5.
17 DOL, T able A-5.
18 A report by the Council of Economic Advisers and the National Economic Council attributed lower labor force
participation for veterans to several factors, including the difficulty many civilian employers have in understanding a
military resume and how milit ary job titles translate into civilian job skills, the presence of a service-connected
disability, especially among the post -9/11 veteran population, and the number of post -9/11 veterans (about 217,000)
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Veterans’ Employment and Business
Development Programs
Several federal agencies, including the SBA, sponsor employment and business development
programs to assist veterans in their transition from the military into the civilian labor force. As
discussed, the expansion of federal employment and business development training programs
targeted at specific populations, such as women and veterans, has led some Members and
organizations to ask if these programs should be consolidated. Others question if the level of
communication and coordination among federal agencies administering these programs has been
sufficient to ensure the programs are being administered in the most efficient and effective
manner.
SBA’s Office of Veterans Business Development
In an effort to assist veteran entrepreneurs, the SBA has either provided or supported management
and technical assistance training for veteran-owned smal businesses since its formation as an
agency.19 As mentioned, the SBA’s OVBD, statutorily authorized by P.L. 106-50, the Veterans
Entrepreneurship and Smal Business Development Act of 1999, serves as the SBA’s focal point
for veteran assistance programs. The act addressed congressional concerns that the United States
general y, and the SBA in particular, was not, at that time, doing enough to meet the needs of
veteran entrepreneurs, especial y service-disabled veteran entrepreneurs.20 At the time, several
Members of Congress argued that “the needs of veterans have been diminished systematical y at
the SBA,” as evidenced by the agency’s elimination of direct loans, including direct loans to
veterans, in 1995, and a decline in the SBA’s “training and counseling for veterans … from
38,775 total counseling sessions for veterans in 1993 to 29,821 sessions in 1998.”21 To address
these concerns, the act authorized the establishment of the federal y chartered National Veterans
Business Development Corporation (known as the Veterans Corporation and reconstituted,
without a federal charter, in 2012 as Veteranscorp.org).22 Its mission is to
(1) expand the provision of and improve access to technical assistance regarding
entrepreneurship for the Nation’s veterans; and (2) to assist veterans, including service-
disabled veterans, with the formation and expansion of small business concerns b y working
with and organizing public and private resources, including those of the Small Business
Administration, the Department of Veterans Affairs, the Department of Labor, the
Department of Commerce, the Department of Defense, the Service Corps of Retired

who have been diagnosed with post -traumatic stress disorder. See Executive Office of the President, Council of
Economic Advisers and the National Economic Council, “Military Skills for America’s Future: Leveraging Military
Service and Experience to Put Veterans and Military Spouses Back to Work,” May 31, 201 2, pp. 4-6, at
https://obamawhitehouse.archives.gov/sites/default/files/docs/veterans_report_5-31-2012.pdf.
19 U.S. Congress, Senate Committee on Banking and Currency, Extension of the Small Business Act of 1953, report to
accompany S. 2127, 84th Cong., 1st sess., July 22, 1955, S.Rept. 84-1350 (Washington: GPO, 1955), p. 17.
20 P.L. 106-50, the Veterans Entrepreneurship and Small Business Development Act of 1999 , Section 101. Findings.
21 U.S. Congress, House Committee on Small Business, Veterans Entrepreneurship and Small Business Development
Act of 1999, report to accompany H.R. 1568, 106th Cong., 1st sess., June 29, 1999, H.Rept. 106-206 (Washington: GPO,
1999), pp. 14-15 (hereinafter U.S. Congress, House Committee on Small Business, Veterans Entrepreneurship and
Sm all Business Developm ent Act of 1999).
22 Veteranscorp, “About Us,” Oxford, MD at http://www.veteranscorp.org/2012/01/a-new-veteranscorp-org-gets-the-
chance-to-help-veteran-entrepreneurs-2/.
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Executives…, the Small Business Development Centers…, and the business development
staffs of each department and agency of the United States.23
P.L. 106-50 reemphasized the SBA’s responsibility “to reach out to and include veterans in its
programs providing financial and technical assistance.”24 It included veterans as a target group for
the SBA’s 7(a), 504 Certified Development Company (504/CDC), and Microloan lending
programs. It also required the SBA to enter into a memorandum of understanding with SCORE
to, among other things, establish “a program to coordinate counseling and training regarding
entrepreneurship to veterans through the chapters of SCORE throughout the United States.”25 In
addition, it directed the SBA to enter into a memorandum of understanding with smal business
development centers, the Department of Veterans Affairs, and the National Veterans Business
Development Corporation “with respect to entrepreneurial assistance to veterans, including
service-disabled veterans.”26 The act specified that the following services were to be provided:
(1) Conducting of studies and research, and the distribution of information generated by
such studies and research, on the formation, management, financing, marketing, and
operation of small business concerns by veterans.
(2) Provision of training and counseling to veterans concerning the formation,
management, financing, marketing, and operation of small business concerns.
(3) Provision of management and technical assistance to the owners and operators of smal
business concerns regarding international markets, the promotion of exports, and the
transfer of technology.
(4) Provision of assistance and information to veterans regarding procurement
opportunities with Federal, State, and local agencies, especially such agencies funded in
whole or in part with Federal funds.
(5) Establishment of an information clearinghouse to collect and distribute information,
including by electronic means, on the assistance programs of Federal, State, and local
governments, and of the private sector, including information on office locations, key
personnel, telephone numbers, mail and electronic addresses, and contracting and
subcontracting opportunities.
(6) Provision of Internet or other distance learning academic instruction for veterans in
business subjects, including accounting, marketing, and business fundamentals.
(7) Compilation of a list of small business concerns owned and controlled by service-
disabled veterans that provide products or services that could be procured by the United
States and delivery of such list to each department and agency of the United States. Such
list shall be delivered in hard copy and electronic form and sh all include the name and
address of each such small business concern and the products or services that it provides.27
The SBA’s OVBD addressed these statutory requirements by promoting “veterans’ smal
business ownership by conducting comprehensive outreach, through program and policy
development and implementation, ombudsman support, coordinated agency initiatives, and direct

23 P.L. 106-50, the Veterans Entrepreneurship and Small Business Development Act of 1999, Section 33. National
Veterans Business Development Corporation. Also, see 15 U.S.C. §657c.
24 U.S. Congress, House Committee on Small Business, Veterans Entrepreneurship and Small Business Development
Act of 1999, p. 14.
25 P.L. 106-50, Section 301. Score Program.
26 P.L. 106-50, Section 302. Entrepreneurial Assistance.
27 P.L. 106-50, Section 302. Entrepreneurial Assistance.
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assistance to veterans, service-disabled veterans, reserve and National Guard members, and
discharging active duty service members and their families.”28
OVBD Outreach Funding
As shown in Table 1, the SBA’s OVBD’s appropriation for outreach activities general y has
increased in recent years. In FY2021, OVBD received an appropriation of $14 mil ion for
outreach activities. The Biden Administration has requested $19 mil ion for the SBA’s OVBD’s
outreach activities in FY2022.29
Table 1. SBA Office of Veteran’s Business Development Veterans Outreach
Appropriation, FY2015-FY2022
($ in mil ions)
FY
Appropriation
Actual Expenditures
2022 request
$19.000
NA
2021
$14.000
NA
2020
$14.000
$14.622
2019
$12.700
$12.224
2018
$12.300
$12.558
2017
$12.300
$12.572
2016
$12.300
$12.808
2015
$10.500
$10.733
Source: U.S. Smal Business Administration (SBA), “FY2016 Congressional Budget Justification and FY2014
Annual Performance Report,” p. 21, at https://www.sba.gov/sites/default/files/2018-06/Fiscal%20year%202016.zip;
SBA, “FY2017 Congressional Budget Justification and FY2015 Annual Performance Report,” p. 19, at
https://www.sba.gov/sites/default/files/2018-06/Fiscal%20year%202017.zip; SBA, “FY2018 Congressional Budget
Justification and FY2016 Annual Performance Report,” p. 12, at https://www.sba.gov/sites/default/files/2018-06/
Fiscal%20year%202018.zip; SBA, “FY2019 Congressional Justification and FY2017 Annual Performance Report,”
p. 12, at https://www.sba.gov/sites/default/files/2018-06/Fiscal%20year%202019.zip; SBA, “FY2020 Congressional
Justification and FY2018 Annual Performance Report,” p. 11, at https://www.sba.gov/sites/default/files/2019-04/
SBA%20FY%202020%20Congressional%20Justification_final%20508%20%204%2023%202019.pdf ; SBA, “FY2021
Congressional Justification and FY2019 Annual Performance Report,” p. 11, at https://www.sba.gov/sites/default/
files/2020-02/FY%202021%20CJ-508_FINAL.pdf; and SBA, “FY2022 Congressional Justification and FY2020
Annual Performance Report,” p. 13, at https://www.sba.gov/document/report-congressional-budget-justification-
annual-performance-report.
OVBD Outreach Programs
As mentioned, the OVBD provides, or supports third parties to provide, management and
technical assistance training services to more than 100,000 veterans each year. These services are
provided
through funded SBA district office outreach; OVBD-developed and distributed materials;
websites; partnering with DOD [Department of Defense], DOL [Department of Labor] and

28 SBA, “FY2013 Congressional Budget Justification and FY2011 Annual Performance Report,” p. 62, at
https://www.sba.gov/sites/default/files/files/FY%202015%20CBJ%20FY%202013%20APR%20FINAL%
20508(1).pdf.
29 SBA, “FY2022 Congressional Justification and FY2020 Annual Performance Report,” p. 13.
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universities; agreements with regional veterans business outreach centers; direct guidance,
training and assistance to Agency veteran customers; and through enhancemen ts to intra-
agency programs used by the military and veteran communities.30
The SBA’s OVBD’s outreach programs include
 the Entrepreneurship Bootcamp for Veterans with Disabilities Consortium of
Universities, which provides “experiential training in entrepreneurship and smal
business management to post-9/11 veterans with disabilities” at eight
universities;31
 the Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE) program,
administered through a cooperative agreement with Syracuse University, which
offers women veterans a 15-day, online course focused on entrepreneurship skil s
and the “language of business,” followed by a 3-day conference (offered twice a
year at varying locations) in which participants “are exposed to successful
entrepreneurs and CEOs of Fortune 500 companies and leaders in government”
and participate in courses on business planning, marketing, accounting and
finance, operations and production, human resources, and work-life balance;32
 the Operation Endure and Grow Program, administered through a cooperative
agreement with Syracuse University, which offers an eight-week online training
program “focused on the fundamentals of launching and/or growing a smal
business” and is available to National Guard members and reservists and their
family members;33
 the Boots to Business initiative, which is “an elective track within the
Department of Defense’s revised Training Assistance Program cal ed Transition
Goals, Plans, Success (Transition GPS) and has three parts: the Entrepreneurship
Track Overview—a 10-minute introductory video shown during the mandatory
five-day Transition GPS course, which introduces entrepreneurship as a post-
service career option; Introduction to Entrepreneurship—a two-day classroom
course on entrepreneurship and business fundamentals offered as one of the three
Transition GPS elective tracks; and Foundations of Entrepreneurship—an eight-
week, instructor-led online course that offers in-depth instruction on the elements
of a business plan and tips and techniques for starting a business”;34
 the Boots to Business: Reboot initiative, which expanded the Boots to Business
initiative in 2014 to include veterans of al eras, active duty servicemembers
(including National Guard and Reserves), and their partners/spouses;

30 SBA, “FY2013 Congressional Budget Justification and FY2011 Annual Performance Report,” p. 62, at
https://www.sba.gov/sites/default/files/files/1-
508%20Compliant%20FY%202013%20CBJ%20FY%20 2011%20APR(1).pdf.
31 Syracuse University, “About the EBV,” Syracuse, NY, at http://whitman.syr.edu/ebv/about/.
32 Syracuse University, “ Women Veterans Igniting the Spirit of Entrepreneurship (V-WISE),” Syracuse, NY, at
http://vwise.vets.syr.edu/vwise.
33 Syracuse University, “About Operation Endure and Grow,” Syracuse, NY, at http://vets.syr.edu/education/endure-
grow/.
34 SBA, “Operation Boots to Business: From Service to Startup,” at https://www.sba.gov/offices/headquarters/ovbd/
resources/160511; SBA, “ Operation Boots to Business: Fact Sheet ,” at https://www.sba.gov/sites/default/files/files/
B2B_Fact%20Sheet.pdf; and SBA, “ SBA Awards Funding to Nonprofit Organizations Providing “ Boots to Business”
Entrepreneurship T raining,” at https://www.sba.gov/about -sba/sba-newsroom/press-releases-media-advisories/sba-
awards-funding-nonprofit -organizations-providing-boots-business-entrepreneurship-training.
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 the Veterans Institute for Procurement (VIP) program, which is designed to
increase the ability of veteran-owned businesses to win government contracts by
providing “an accelerator-like, in-residence educational training program for
owners, principals, and executives of veteran-owned businesses, consisting of a
three-day comprehensive certification program instructed by professional service
experts, government officials, and agency representatives”;35 and
 the VBOC program, which provides veterans and their spouses management and
technical assistance training at 22 locations, including assistance with the Boots
to Business initiatives, the development and maintenance of a five-year business
plan, and referrals to other SBA resource partners when appropriate for additional
training or mentoring services.36
The SBA also continues to work closely with the Interagency Task Force for Veterans Smal
Business Development, which was established by executive order on April 26, 2010, held its first
public meeting on October 15, 2010, and issued its first report on November 1, 2011, to identify
“gaps in ensuring that transitioning military members who are interested in owning a smal
business get needed assistance and training.”37 The task force’s second report, issued on
November 29, 2012, focused on progress made since the initial report.38 The task force continues
to meet on a quarterly basis to foster communication and monitor agency progress in assisting
transitioning servicemembers.
VBOCs and the Boots to Business Initiative
The OVBD’s two largest management and technical assistance training programs are the VBOC
program and the Boots to Business initiative. As shown in Table 2, in FY2020, 46,025 veterans

35 SBA, “FY2018 Congressional Budget Justification and FY2016 Annual Performance Report,” p. 98, at
https://www.sba.gov/sites/default/files/aboutsbaarticle/FINAL_SBA_FY_2018_CBJ_May_22_2017c.pdf .
36 SBA, Office of Veterans Business Development, “Veterans Business Outreach Center (VBOC) Program,” at
https://www.sba.gov/page/veterans-business-outreach-center-vboc-program.
VBOC grants, typically ranging from $150,000 to $400,000 annually, may be renewed each year at the SBA’s
discretion for an additional four years subject to continuing program authority, the availability of funds, and the
recipient’s continued satisfactory performance and compliance with program requirements. See SBA, Office of
Veterans Business Development, “Veterans Business Outreach Center Program: FY2018 Funding Opportunity No.
VBOC-2018-01,” p. 5, at https://www.grants.gov/web/grants/search-grants.html?keywords=SB-OWB-21-001; and
SBA, Office of Veterans Business Development, “Veterans Business Outreach Center Program: Initial Phase Grant,
Notice of Funding Opportunity: VBOC-2021-01,” pp. 2-5, at https://www.grantsolutions.gov/gs/preaward/
previewPublicAnnouncement.do?id=92281.
37 SBA, Office of Veterans Business Development, “ Interagency T ask Force,” at https://www.sba.gov/offices/
headquarters/ovbd/resources/14372; and T he Interagency T ask Force on Veterans Small Business Development,
“Report to the President: Empowering Veterans T hrough Entrepreneurship,” November 1, 2011, at
https://www.sba.gov/sites/default/files/FY2012-Final%20Veterans%20T F%20Report%20to%20President.pdf .
38 T he Interagency T ask Force on Veterans Small Business Development , “Heroes on the Home Front: Supporting
Veteran Success as Small Business Owners,” November 29, 2012, at https://www.sba.gov/sites/default/files/files/
Veterans_Report_FINAL.pdf. T he Interagency Task Force on Veterans Small Business Development includes senior-
level representatives of the SBA, the Departments of Defense, Labor, T reasury, and Veterans Affairs, the General
Services Administration, the Office of Management and Budget, and four representatives from veterans’ service or
military organizat ions appointed by the SBA administrator. SBA Acting Associate Administrator Barbara Carson
serves as its chair. See Executive Order 13540, “Interagency T ask Force on Veterans Small Business Development,” 75
Federal Register 22497-22498, April 29, 2010; and U.S. Small Business Administration, “ Inter-Agency Task Force on
Veterans Small Business Development: Kick Off Meeting Wednesday, September 15, 2010,” at https://www.sba.gov/
offices/headquarters/ovbd/resources/14368.
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received management and technical assistance from a VBOC and 21,799 veterans participated in
the Boots to Business initiative.
Table 2. Veterans Business Outreach Centers and Boots to Business Initiative,
Number of Clients and Participants, FY2013-FY2020
Number of Veterans Business
Number of Boots to Business
FY
Outreach Center Clients
Initiative Participants
2020
46,025
21,799
2019
41,860
16,528
2018
51,945
17,167
2017
48,839
17,320
2016
47,342
17,966
2015
62,117
14,457
2014
78,124
14,684
2013
73,062
4,514
Source: SBA, “FY2020 Congressional Justification and FY2018 Annual Performance Report,” p. 96, at
https://www.sba.gov/sites/default/files/2019-04/
SBA%20FY%202020%20Congressional%20Justification_final%2050 8%20%204%2023%202019.pdf; SBA, “FY2021
Congressional Justification and FY2019 Annual Performance Report,” pp. 94, 95, at https://www.sba.gov/sites/
default/files/2020-02/FY%202021%20CJ-508_FINAL.pdf; and SBA, “FY2022 Congressional Justification and
FY2020 Annual Performance Report,” pp. 90, 92, at https://www.sba.gov/document/report-congressional-budget-
justification-annual-performance-report.
The VBOC program’s origin can be traced to P.L. 105-135, the Smal Business Reauthorization
Act of 1997, which directed the SBA to “develop and implement a program of comprehensive
outreach to assist eligible veterans, which program shal include business training and
management assistance, employment and relocation counseling, and dissemination of information
on veterans’ benefits and veterans’ entitlements.” The program awarded its first outreach center
grants to four organizations in September 1999.39
The Operation Boots to Business: From Service to Startup initiative for transitioning
servicemembers started as a partnership between the SBA’s OVBD and Syracuse University in

39 T he four organizations were the University of T exas-Pan American, T EP Consulting, Inc., the University of West
Florida (Veterans Business Outreach Center, Lynn Haven, Florida), and the Research Foundation of th e State
University of New York. See U.S. Congress, House Committee on Small Business, Hearing with Respect to SBA
Program s for Veterans and the National Veterans Developm ent Corporation, hearing, 107th Cong., 1st sess., May 23,
2001, Serial No. 107-10 (Washington: GPO, 2001), p. 38; and SBA, “ Award Notice for the Veterans Business
Outreach Program Under Program,” 64 Federal Register 50547, September 17, 1999.
Prior to the VBOC program, the SBA’s Veterans Entrepreneurial T raining (VET ) Program, established on a pilot basis
in 1986, provided grants to nonprofit organizations (such as SCORE, Veteran Business Resource Councils, and
Chambers of Commerce) to make arrangements with community colleges and technological institutes to provide
management and technical assistance, typically lasting at least six months, to veterans interested in starting a business.
See U.S. Congress, House Committee on Veterans’ Affairs, Subcommittee on Education, T raining and Employment,
H.R. 1404-The Veterans Entrepreneurship Prom otion Act of 1991, hearing, 102nd Cong., 1st sess., May 15, 1991, Serial
Number 102-14 (Washington: GPO, 1991), pp. 3, 4, 109, 110; and U.S. Congress, House Committee on Small
Business, Subcommittee on Government Programs, and House Committee on Veterans’ Affairs, Subcommittee on
Education, T raining, Employment, and Housing, SBA Program s to Assist Veterans in Readjusting to Civilian Life, joint
hearing, 104th Cong., 2nd sess., July 31, 1996, Serial Number 104-91 (Washington: GPO, 1996), pp. 11 -13, 33-41, 49-
56, 94-98.
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July 2012. The initiative became fully operational in February 2014.40 The program consists of a
two-day introductory course on entrepreneurship followed by an eight-week, online course to
prepare servicemembers and military spouses “for post-service career success as business
owners.”41
Congress provided the SBA $7 mil ion in FY2014 and $7.5 mil ion in FY2015 to expand the
Boots to Business initiative “nationwide to the 250,000 yearly transitioning servicemembers in al
branches of the military.”42 Since then, funding for the initiative has been provided through the
appropriation for the OVBD’s outreach activities.
The initiative’s two-day Introduction to Entrepreneurship course is now offered at 213 military
institutions worldwide and is “a standard portion of the curricula offered at the revised Transition
Assistance Program (TAP) to servicemembers.”43 TAP is administered by the Department of
Defense (DOD) in cooperation with the Department of Labor (DOL), Department of Veterans
Affairs (VA), Department of Education (DOE), Department of Homeland Security (DHS), Office
of Personnel Management (OPM), and SBA.44
During the 114th Congress, legislation was introduced and reported favorably by the Senate
Committee on Smal Business and Entrepreneurship to provide the Boots to Business initiative

40 SBA, Office of Inspector General, The Small Business Administration’s Boots to Business Program , Report Number
18-20, July 19, 2018, p. 1, at https://www.sba.gov/document/report -18-20-small-business-administrations-boots-
business-program.
Prior to the Boots to Business Initiative, the SBA had participated in the Department of Defense’s T ransitional
Assistance Program on a somewhat less formal basis since the 1980s. See U.S. Congress, House Committee on
Veterans’ Affairs, Subcommittee on Education, T raining and Employment, H.R. 1404-The Veterans Entrepreneurship
Prom otion Act of 1991, hearing, 102nd Cong., 1st sess., May 15, 1991, Serial Number 102-14 (Washington: GPO,
1991), pp. 3, 4, 108-110; and U.S. Congress, House Committee on Small Business, Subcommittee on Government
Programs, and House Committee on Veterans’ Affairs, Subcommittee on Education, T raining, Employment, and
Housing, SBA Program s to Assist Veterans in Readjusting to Civilian Life, joint hearing, 104th Cong., 2nd sess., July 31,
1996, Serial Number 104-91 (Washington: GPO, 1996), pp. 11 -13, 33-41, 49-56, 94-98.
41 SBA, “ Operation Boots to Business: From Service to Startup,” at http://www.sba.gov/bootstobusiness; and Institute
for Veterans and Military Families, Syracuse University, “White Paper: Operation Boots to Business Veteran
Entrepreneurship Assessment ,” June 2016, p. 2, at https://www.sba.gov/sites/default/files/
b2b_vet_entrepreneurship_assessment.pdf. The eight -week, online course provides instruction on the “ elements of a
business plan, evaluating venture ideas, identifying components of business venture strategies and interrelations of
marketing, accounting/finance, operations/production, and human resources.” See Institute for Veterans and Military
Families, Syracuse University, “White Paper: Operation Boots to Business Veteran Entrepreneurship Assessment,”
June 2016, p. 15.
42 SBA, “FY2014 Congressional Budget Justification and FY2012 Annual Performance Report, ” p. 52, at
https://www.sba.gov/sites/default/files/files/1-508-Compliant -FY-2014-CBJ%20FY%202012%20APR.pdf.
Recommended FY2014 funding levels for the SBA’s noncredit programs are in the Explanatory Statement
accompanying the Consolidated Appropriations Act, 2014 (Division E -Financial Services and General Government
Appropriations Act, 2014), pp. 37-39, at http://docs.house.gov/billsthisweek/20140113/113-HR3547-JSOM-D-F.pdf.
43 Institute for Veterans and Military Families, Syracuse University, “White Paper: Operation Boots to Business
Veteran Entrepreneurship Assessment,” June 2016, p. 13, at https://www.sba.gov/sites/default/files/
b2b_vet_entrepreneurship_assessment.pdf.
44 T he Department of Defense introduced a redesigned curriculum for the T AP program, called the T ransition Goals
Plans Success pilot program (T ransition GPS), at seven military bases in summer 2012. T ransition GPS is now offered
nationwide. It includes a five-day core program intended to ensure servicemembers are “ career ready” when they leave
military service. T he core curriculum includes the following modules: pre-separation counseling (4 hours), Department
of Veterans Affairs benefits (6 hours), employment workshop (24 hours), financial planning (4 hours), resilient
transition (1 hour), and a crosswalk between military and civilian skills that includes a “skills gap” analysis (2 hours).
T ransition GPS is mandatory for nearly all exiting servicemembers. See U.S. Department of Defense, “ T urbo T ap,” at
http://www.turbotap.org/register.tpp.
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statutory authorization (S. 1866, the Veterans Smal Business Ownership Improvements Act of
2015). Similar legislation was introduced during the 115th Congress (S. 121, the Veterans Smal
Business Ownership Improvements Act, and H.R. 5193, the Veteran Entrepreneurship Training
Act of 2018), the 116th Congress (H.R. 3537, the Veteran Entrepreneurship Training Act of 2019),
and the 117th Congress (H.R. 3469, to amend the Smal Business Act to Codify the Boots to
Business Program, and for other purposes).
Congressional Issues: Duplication of Services
The expansion of the SBA’s veteran outreach efforts has led some Members and organizations to
ask if the nation’s veterans might be better served if some of the veteran employment and
business development programs offered by federal agencies were consolidated. For example, as
mentioned, DOD, in cooperation with several federal agencies, operates the recently revised
Transition Assistance Program, Transition GPS, which provides employment information and
training to exiting servicemembers to assist them in transitioning from the military into the
civilian labor force. In addition, DOL’s Jobs for Veterans State Grants program provides states
funding for Disabled Veterans’ Outreach Program specialists and Local Veterans’ Employment
Representatives to provide outreach and assistance to veterans, and their spouses, seeking
employment.45 DOL also administers the Veterans Workforce Investment Program, which
provides grants to fund programs operated by eligible state and local government workforce
investment boards, state and local government agencies, and private nonprofit organizations to
provide various services designed to assist veterans’ transitions into the civilian labor force.46 The
DOL-administered Homeless Veterans Reintegration Program provides grants to fund programs
operated by eligible state and local government workforce investment boards, state and local
government agencies, and private nonprofit organizations that provide various services designed
to assist homeless veterans achieve meaningful employment and to aid in the development of a
service delivery system to address problems facing homeless veterans.47
Advocates of consolidating veteran employment and business development programs argue that
eliminating program duplication among federal agencies would result in lower costs and
improved services. For example, H.R. 4072, the Consolidating Veteran Employment Services for
Improved Performance Act of 2012, which was introduced during the 112th Congress and ordered
to be reported by the House Committee on Veterans’ Affairs on April 27, 2012, would have
transferred several veteran employment training programs from the DOL to the VA.48
In addition, in 2011, 2012, 2013, 2014, and 2015, the House Committee on Smal Business, in its
“Views and Estimates” letter to the House Committee on the Budget, recommended that funding
for the SBA’s VBOCs be either eliminated or transferred to the Department of Veterans Affairs
because, as it stated in 2012, “the SBA already provides significant assistance to veterans who are
seeking to start or already operate smal businesses. The VBOCs duplicate services already

45 For information on the Disabled Veterans’ Outreach Program and Local Veterans’ Employment Representatives
Program, see DOL, “Jobs for Veterans State Grants,” at http://www.dol.gov/vets/grants/state/jvsg.htm.
46 For further information and analysis of federal programs outside of the SBA that are designed to assist veterans
seeking civilian employment , see CRS Report R42790, Em ployment for Veterans: Trends and Program s, coordinated
by Benjamin Collins.
47 For further information and analysis concerning the Homeless Veterans Reintegration Program , see CRS Report
RL34024, Veterans and Hom elessness, by Libby Perl.
48 U.S. House of Representatives, Committee on Veterans’ Affairs, “ Debunking the Myths: H.R. 4072,” at
http://veterans.house.gov/4072.
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available from the SBA, other entrepreneurial development partners and programs available from
the Department of Veterans Affairs.”49 In 2014, the House Committee on Smal Business also
recommended that if additional funds were to be provided to VBOCs, those funds should come
from the SBA’s Boots to Business initiative.
Advocates of consolidating federal veteran employment and business development programs cite
U.S. Government Accountability Office (GAO) reports that have characterized the broader
category of federal support for entrepreneurs, including veteran entrepreneurs, as fragmented and
having overlapping missions. For example, in 2012, GAO identified 53 programs within the SBA
and the Departments of Commerce, Housing and Urban Development, and Agriculture designed
to support entrepreneurs, including 36 programs that provide entrepreneurs technical assistance,
such as business training, counseling, and research and development support. GAO found that
“the overlap among these programs raise[s] questions about whether a fragmented system is the
most effective way to support entrepreneurs” and suggested agencies should “determine whether
there are more efficient ways to continue to serve the unique needs of entrepreneurs, including
consolidating programs.”50
Instead of consolidating programs, some argue that improved communication and cooperation
among the federal agencies providing entrepreneur support programs, and among the SBA’s
management and technical assistance training resource partners, would enhance program
efficiencies while preserving the ability of these programs to offer services that match the unique
needs of various underserved populations, such as veterans. For example, during the 111th
Congress, the House passed H.R. 2352, the Job Creation Through Entrepreneurship Act of 2009,
on May 20, 2009, by a vote of 406-15. The Senate did not take action on the bil . In its committee
report accompanying the bil , the House Committee on Smal Business concluded at that time that
each ED [Entrepreneurial Development] program has a unique mandate and service
delivery approach that is customized to its particular clients. However, as a network, the
programs have established local connections and resources that benefit entrepreneurs
within a region. Enhanced coordination among this network is critical to make the most of
scarce resources available for small businesses. It can also ensure that best practices are
shared amongst providers that have similar goals but work within different contexts.51

49 U.S. House of Representatives, Committee on Small Business, “Views and Estimates of the Committee on Small
Business on Matters to be set forth in the Concurrent Resolution on the Budget for Fiscal Year 201 2,” March 17, 2011,
at http://smallbusiness.house.gov/uploadedfiles/march_17_views_and_estimates_letter.pdf. Also, see U.S. House of
Representatives, Committee on Small Business, “ Views and Estimates of the Committee on Small Business on Matters
to be set forth in the Concurrent Resolution on the Budget for Fiscal Year 2013 ,” March 7, 2012, at
http://smallbusiness.house.gov/uploadedfiles/views_and_estimates_fy_2013.pdf; U.S. House of Representatives,
Committee on Small Business, “Views and Estimates of the Committee on Small Business on Matters to be set forth in
the Concurrent Resolution on the Budget for Fiscal Year 201 4,” February 27, 2013, at http://smallbusiness.house.gov/
uploadedfiles/revised_2014_views_and_estimates_document.pdf; U.S. House of Representatives, Committee on Small
Business, “Views and Estimates of the Committee on Small Business on Matters to be set forth in the Concurrent
Resolution on the Budget for Fiscal Year 2015,” March 25, 2014, at http://smallbusiness.house.gov/uploadedfiles/3-25-
2014_revised_budget_views_and_estimates__fy_2015_v2.pdf ; and U.S. House of Representatives, Committee on
Small Business, “Views and Estimates of the Committee on Small Business on Matters to be set forth in the Concurrent
Resolution on the Budget for Fiscal Year 2016,” February 12, 2015, at http://smallbusiness.house.gov/uploadedfiles/2-
12-2015_views_and_estimates_document.pdf.
50 U.S. Government Accountability Office (GAO), 2012 Annual Report: Opportunities to Reduce Duplication, Overlap
and Fragm entation, Achieve Savings, and Enhance Revenue, GAO-12-342SP, February 28, 2012, p. 55, at
http://www.gao.gov/assets/590/588818.pdf. Also see GAO, Entrepreneurial Assistance: Opportunities Exist to Im prove
Programs’ Collaboration, Data-Tracking, and Performance Management, GAO-12-819, August 23, 2012, pp. 60-61,
at http://www.gao.gov/assets/650/647267.pdf.
51 U.S. Congress, House Committee on Small Business, Job Creation Through Entrepreneurship Act of 2009, report to
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The bil was designed to enhance oversight and coordination of the SBA’s management and
technical assistance training programs by requiring the SBA to coordinate these programs “with
State and local economic development agencies and other federal agencies as appropriate” and to
“report annual y to Congress, in consultation with other federal departments and agencies as
appropriate, on opportunities to foster coordination, limit duplication, and improve program
delivery for federal entrepreneurial development activities.”52
In a related development, as mentioned, the Obama Administration formed the Interagency Task
Force for Veterans Smal Business Development by executive order on April 26, 2010. The
SBA’s representative chairs the task force, which is composed of senior representatives from
seven federal agencies and four representatives from veterans’ organizations.53 One of the task
force’s goals is to improve “collaboration, integration and focus across federal agencies, key
programs (e.g., the Transition Assistance Program), veterans’ service organizations, states, and
academia.”54
On November 1, 2011, the task force issued 18 recommendations, including recommendations
designed to increase and augment federal entrepreneurial training and technical assistance
programs offered to veterans. For example, it recommended the development of a “standardized,
national entrepreneurship training program specifical y for veterans” that “could utilize expert
local instructors, including academics and successful smal business owners, to provide training
in skil s used to create and grow entrepreneurial ventures and smal business. The national
program could provide engaging training modules and workshops dedicated to the basics of
launching a business.”55 The task force also recommended the development of a web portal “that
al ows veterans to access entrepreneurship resources from across the government.”56 Since then,
the task force has met quarterly and its annual reports document its efforts to address the 18
recommendations.57
Veterans’ Access to Capital
Conventional wisdom asserts that the experiences and skil s veterans gain from military service
(such as teamwork, leadership and management skil s, work ethic and self-discipline,
perseverance, and crisis management) are useful in preparing them to become successful
entrepreneurs. However, it has been surmised that veterans may have a difficult time building a
sufficient credit score and management history necessary to gain access to capital due to the
frequent moves and overseas travel associated with military life. A recent analysis of smal

accompany H.R. 2352, 111th Cong., 1st sess., May 15, 2009, H.Rept. 111-112 (Washington: GPO, 2009), pp. 17-18.
52 H.R. 2352, the Job Creation T hrough Entrepreneurship Act of 2009, Section 601. Expanding Entrepreneurship.
53 T he seven federal agencies are the SBA, U.S. General Services Administration, U.S. Office of Management and
Budget, and the Departments of Defense, Labor, T reasury, and Veterans Affairs. T he four veterans’ organizations are
Association of State Directors of Veterans Affairs, Student Veterans of America, the American Legion, and VET -
Force.
54 Interagency T ask Force on Veterans Small Business Development, “Report to the President: Empowering Veterans
T hrough Entrepreneurship,” November 1, 2011, p. 6, at https://www.sba.gov/sites/default/files/FY2012-
Final%20Veterans%20T F%20Report%20to%20President.pdf (hereinafter Interagency Task Force on Veterans Small
Business Development, “Report to the President”).
55 Interagency T ask Force on Veterans Small Business Development, “Report to the President ,” p. 15.
56 Interagency T ask Force on Veterans Small Business Development, “Report to the President ”, p. 8.
57 SBA, “Office of Veterans Business Development, Resources: Interagency T ask Force on Veterans Small Business
Development,” at https://www.sba.gov/offices/headquarters/ovbd/resources/14372.
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business owner responses to the Federal Reserve Banks’ Smal Business Credit Survey found that
many veterans cite access to capital as one of their top chal enges in starting a business. Veteran
smal business owners also reported greater difficulty in accessing capital than nonveteran smal
business owners.58 For example, veteran smal business owners reported approximately 10%
lower loan approval rates than nonveteran smal business owners and more financing shortfal s.59
The study concluded that there were three possible explanations for veterans experiencing access
to capital difficulties:
 lower amounts sought/lender mismatch—a greater share of veteran smal
business owners reported seeking $100,000 or less in financing compared to
nonveteran smal business owners. Because it can be more costly for larger
lending sources (i.e., banks) to process smal er loans due to fixed transaction
costs, larger lenders tend to be less likely to approve smal er loans. Therefore, the
authors argued that lower approval rates for veterans could be a mismatch in the
type of lender from which financing was sought and the lender most likely to
approve smal er loan amounts.
 lower credit scores/insufficient credit history—veteran smal business owners
reported lower credit scores on average and a greater rate of credit denial due to
insufficient credit history and collateral. The authors noted that these findings are
in line with the notion that the frequent moves and overseas travel associated
with military life can hinder veterans’ opportunities for building credit compared
to nonveterans, and may not be indicative of their level of financial
responsibility.
 need to seek help earlier—veteran smal business owners reported that they
submitted more loan applications and had lower approval rates than nonveteran
smal business owners. The authors noted that SBA officials, who often see
veterans after they have already attempted and failed to obtain business
financing, indicated that some veteran smal business owners may lack
understanding of or preparation for the loan application process. Those officials
indicated that veteran smal business owners who seek mentorship and help in
understanding the credit and collateral requirements prior to applying for a loan
could be better able to put together a successful loan application.60
Veterans and SBA Loan Programs
The SBA administers several loan guaranty programs, including the 7(a) and the 504/CDC
programs, to encourage lenders to provide loans to smal businesses “that might not otherwise
obtain financing on reasonable terms and conditions.”61 As discussed below, the SBA has several

58 Sid Sankaran and Jessica Battisto, Financing Their Future: Veteran Entrepreneurs and Capital Access (Federal
Reserve Bank of New York, November 2018), p. 8, at https://www.newyorkfed.org/medialibrary/media/smallbusiness/
2017/Report -on-Veteran-Entrepreneurs-and-Capital-Access.pdf.
59 Sid Sankaran and Jessica Battisto, Financing Their Future: Veteran Entrepreneurs and Capital Access (Federal
Reserve Bank of New York, November 2018), p. 18.
60 Sid Sankaran and Jessica Battisto, Financing Their Future: Veteran Entrepreneurs and Capital Access (Federal
Reserve Bank of New York, November 2018), p. 18.
61 SBA, Fiscal Year 2010 Congressional Budget Justification, p. 30, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/Congressional_Budget_Justification_2010.pdf. Also see no credit elsewhere clause in P.L. 83-163, the
Small Business Act (as amended).
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policies in place to encourage veteran-owned smal businesses to participate in its lending
programs.
SBA’s 7(a) Loan Guaranty Program
The SBA’s 7(a) loan guaranty program is considered the agency’s flagship loan guaranty
program. Its name is derived from Section 7(a) of the Smal Business Act of 1953 (P.L. 83-163, as
amended), which authorizes the SBA to provide business loans to American smal businesses.
The 7(a) program provides SBA-approved lenders a guaranty of up to 85% of loans of $150,000
or less and up to 75% of loans exceeding $150,000, up to the program’s maximum gross loan
amount of $5 mil ion (up to $3.75 mil ion maximum guaranty). In FY2020, the average approved
7(a) loan amount was $520,765.62
Proceeds from 7(a) loans may be used to establish a new business or to assist in the operation,
acquisition, or expansion of an existing business. Specific uses include to acquire land (by
purchase or lease); improve a site (e.g., grading, streets, parking lots, and landscaping); purchase,
convert, expand, or renovate one or more existing buildings; construct one or more new
buildings; acquire (by purchase or lease) and instal fixed assets; purchase inventory, supplies,
and raw materials; finance working capital; and refinance certain outstanding debts.
A 7(a) loan is required to have the shortest appropriate term, depending upon the borrower’s
ability to repay. The maximum term is 10 years, unless the loan finances or refinances real estate
or equipment with a useful life exceeding 10 years. In that case, the loan term can be up to 25
years, including extensions. Interest rates are negotiated between the borrower and lender but are
subject to maximum rates.63
As shown in Table 3, the amount of veteran 7(a) loan approvals peaked in FY2015 and FY2016,
and have declined somewhat since then. In FY2020, the SBA approved 43,302 7(a) loans totaling
nearly $22.6 bil ion, including 1,942 loans to veterans (4.6%) totaling $690 mil ion (3.1%). In
FY2020, the average approved veteran 7(a) loan amount was $359,242.64
Table 3. 7(a) Loan Guaranty Program Approvals, FY2010-FY2020
($ in mil ions)
Total Amount of
Total Amount of
Total # of 7(a)
7(a) Loans
# of Veteran 7(a)
Veteran 7(a) Loans
FY
Loans Approved
Approved
Loans Approved
Approved
2020
42,302
$22,550
1,942
$690
2019
50,907
$23,176
2,496
$897
2018
60,353
$25,372
3,084
$969
2017
62,430
$25,447
3,300
$984
2016
64,074
$24,128
3,264
$1,157
2015
63,461
$23,584
3,109
$1,215

62 SBA, “SBA Lending Statistics for Major Programs (as of 9/30 /2020),” at https://www.sba.gov/sites/default/files/
2020-10/WebsiteReport_asof_20200930-508.pdf (hereinafter SBA, “ SBA Lending Statistics for Major Programs (as of
9/30/2020)”).
63 For further information and analysis concerning the SBA’s 7(a) loan guaranty program, see CRS Report R41146,
Sm all Business Adm inistration 7(a) Loan Guaranty Program , by Robert Jay Dilger.
64 SBA, “SBA Lending Statistics for Major Programs (as of 9/30/2020).”
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Total Amount of
Total Amount of
Total # of 7(a)
7(a) Loans
# of Veteran 7(a)
Veteran 7(a) Loans
FY
Loans Approved
Approved
Loans Approved
Approved
2014
52,044
$19,191
2,101
$605
2013
46,395
$17,865
2,224
$604
2012
44,376
$15,153
2,256
$597
2011
53,710
$19,640
3,269
$920
2010
47,000
$12,406
3,201
$615
Sources: SBA, “SBA Lending Statistics for Major Programs (as of 9/30/2014),” at http://www.sba.gov/sites/
default/files/aboutsbaarticle/WebsiteReport_asof9_30_2014.pdf; and SBA, “SBA Lending Statistics for Major
Programs (as of 9/30/2020),” at https://www.sba.gov/sites/default/files/2020-10/WebsiteReport_asof_20200930-
508.pdf.
Notes: The number of 7(a) loans approved annual y is typical y 10% to 20% higher than the number of loans
disbursed (e.g., a borrower decides not to accept the loan or a change in business ownership). The amount of
7(a) loans approved annual y is typical y 10% to 15% higher than the amount disbursed.
SBA’s 504/CDC Loan Guaranty Program
The SBA’s 504/CDC loan guaranty program is administered through nonprofit certified
development companies (CDCs). It provides long-term fixed rate financing for major fixed assets,
such as land, buildings, equipment, and machinery. Of the total project costs, a third-party lender
must provide at least 50% of the financing, the CDC provides up to 40% of the financing through
a 100% SBA-guaranteed debenture, and the applicant provides at least 10% of the financing. The
504/CDC program’s name is derived from Section 504 of the Smal Business Investment Act of
1958 (P.L. 85-699, as amended), which provides the most recent authorization for the sale of
504/CDC debentures.65 In FY2020, the average approved 504/CDC loan amount was $818,497.66
As shown in Table 4, the amount of veteran 504/CDC loan approvals peaked in FY2012, and,
after declining somewhat for several years, increased in FY2020. In FY2020, the SBA approved
7,119 504/CDC loans totaling over $5.8 bil ion, including 189 loans to veterans (2.7%) totaling
$145.1 mil ion (2.5%). In FY2020, the average approved veteran 504/CDC loan amount was
$767,984.67
Table 4. 504/CDC Loan Guaranty Program Approvals, FY2010-FY2020
($ in mil ions)
Total # of
Total Amount of
# of Veteran
Total Amount of
504/CDC Loans
504/CDC Loans
504/CDC Loans
Veteran 504/CDC
FY
Approved
Approved
Approved
Loans Approved
2020
7,119
$5,827
189
$145
2019
6,099
$4,958
128
$87
2018
5,874
$4,753
158
$95
2017
6,218
$5,014
202
$136

65 For further information and analysis concerning the SBA’s 504 Certified Development Company (504/CDC) loan
guaranty program, see CRS Report R41184, Sm all Business Adm inistration 504/CDC Loan Guaranty Program , by
Robert Jay Dilger.
66 SBA, “SBA Lending Statistics for Major Programs (as of 9/30/2020).”
67 SBA, “SBA Lending Statistics for Major Programs (as of 9/30/2020).”
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Total # of
Total Amount of
# of Veteran
Total Amount of
504/CDC Loans
504/CDC Loans
504/CDC Loans
Veteran 504/CDC
FY
Approved
Approved
Approved
Loans Approved
2016
5,938
$4,740
244
$159
2015
5,787
$4,298
254
$155
2014
5,885
$4,199
252
$157
2013
7,708
$5,227
372
$217
2012
9,471
$6,712
472
$319
2011
7,983
$4,845
411
$248
2010
7,833
$4,433
367
$185
Sources: SBA, “SBA Lending Statistics for Major Programs (as of 9/30/2014),” at http://www.sba.gov/sites/
default/files/aboutsbaarticle/WebsiteReport_asof9_30_2014.pdf; and SBA, “SBA Lending Statistics for Major
Programs (as of 9/30/2020),” at https://www.sba.gov/sites/default/files/2020-10/WebsiteReport_asof_20200930-
508.pdf.
Notes: Based on previous experience, the number of 504/CDC loans approved is typical y about 4% to 5%
higher than the actual number of loans disbursed (e.g., some borrowers decide not to accept the loan or there is
a change in ownership); and the amount of debentures (loans) approved is typical y 10% to 12% higher than the
amount of debentures disbursed.
SBA’s 7(a) Loan Guaranty Subprograms and Fee Waivers
The SBA administers several 7(a) loan guaranty subprograms that offer streamlined and
expedited loan procedures to encourage lenders to provide loans to specific groups of borrowers
identified by the SBA as having difficulty accessing capital. In the past, the Patriot Express
program (2007-2013) encouraged lenders to provide loans to veterans and their spouses. It
provided loans of up to $500,000 (with a guaranty of up to 85% of loans of $150,000 or less and
up to 75% of loans exceeding $150,000).68
The SBA considered the Patriot Express program a success, but some veterans’ organizations
expressed concern that many veterans, especial y during and immediately following the Great
Recession (December 2007 to June 2009), experienced difficulty finding lenders wil ing to
provide them Patriot Express loans.69 In addition, GAO reported in September 2013 that with the
exception of loans approved in 2007, Patriot Express loans defaulted at a higher rate than regular

68 Eligible businesses were required to be owned and controlled (51% or more) by one or more of the following groups:
veteran, active duty military participating in the military’s T ransition Assistance Program, reservist or National Guard
member or a spouse of any of these groups, a widowed spouse of a servicemember who died while in service, or a
widowed spouse of a veteran who died of a service-connected disability. See SBA, “ SOP 50 10 5(E): Lender and
Development Company Loan Programs,” (effective June 1, 2 012), pp. 83, 127, at https://www.sba.gov/sites/default/
files/SOP%2050%2010%205(E)%20(5-16-2012)%20clean.pdf. T he program’s interest rates were negotiable with the
lender, subject to the same maximum rate limitations as the 7(a) program, which vary depending upon the size and
maturity of the loan. It also had the same fees as the 7(a) program, which also varies depending on the size and maturity
of the loan.
69 U.S. Congress, Senate Committee on Small Business and Entrepreneurship, Assessing Federal Small Business
Assistance Program s for Veterans and Reservists, hearing, 110th Cong., 1st sess., January 31, 2007, S.Hrg. 110-209
(Washington: GPO, 2007), p. 32; U.S. Congress, House Committee on Veterans’ Affairs, Subcommittee on Economic
Opportunity, Status of Veterans Sm all Business, hearing, 111th Cong., 2nd sess., April 29, 2010, House Committee on
Veterans’ Affairs Serial No. 111-74 (Washington: GPO, 2010), pp. 17, 75 (hereinafter U.S. Congress, House
Committee on Veterans’ Affairs, Status of Veterans Sm all Business); and SBA, “ Popular SBA Patriot Express Loan
Initiative Renewed for T hree More Years,” December 10, 2010, at https://www.sba.gov/content/popular-sba-patriot-
express-loan-initiative-renewed-three-more-years.
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7(a) loans and loans made under the SBAExpress program (a 7(a) loan guaranty subprogram
offering streamlined borrower application and lender approval procedures).70 Over its history, the
Patriot Express program disbursed 9,414 loans totaling more than $791 mil ion.71
On January 1, 2014, the SBA implemented a new, streamlined application process for 7(a) loans
of $350,000 or less. As part of an overal effort to streamline and simplify its loan application
process, the SBA also eliminated several 7(a) subprograms, including the Patriot Express
program. In anticipation of ending the Patriot Express program, the SBA announced on
November 8, 2013, that it would waive the up-front, one-time loan guaranty fee for loans to a
veteran or veteran’s spouse under the SBAExpress program from January 1, 2014, through the
end of FY2014 (cal ed the Veterans Advantage Program).72
The SBA announced that this fee waiver was part “of SBA’s broader efforts to make sure that
veterans have the tools they need to start and grow a business.”73 The Obama Administration
continued this fee waiver for veterans through the end of FY2015.
During the 113th Congress, S. 2143, the Veterans Entrepreneurship Act, would have authorized
and made the Veterans Advantage Program’s fee waiver permanent. P.L. 113-235, the
Consolidated and Further Continuing Appropriations Act, 2015, provided statutory authorization
for the fee waiver for FY2015.
During the 114th Congress, P.L. 114-38, the Veterans Entrepreneurship Act of 2015, authorized
and made the SBA’s practice of waiving the SBAExpress loan program’s one time, up-front
guaranty fee for veterans (and their spouses) permanent beginning on or after October 1, 2015,
except during any upcoming fiscal year for which the President’s budget, submitted to Congress,
includes a credit subsidy cost for the 7(a) program, in its entirety, that is above zero.74
The SBA waived the up-front, one-time loan guaranty fee for loans to a veteran or veteran’s
spouse under the SBAExpress program in FY2016-FY2019, but did not do so in FY2020 because
the President’s FY2020 budget forecast the need for an appropriation of $99 mil ion for 7(a)

70 GAO, Patriot Express: SBA Should Evaluate the Program and Enhance Eligibility Controls, GA)-13-727,
September 13, 2013, pp. i, 10, 16-20, 25-30, 46-49, at http://www.gao.gov/assets/660/657793.pdf (hereinafter GAO,
Patriot Express).
71 SBA, Office of Congressional and Legislative Affairs, “Correspondence with the authors,” February 21, 2014.
72 T he SBAExpress program’s fees are the same as the 7(a) loan program’s fees. SBAExpress loans of $150,000 or less
approved in FY2014 do not have an up -front, one-time loan guaranty fee, and these loans do not have an annual,
ongoing loan servicing fee. SBAExpress loans of $150,001 to the SBAExpress limit of $350,000, with a maturity of
one year or less, have a 0.25% up-front, one-time loan guaranty fee and a 0.52% annual, ongoing loan servicing fee.
SBAExpress loans of $150,001 to the SBAExpress limit of $350,000 , with a maturity over one year have a 3.0% up-
front, one-time loan guaranty fee and a 0.52% annual, ongoing loan servicing fee. T o qualify for a waiver of the 3.0%
up-front, one-time loan guaranty fee, the business must be 51% or more owned and controlled by an individual or
individuals in one or more of the following groups: veterans (other than dishonorably discharged); service-disabled
veterans; active duty military servicemembers participating in the military’s T ransition Assistance Program (T AP);
reservists and National Guard members; current spouse of any veteran, active duty servicemember, or any reservist or
National Guard member; or widowed spouse of a servicemember who died while in service or of a service-connected
disability. See SBA, “ SBA Announces New Measures to Help Get Small Business Loans Into the Hands of Veterans,”
November 8, 2013, at https://www.sba.gov/content/sba-announces-new-measures-help-get-small-business-loans-hands-
veterans; and SBA, “ Procedural Notice: SBA Veterans Advantage,” December 18, 2013, at https://www.sba.gov/sites/
default/files/lender_notices/5000-1299_0.pdf.
73 SBA, “SBA Announces New Measures to Help Get Small Business Loans Into the Hands of Veterans,” November 8,
2013, at https://www.sba.gov/content/sba-announces-new-measures-help-get-small-business-loans-hands-veterans.
74 U.S. Congress, House Committee on Small Business, Veterans Entrepreneurship Act of 2015, report to accompany
H.R. 2499, 114th Cong., 1st sess., June 25, 2015, H.Rept. 114-187 (Washington: GPO, 2015), p. 9. T he act also
increased the 7(a) program’s FY2015 authorization limit to $23.5 billion from $18.75 billion.
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credit subsidy costs in FY2020.75 Also, the SBA did not anticipate waiving this fee in FY2021
because the President’s FY2021 budget forecasts the need for an appropriation of $15 mil ion for
7(a) credit subsidy costs in FY2021.76 As mentioned, P.L. 116-136, the CARES Act, among other
provisions, eliminated the zero subsidy requirement to waive SBAExpress loan fees for veterans.
The SBAExpress program is designed to increase the availability of credit to smal businesses by
permitting lenders to use their existing documentation and procedures in return for receiving a
reduced SBA guaranty on loans.77 It provides a 50% loan guaranty on loan amounts up to
$350,000. In FY2020, the SBA approved 18,092 SBAExpress loans (42.8% of total 7(a) program
loan approvals) totaling $1.67 bil ion (7.4% of total 7(a) program amount approvals).78
The SBA also waived the up-front, one-time loan guaranty fee for smal er 7(a) loans (including
those to veterans) in FY2014, FY2015, FY2016, FY2017, and FY2018; and waived the annual
service fee for 7(a) loans of $150,000 or less made to smal businesses located in a rural area or a
HUBZone and reduce the up-front one-time guaranty fee for these loans from 2.0% to 0.6667%
of the guaranteed portion of the loan in FY2019.79
In FY2015 and FY2016, the SBA also waived 50% of the up-front, one-time loan guaranty fee on
al non-SBAExpress 7(a) loans to veterans exceeding $150,000. In FY2017, the SBA waived 50%
of the up-front, one-time loan guaranty fee on al non-SBAExpress 7(a) loans to veterans of
$150,001 to $500,000.80 In FY2018, the SBA waived 50% of the up-front, one-time loan guaranty
fee on al non-SBAExpress 7(a) loans to veterans of $150,001 to $350,000.81
Congressional Issues: Access
As mentioned, the SBA has indicated in both testimony at congressional hearings and in press
releases that it viewed the Patriot Express program and its own overal effort to enhance veterans’
access to capital as a success.82 For example, when the SBA announced its veterans’ fee waiver
for the SBAExpress program, it also announced that its lending to veteran-owned smal

75 SBA, “FY2020 Congressional Budget Justification and FY2018 Annual Performance Report,” pp. 31-33, at
https://www.sba.gov/sites/default/files/2019-04/
SBA%20FY%202020%20Congressional%20Justification_final%20508%20%204%2023%202019.pdf .
76 SBA, “FY2021 Congressional Budget Justification and FY2019 Annual Performance Report,” p. 29, at
https://www.sba.gov/document/report —congressional-budget-justification-annual-performance-report.
77 SBA, “T he SBA Express Pilot Program: Inspection Report,” June 1998, p. 3.
78 SBA, “SBA Lending Statistics for Major Programs (as of 9/30/2020).”
79 SBA, “SBA Information Notice: 7(a) Fees Effective on October 1, 2018,” at https://www.sba.gov/document/
information-notice-5000-180010-7a-fees-effective-october-1-2018. T he SBA waived the up-front, one-time loan
guaranty fee and ongoing servicing fee for 7(a) loans of $150,000 or less approved in FY2014 , FY2015, and FY2016;
waived the up-front, one-time loan guaranty fee for 7(a) loans of $150 ,000 or less approved in FY2017; and waived the
up-front, one-time loan guaranty fee for 7(a) loans of $125,000 or less approved in FY2018 as a means to encourage
the demand for smaller 7(a) loans.
80 SBA, “SBA Information Notice: SBA Veterans Advantage – Renewal and Expansion of Fee Relief,” September 19,
2014, at https://www.sba.gov/sites/default/files/lender_notices/5000-1319.pdf; SBA, “ SBA Information Notice: SBA
Veterans Advantage – Renewal and Expansion of Fee Relief,” September 30, 2015, at https://www.sba.gov/sites/
default/files/lender_notices/5000-1354.pdf; and SBA, “ SBA Information Notice: Fees for 7(a) Loans Made to Veteran
Owned Small Businesses, Effective October 1, 2016 ,” September 28, 2016, at https://www.sba.gov/sites/default/files/
lender_notices/5000-1390.pdf.
81 SBA, “ SBA Information Notice: Fees for 7(a) Loans Made to Veteran Owned Small Businesses Effective October 1,
2017,” at https://www.sba.gov/sites/default/files/files/Notice_5000-1955_Veteran_Fees_FY18_1.pdf.
82 U.S. Congress, House Committee on Veterans’ Affairs, Status of Veterans Small Business, p. 75.
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businesses had nearly doubled since 2009 and that “in FY2013, SBA supported $1.86 bil ion in
loans for 3,094 veteran-owned smal businesses.”83
Congressional testimony provided by various veteran service organizations provides a somewhat
different perspective. The SBA’s self-evaluation of its success in assisting veterans access capital
has focused primarily on the agency’s efforts to streamline the loan application approval process
(e.g., minimizing paperwork requirements and reducing the time necessary for the SBA to review
and approve applications submitted by local lenders) and aggregate lending amounts (e.g., the
number and amount of loans approved). In contrast, veteran service organizations focus primarily
on program outcomes, especial y the likelihood of a veteran being approved for a SBA loan by a
local lender. For example, a representative of the American Legion testified at a congressional
hearing in 2010 that, at that time, being turned down for a SBA Patriot Express loan by a private
lender “is probably the largest, most frequent complaint that we receive from our business
owners.”84 At that same congressional hearing, a representative of the Vietnam Veterans of
America testified in response to that statement that “I would have to concur … in talking with
some of the veterans with regard to the Patriot Express Loan, they are having difficulties also to
acquire that capital. The rationale seems to be … the banks in general seem to be tightening the
credit, their lending practices, so that is … what we are hearing.”85 More recently, GAO reported
in 2013 that “selected loan recipients, lenders, and veteran service organizations said that a low
awareness of the Patriot Express program among the military community was among the most
frequently cited chal enges.”86
No empirical assessments of veterans’ experiences with either the SBA’s Patriot Express or
SBAExpress loan programs exist that would be useful for determining the relative ease or
difficulty for veteran-owned smal business owners of accessing capital through the SBA’s loan
programs. Since 2010, many lenders report that they have eased their credit standards, at least
somewhat, for smal business loans, suggesting the experiences of veterans seeking a SBA loan
guaranty today may be improved compared with their experiences in 2010. However, GAO found
in 2013 that many veterans were not fully aware of the SBA’s Patriot Express program and that
“over half of the Patriot Express loan recipients, six of the eight lenders, and two veteran service
organizations … said that [the] SBA could do more to increase outreach to veteran entrepreneurs
and better market the program to the military community.”87 GAO reported that low awareness of
the SBA’s Patriot Express program and the SBA’s participating lenders were a continuing
chal enge for the SBA.88
One option to provide additional information concerning veterans’ experiences with the SBA’s
lenders would be to survey veterans who have received a SBA guaranteed loan. The survey could
include questions concerning these veterans’ views of the programs, including the application
process. However, obtaining a comprehensive list of veterans to survey who have been turned
down for a SBA guaranteed loan by a private lender would be difficult given privacy concerns.
In a related development concerning veterans’ access to capital, legislation was introduced during
the 114th Congress (S. 1870, the Veterans Entrepreneurial Transition Act of 2015, and its House
companion bil , H.R. 3248) to authorize a three-year pilot program, administered by the SBA, to

83 SBA, “SBA Announces New Measures to Help Get Small Business Loans Into the Hands of Veterans,” November 8,
2013, at https://www.sba.gov/content/sba-announces-new-measures-help-get-small-business-loans-hands-veterans.
84 U.S. Congress, House Committee on Veterans’ Affairs, Status of Veterans Small Business, p. 17.
85 U.S. Congress, House Committee on Veterans’ Affairs, Status of Veterans Small Business, p. 17.
86 GAO, Patriot Express, p. 33.
87 GAO, Patriot Express, p. 33.
88 GAO, Patriot Express, p. 33.
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provide grants to no more than 250 GI-Bil benefit-eligible veterans to start or acquire a
qualifying business. The grant amount would have been calculated according to a formula related
to the unused portion of the recipient’s GI-Bil benefits. Recipients would have been required to
complete specified training and meet other program requirements, such as having an approved
business plan. S. 1870 was ordered to be reported with an amendment in the nature of a substitute
by the Senate Committee on Smal Business and Entrepreneurship on July 29, 2015.
In addition, H.R. 5698, the Strengthening Technical Assistance, Resources, and Training to
Unleash the Potential of Veterans Act of 2016 (STARTUP Vets Act of 2016), and its companion
bil in the Senate, S. 2273, would have authorized the SBA to provide up to $1.5 mil ion in grants
annual y “from amounts made available to the Office of Veterans Business Development” to
organizations to create and operate business incubators and accelerators that provide technical
assistance and training to veterans (including their spouses and dependents) to enable them “to
effectively transfer relevant skil s to launch and accelerate smal business concerns owned and
controlled by covered individuals; and to create an avenue for high-performing covered
individuals to meet and collaborate on business ideas.”89
During the 115th Congress, S. 1056, the Veteran Smal Business Export Promotion Act, and H.R.
2835, To amend the Smal Business Act, would have permanently waived “the guarantee fee for
loans of not more than $150,000 provided to veterans and spouses of veterans under the [SBA’s]
Export Working Capital, International Trade, and Export Express programs.”
During the 116th Congress, S. 2138, the Smal -Dollar and Veterans Loans Enhancement Act,
would, to the extent that costs are offset by appropriations, authorize the elimination or reduction
of fees to the maximum extent possible for SBAExpress loans to veterans and their spouses and
for 7(a) loans of $150,000 or less.
Federal Contracting Goals for Service-Disabled
Veteran-Owned Small Businesses
Since 1978, federal agency heads have been required to establish federal procurement contracting
goals, in consultation with the SBA, “that realistical y reflect the potential of smal business
concerns” to participate in federal procurement. Each agency is required, at the conclusion of
each fiscal year, to report its progress in meeting the goals to the SBA.90 The SBA negotiates the
goals with each federal agency and establishes a small business eligible baseline for evaluating
the agency’s performance.
The smal business eligible baseline excludes certain contracts that the SBA has determined do
not realistical y reflect the potential for smal business participation in federal procurement, such
as contracts awarded to mandatory and directed sources, awarded and performed overseas, funded
predominately from agency-generated sources, not covered by Federal Acquisition Regulations,
and not reported in the General Services Administration’s (GSA’s) Federal Procurement Data
System–Next Generation (FPDS-NG) database (e.g., government procurement card purchases or
contracts valued less than $10,000).91 These exclusions typical y account for 18% to 20% of al
federal prime contracts each year.

89 H.R. 5698, Section 3. Incubator and accelerator grant program.
90 P.L. 95-507, a bill to amend the Small Business Act and the Small Business Investment Act of 1958.
91 See SBA, Office of Policy, Planning & Liaison, Office of Government Contracting & Business Development, “FY
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Using FPDS-NG data, which are published in the GSA’s annual Smal Business Goaling Report,
the SBA evaluates the agencies’ performance against their negotiated goals and presents the
results in the SBA’s annual Smal Business Procurement Scorecards. Each agency that fails to
achieve any proposed prime or subcontract goal is required to submit a justification to the SBA on
why it failed to achieve a proposed or negotiated goal, with a proposed plan of corrective action.92
Over the years, federal government-wide procurement contracting goals have been established for
smal businesses general y (P.L. 100-656, the Business Opportunity Development Reform Act of
1988, and P.L. 105-135, the HUBZone Act of 1997—Title VI of the Smal Business
Reauthorization Act of 1997); smal businesses owned and controlled by social y and
economical y disadvantaged individuals (P.L. 100-656); women (P.L. 103-355, the Federal
Acquisition Streamlining Act of 1994); smal businesses located within a Historical y
Underutilized Business Zone, or HUBZone (P.L. 105-135); and smal businesses owned and
controlled by a service-disabled veteran (P.L. 106-50, the Veterans Entrepreneurship and Smal
Business Development Act of 1999).
The current federal smal business contracting goals are
 at least 23% of the total value of al smal business eligible prime contract awards
to smal businesses for each fiscal year;
 5% of the total value of al smal business eligible prime contract awards and
subcontract awards to smal disadvantaged businesses for each fiscal year;
 5% of the total value of al smal business eligible prime contract awards and
subcontract awards to women-owned smal businesses;
 3% of the total value of al smal business eligible prime contract awards and
subcontract awards to HUBZone smal businesses; and
 3% of the total value of al smal business eligible prime contract awards and
subcontract awards to service-disabled veteran-owned smal businesses.93
There are no punitive consequences for not meeting the smal business procurement goals.
However, the SBA’s Smal Business Procurement Scorecards and GSA’s Smal Business Goaling
Report are distributed widely, receive media attention, and heighten public awareness of the issue
of smal business contracting. For example, agency performance as reported in the SBA’s Smal
Business Procurement Scorecards is often cited by Members during their questioning of federal
agency witnesses during congressional hearings.
As shown in Table 5, the FY2019 Small Business Goaling Report indicates that federal agencies
met the federal contracting goal for smal businesses general y, smal disadvantaged businesses,
women-owned smal businesses, and service-disabled veteran-owned smal businesses in
FY2019. Table 5 also provides, for comparative purposes, the percentage of total reported federal
contracts (without exclusions) awarded to those smal businesses in FY2019.

2018 Goaling Guidelines,” August 30, 2017, p. 4, at https://www.sba.gov/sites/default/files/2018-06/
FY18_Small_Business_Goaling_Guidelines.pdf; and U.S. General Services Administration (GSA), Federal
Procurement Data System—Next Generation, “ What’s In FPDS-NG,” at https://www.fpds.gov/wiki/index.php/FPDS-
NG_FAQ.
92 SBA, Office of Policy, Planning & Liaison, Office of Government Contracting & Business Development, “FY 2018
Goaling Guidelines,” August 30, 2017, p. 6, at https://www.sba.gov/sites/default/files/2018-06/
FY18_Small_Business_Goaling_Guidelines.pdf.
93 15 U.S.C. §644(g)(1)-(2).
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Table 5. Federal Contracting Goals and Percentage of FY2019 Federal Contract
Dollars Awarded to Small Businesses, by Type
Percentage of Federal
Percentage of Federal
Contracts (small
Contracts (all
Business Type
Federal Goal
business eligible)
reported contracts)
Smal Businesses
23.0%
25.82%
22.21%
Smal Disadvantaged
5.0%
10.13%
8.69%
Businesses
Women-Owned Smal
5.0%
5.04%
4.32%
Businesses
HUBZone Smal Businesses
3.0%
2.23%
1.95%
Service-Disabled Veteran-
3.0%
4.34%
4.00%
Owned Smal Businesses
Sources: SBA, “Statutory Guidelines,” at https://www.sba.gov/content/statutory-guidelines-0 (federal goals); U.S.
General Services Administration, Federal Procurement Data System—Next Generation, “Smal Business Goaling
Report: Fiscal Year 2019,” at https://www.fpds.gov/downloads/top_requests/FPDSNG_SB_Goaling_FY_2019.pdf;
and U.S. General Services Administration, Federal Procurement Data System—Next Generation, at
https://www.fpds.gov/fpdsng/ (contract dol ars).
Notes: The Smal Business Goaling Report for FY2019 was made available online on August 12, 2020. The
report does not indicate when the data were generated. The report indicates that smal busin ess eligible
contracts totaled $501.58 bil ion and that $129.5 bil ion was awarded to smal businesses, $50.8 bil ion to smal
disadvantaged businesses, $25.3 bil ion to women-owned smal businesses, $11.2 bil ion to SBA-certified
HUBZone smal businesses, and $21.8 bil ion to service-disabled veteran-owned smal businesses. The
percentages provided in the column for al reported contracts in FY2019 were calculated using FPDS-NG data as
reported on August 12, 2020: $589.5 bil ion in total contracts; $131.0 bil ion to smal businesses, $51.3 bil ion to
smal disadvantaged businesses, $25.5 bil ion to women-owned smal businesses, $11.5 bil ion to SBA-certified
HUBZone smal businesses, and $23.6 bil ion to service-disabled veteran-owned smal businesses.
In a related development, on November 17, 2015, the House passed H.R. 1694, the Fairness to
Veterans for Infrastructure Investment Act of 2015. The bil would have revised the requirement
that 10% of the award of contracts for federal-aid highway, federal public transportation, and
highway safety research and development programs be set-aside for smal businesses owned and
controlled by social y and economical y disadvantaged individuals. The bil would have required
the set-aside to include veteran-owned smal businesses.
In another related development, the U.S. Supreme Court’s decision in Kingdomware
Technologies, Inc. v. United States (decided on June 16, 2016) requiring the VA to grant VOSBs
certain preferences when awarding procurement contracts could result in the VA awarding
additional contracts to VOSBs.
In addition, the prevention of fraud in federal smal business contracting programs, and in the
SBA’s loan programs as wel , has been a priority for both Congress and the SBA for many years,
primarily because reports of fraud in these programs emerge with some regularity.94 Of particular

94 For example, see GAO, Small Business Administration: Undercover Tests Show HUBZone Program Remains
Vulnerable to Fraud and Abuse, GAO-10-920T , July 28, 2010, at http://www.gao.gov/assets/130/125130.pdf; GAO,
8(a) Program : Fourteen Ineligible Firm s Received $325 Million in Sole-Source and Set-Aside Contracts, GAO-10-425,
March 30, 2010, at http://www.gao.gov/assets/310/302472.pdf; GAO, Service-Disabled Veteran-Owned Sm all
Business Program : Case Studies Show Fraud and Abuse Allowed Ineligible Firm s to Obtain Millions of Dollars in
Contracts, GAO-10-108, October 23, 2009, at http://www.gao.gov/products/GAO-10-108; and GAO, Service-Disabled
Veteran-Owned Sm all Business Program : Vulnerability to Fraud and Abuse Rem ains, GAO-12-697, August 1, 2012, at
http://www.gao.gov/assets/600/593238.pdf.
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interest to veterans, GAO has found that “the lack of an effective government-wide fraud-
prevention program” has left the service-disabled veteran-owned smal business program
“vulnerable to fraud and abuse.”95
Under the Smal Business Act, a smal business owned and controlled by a service-disabled
veteran can qualify for a federal government procurement set-aside (a procurement in which only
certain businesses may compete) or a sole-source award (awards proposed or made after
soliciting and negotiating with only one source) if the smal business is at least 51%
unconditional y and directly owned and controlled by one or more service-disabled veteran.96 A
veteran is defined as a person who has served “in the active military, naval, or air service, and
who was discharged or released under conditions other than dishonorable.”97 A disability is
service related when it “was incurred or aggravated .. in [the] line of duty in the active military,
naval, or air service.”98
Federal agencies may set aside procurements for service-disabled veteran-owned smal businesses
only if the contracting officer reasonably expects that offers wil be received from at least two
responsible smal businesses and the award wil be made at a fair market price (commonly known
as the “rule of two” because of the focus on there being at least two smal businesses involved).99
Federal agencies may award sole contracts to service-disabled veteran-owned smal businesses
when (1) the contracting officer does not reasonably expect that two or more service-disabled
veteran-owned smal businesses wil submit offers; (2) the anticipated award wil not exceed $4.0
mil ion ($6.5 mil ion for manufacturing contracts); and (3) the award can be made at a fair and
reasonable price.100 Otherwise, sole-source awards may only be made to service-disabled veteran-
owned smal businesses under other authority, such as the Competition in Contracting Act.101
Service-disabled veteran-owned smal businesses are not eligible for price evaluation preferences
in unrestricted competitions.
The VA is statutorily required to establish annual goals for the awarding of VA contracts to both
service-disabled veteran-owned smal businesses and smal businesses owned by other
veterans.102 The VA is authorized to use “other than competitive procedures” in meeting these
goals. For example, it may award any contract whose value is below the simplified acquisition
threshold (general y $250,000) to a veteran-owned business on a sole-source basis, and it may
also make sole-source awards of contracts whose value (including options) is between $250,000

95 GAO, Service-Disabled Veteran-Owned Small Business Program: Preliminary Information on Actions Taken by
Agencies to Address Fraud and Abuse and Rem aining Vulnerabilities, GAO-11-589T , July 28, 2011, p. 3, at
http://www.gao.gov/products/GAO-11-589T .
96 15 U.S.C. §632(q)(1) & (4); P.L. 108-183, the Veterans Benefits Act of 2003; and P.L. 109-461, the Veterans
Benefits, Health Care, and Information Technology Act of 2006 .
97 38 U.S.C. §101(2).
98 38 U.S.C. §101(16).
99 15 U.S.C. §657f(b).
100 15 U.S.C. §657f(a)(1)-(3) (statutory requirements); and 48 C.F.R. §19.1406(a) (increasing the price thresholds).
101 10 U.S.C. §2304(c)(1)-(7) (procurements of defense agencies); and 41 U.S.C. §3304(a)(1)-(7) (procurements of
civilian agencies). See also 48 C.F.R. §§6.302-1 to 6.302-7.
102 P.L. 109-461 and P.L. 110-389, the Veterans’ Benefits Improvements Act of 2008. In FY2019, the Department of
Veterans Affairs’ small business procurement goals are 29.6% for small businesses generally, 17.0% for veteran -owned
small businesses, 15.0% for service-disabled veteran-owned small businesses, 5.0% for small disadvantaged businesses
(including Section 8(a)), 5.0% for women-owned small businesses, and 3.0% for Historically Underutilized Business
Zone (HUBZone) small businesses. See T he Department of Veterans Affairs, “ Small Business Program Goals and
Accomplishments,” at https://www.va.gov/osdbu/library/accomplishments.asp.
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and $5 mil ion, provided that certain conditions are met. When these conditions are not met, the
VA is general y required to set aside the contract for service-disabled or other veteran-owned
smal businesses.
Service-disabled veteran-owned smal businesses can general y self-certify as to their eligibility
for contracting preferences available under the Smal Business Act.103 However, in an effort to
address fraud in VA contracting, veteran-owned and service-disabled veteran-owned smal
businesses must be listed in the VA’s VetBiz database and have their eligibility verified by the VA
to be eligible for preferences in certain VA contracts.104
Businesses that fraudulently misrepresent their size or status have long been subject to civil and
criminal penalties under Section 16 of the Smal Business Act; SBA regulations implementing
Section 16; and other provisions of law, such as the False Claims Act, Fraud and False Statements
Act, Program Fraud Civil Remedies Act, and Contract Disputes Act.105
Several bil s were introduced during the 112th Congress to address fraud in smal business
contracting programs in various ways. Of particular interest to veterans, S. 3572, the Restoring
Tax and Regulatory Certainty to Smal Businesses Act of 2012, and S. 633, the Smal Business
Contracting Fraud Prevention Act of 2011, would have, among other changes, amended Section
16 of the Smal Business Act to expressly include service-disabled veteran-owned smal
businesses among the types of smal businesses subject to penalties for fraud under that section.106
The bil s would also have required service-disabled veteran-owned smal businesses to register in
the VA’s VetBiz database, or any successor database, and have their status verified by the VA to
be eligible for contracting preferences for service-disabled veteran-owned smal businesses under
the Smal Business Act.
During the 113th Congress, S. 2334, the Improving Opportunities for Service-Disabled Veteran-
Owned Smal Businesses Act of 2013, and its companion bil in the House, H.R. 2882, and H.R.
4435, the Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015,
which was passed by the House on May 22, 2014, included a provision that would have
authorized the transfer of the VetBiz database’s administration and the verification of service-
disabled veteran owned smal businesses from the VA to the SBA.
Advocates of requiring service-disabled veteran-owned smal businesses to register in the VetBiz
database and have their status verified by the VA (or the SBA) to be eligible for contracting
preferences under the Smal Business Act argue that doing so would reduce fraud.107 As then-

103 13 C.F.R. §125.15.
104 38 U.S.C. §8127(a)(1)(A). P.L. 109-461 requires the Secretary of Veterans Affairs to “establish a goal for each
fiscal year for participation in Department contracts (including subcontracts) ” by veteran-owned small businesses. T he
Secretary is also required to establish a separate goal for the participation of service-disabled veteran-owned small
businesses in agency contracts and subcontracts. 38 U.S.C. §8127(a)(1)(A). However, the latter goal can be no less than
the government -wide goal for the percentage of contract and subcon tract dollars awarded to service-disabled veteran-
owned small businesses given in Section 15(g)(1) of the Small Business Act (currently 3%), while the former goal is
within the Secretary’s discretion. See 38 U.S.C. §8127(a)(2)-(3).
105 See 15 U.S.C. §645; and 13 C.F.R. §125.29.
106 Currently, Section 36 of the Small Business Act, which governs set -asides and sole-source awards for service-
disabled veteran-owned small businesses, provides that “ [r]ules similar to the rules of paragraphs (5) and (6) of Section
637(m) of this title shall apply for purposes of this section.” Section 8(m) governs set -asides for women-owned small
businesses and itself provides that such businesses are subject to penalties for fraud under Section 16. T hus, an
argument could potentially be made that service-disabled veteran-owned small businesses are currently subject to
penalties under Section 16 even if they are not expressly included there.
107 See 13 C.F.R. §§125.9-125.13.
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Senator Snowe stated on the Senate floor when she introduced S. 633, “Our legislation attempts
to remedy the spate of il egitimate firms siphoning away contracts from the rightful businesses
trying to compete within the SBA’s contracting programs.”108
Others worry that requiring service-disabled veteran-owned smal businesses to register in the
VetBiz database and have their status verified by the VA (or the SBA) to be eligible for
contracting preferences under the Smal Business Act may add to the paperwork burdens of smal
businesses. They seek alternative ways to address the need to reduce fraud in federal smal
business procurement programs that do not increase the paperwork requirements of smal
businesses.109 Stil others note that the effectiveness of any change to prevent fraud in veteran-
owned and service-disabled veteran-owned smal business procurement programs largely depends
upon how the change is implemented. For example, in July 2011, the VA’s Office of Inspector
General concluded that the VA’s implementation of its veteran-owned and service-disabled
veteran-owned smal business procurement fraud prevention programs needed improvement:
We project that VA awarded ineligible businesses at least 1,400 VOSB [Veteran Owned
Small Business] and SDVOSB [Service-Disabled Veteran Owned Small Business]
contracts valued at $500 million annually and that it will award about $2.5 billion in VOSB
and SDVOSB contracts to ineligible businesses over the next 5 years if it does not
strengthen oversight and verification procedures. VA and the Office of Small and
Disadvantaged Business Utilization (OSDBU) need to improve contracting officer
oversight, document reviews, completion of site visits for “high-risk” businesses, and the
accuracy of VetBiz Vendor Information Pages information.110
As mentioned, P.L. 116-283, the National Defense Authorization Act for Fiscal Year 2021,
included a provision that requires the verification of SDVOSBs to be transferred from the VA to
the SBA within two years of enactment (VA wil continue to verify the individual’s status as a
veteran or a service-disabled veteran and the SBA wil verify that the business is smal ). In
addition, SDVOSBs wil no longer be al owed to self-certify their status when bidding on a
federal contract with a SDVOSB contracting preference (e.g., a set-aside or sole source contract).
Instead, they wil have to be SBA-certified prior to the contact’s approval.
The Military Reservist Economic Injury Disaster
Loan Program
P.L. 106-50, the Veterans Entrepreneurship and Smal Business Development Act of 1999, signed
into law on August 17, 1999, authorized the SBA’s Military Reservist Economic Injury Disaster
Loan (MREIDL) program. The SBA published the final rule establishing the program in the
Federal Register on July 25, 2001, with an effective date of August 24, 2001.111

108 Senator Olympia Snowe, “Statements on Introduced Bills and Joint Resolutions,” remarks in the Senate,
Congressional Record, vol. 157, part no. 41 (March 17, 2011), p. S1843.
109 U.S. Congress, House Committee on Oversight and Government Reform, Subcommittee on T echnology,
Information Policy, Intergovernmental Relations and Procurement Reform, Jobs for Wounded Warriors: Increasing
Access to Contracts for Service Disabled Veterans, 112th Cong., 2nd sess., February 7, 2012, Serial No. 112 -143
(Washington: GPO, 2012), pp. 86-90.
110 U.S. Department of Veterans Affairs, Office of Inspector General, “ Audit of Veteran-Owned and Service-Disabled
Veteran-Owned Small Business Programs,” July 25, 2011, p. i, at http://www.va.gov/oig/52/reports/2011/VAOIG-10-
02436-234.pdf.
111 SBA, “Military Reservist Economic Injury Disaster Loans,” 66 Federal Register 38528-38531, July 25, 2001.
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The Senate Committee on Smal Business provided, in its committee report on the Veterans
Entrepreneurship and Smal Business Development Act of 1999, the following reasons for
supporting the authorization of the MREIDL Program:
During and after the Persian Gulf War in the early 1990’s, the Committee heard from
reservists whose businesses were harmed, severely crippled, or even lost, by their absence.
Problems faced by reservists called to active duty and their small businesses were of a
varied nature and included cash-flow problems, difficulties with training an appropriate
alternate manager on very short notice to run the business during the period of service, lost
clientele upon return, and on occasion, bankruptcy. These hardships can o ccur during a
period of national emergency or during a period of contingency operation when troops are
deployed overseas.
To help such reservists and their small businesses, the Committee seeks to provide credit
and management assistance to small businesses when an essential employee (i.e., an owner,
manager or vital member of the business’ staff) is a reservist called to active duty. The
Committee believes that financial assistance in the form of loans, loan deferrals and
managerial guidance are effective ways to minimize the adverse financial demands of the
call to active duty. They not only ameliorate financial difficulties but also strengthen smal
businesses.112
The House Committee on Smal Business also supported the program’s authorization, indicating
in its committee report that the program
will also fulfill a long unmet need to assist our military reservists who are small business
owners. Often these individuals, called to service at short notice, come back from fighting
to protect our freedoms only to find their businesses in shambles. H.R. 1568 will establish
loan deferrals, technical and managerial assistance, and loan programs for these citizen
soldiers so that while they risk their lives they need not risk their livelihoods.113
As mentioned, the SBA provides direct loans for owners of businesses of al sizes, homeowners,
and renters to assist their recovery from natural disasters. The SBA’s MREIDL program provides
disaster assistance in the form of direct loans of up to $2 mil ion to help smal business owners
who are not able to obtain credit elsewhere to (1) meet ordinary and necessary operating expenses
that they could have met but are not able to meet; or (2) enable them to market, produce, or
provide products or services ordinarily marketed, produced, or provided by the business that
cannot be done because an essential employee (including the owner) has been cal ed up to active
duty in his or her role as a military reservist or member of the National Guard due to a period of
military conflict.114 Under specified circumstances, the SBA may waive the $2 mil ion limit (e.g.,
the smal business is in immediate danger of going out of business, is a major source of
employment, employs 10% or more of the workforce within the commuting area in which the
business is located).115

112 U.S. Congress, Senate Committee on Small Business, Veterans Entrepreneurship and Small Business Development
Act of 1999, report to accompany H.R. 1568, 106th Cong., 1st sess., August 4, 1999, S.Rept. 106-136 (Washington:
GPO, 1999), p. 4.
113 U.S. Congress, Senate Committee on Small Business, Veterans Entrepreneurship and Small Business Development
Act of 1999, report to accompany H.R. 1568, 106th Cong., 1st sess., August 4, 1999, S.Rept. 106-136 (Washington:
GPO, 1999), p. 15.
114 SBA, “Disaster Assistance Program: SOP 50-30-7,” May 13, 2011, p. 48, at https://www.sba.gov/sites/default/files/
sops/SOP%2050%2030%207.pdf; and 13 C.F.R. §123.508. For further information and analysis concerning the SBA’s
disaster assistance loan program, see CRS Report R41309, The SBA Disaster Loan Program : Overview and Possible
Issues for Congress, by Bruce R. Lindsay.
115 13 C.F.R. §123.507.
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P.L. 106-50 defines an essential employee as “an individual who is employed by a smal business
concern and whose managerial or technical expertise is critical to the successful day-to-day
operations of that smal business concern.”116 The act defines a military conflict as (1) a period of
war declared by Congress; or (2) a period of national emergency declared by Congress or the
President; or (3) a period of contingency operation. A contingency operation is designated by the
Secretary of Defense as an operation in which our military may become involved in military
actions, operations, or hostilities (peacekeeping operations).117
The SBA is authorized to make such disaster loans either directly or in cooperation with banks or
other lending institutions through agreements to participate on an immediate or deferred basis.
The loan term may be up to a maximum of 30 years and is determined by the SBA in accordance
with the borrower’s ability to repay the loan. The loan’s interest rate is the SBA’s published
interest rate for an Economic Injury Disaster Loan at the time the application for assistance is
approved by the SBA. Economic Injury Disaster Loan interest rates may not exceed 4%.
The SBA is not required by law to require collateral on disaster loans. However, the SBA has
established collateral requirements for disaster loans based on “a balance between protection of
the Agency’s interest as a creditor and as a provider of disaster assistance.”118 The SBA general y
does not require collateral to secure a MREIDL loan of $50,000 or less. Larger loan amounts
require collateral, but the SBA wil not decline a request for a MREIDL loan for a lack of
collateral if the SBA is reasonably certain the borrower can repay the loan.119
The SBA disbursed one MREIDL loan in FY2014, none in FY2015, three in FY2016, three in
FY2017, two in FY2018, two in FY2019, and two in FY2020. Since the MREIDL’s inception
through September 30, 2020, the SBA has disbursed 358 MREIDL loans amounting to $33.3
mil ion. Of these 358 loans, 62 loans totaling $5.9 mil ion have been charged off (a declaration
that the debt is unlikely to be collected) by the SBA.120
Because the MREIDL program is relatively smal and noncontroversial, this report does not
present a discussion of the congressional issues affecting the program.
Concluding Observations
Congress has demonstrated a continuing interest in federal programs designed to assist veterans
transition from military to civilian life. For example, the SBA’s veteran business development
programs, loan guaranty programs, and federal procurement programs for smal businesses
general y, including service-disabled veteran-owned smal businesses, have al been subject to
congressional hearings during the past several Congresses. Also, as has been discussed, several

116 P.L. 106-50, the Veterans Entrepreneurship and Small Business Development Act of 1999, Section 402. Assistance
T o Active Duty Military Reservists; and 15 U.S.C. §636(b). T he SBA’s Military Reservist Economic Injury Disaster
Loan Program applies to economic injury suffered or likely to be suffered as the result of a period of military conflict
occurring or ending on or after March 24, 1999.
117 P.L. 106-50, Section 402 and 15 U.S.C. §636(c).
118 SBA, “Disaster Assistance Program: SOP 50-30-7,” May 13, 2011, p. 152, at https://www.sba.gov/sites/default/
files/sops/SOP%2050%2030%207.pdf.
119 13 C.F.R. §123.513.
120 SBA, Office of Congressional and Legislative Affairs, “Correspondence with the authors,” January 13, 2017,
January 10, 2018, August 27, 2019, and March, 2021. In FY2011, the SBA disbursed 10 MREIDL loans amounting to
$1.15 million. In FY2012, the SBA disbursed seven MREIDL loans amounting to $834,300 . In FY2013, the SBA
disbursed three MREIDL loans amounting to $121,200.
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bil s have been introduced in recent Congresses to address the SBA’s management of these
programs and fraud.
Given the many factors that influence business success, measuring the effectiveness of the SBA’s
veteran assistance programs, especial y the programs’ effect on veteran job retention and creation,
is both complicated and chal enging. For example, it is difficult to determine with any degree of
precision or certainty the extent to which any changes in the success of a smal business result
primarily from that business’s participation in the SBA’s programs or from changes in the
broader economy. That task is made even more chal enging by the absence of performance
outcome measures that could serve as a guide. In most instances, the SBA uses program
performance measures that focus on indicators that are primarily output related, such as the
number and amount of loans approved for veteran-owned smal businesses and the number and
amount of federal contracts awarded to service-disabled veteran-owned smal businesses.
Both GAO and the SBA’s Office of Inspector General have recommended that the SBA adopt
more outcome-related performance measures for the SBA’s loan guaranty programs, such as
tracking the number of borrowers that remain in business after receiving a SBA guaranteed loan
to measure the extent to which the SBA contributed to their ability to stay in business.121 Other
performance-oriented measures that Congress might also consider include requiring the SBA to
survey veterans who participate in its business development programs or who have received a
SBA guaranteed loan. This survey could provide information related to the difficulty the veterans
experienced in obtaining a loan from the private sector, their experiences with the SBA’s loan
application process, and the role the SBA loan had in creating or retaining jobs. The SBA could
also survey service-disabled veteran-owned smal businesses that were awarded a federal contract
to determine the extent to which the SBA was instrumental in their receiving the award and the
extent to which the award contributed to their ability to create jobs or expand their scope of
operations.

Author Information

Robert Jay Dilger
Sean Lowry
Senior Specialist in American National Government Analyst in Public Finance

121 GAO, Small Business Administration: 7(a) Loan Program Needs Additional Performance Measures, GAO-08-
226T , November 1, 2007, p. 2, http://www.gao.gov/new.items/d08226t.pdf; and SBA, Office of the Inspector General,
SBA’s Adm inistration of the Microloan Program under the Recovery Act, December 28, 2009, pp. 6, 7,
https://www.sba.gov/content/rom-10-10-sbas-administration-microloan-program-under-recovery-act.
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