For many veterans, entrepreneurship is a natural extension of military service. Leadership, discipline, and resilience developed in uniform translate well to small business ownership, allowing veterans to continue contributing to their communities as employers and economic leaders. Despite these strengths, veterans continue to face persistent and well-documented barriers when seeking the capital needed to start or grow a business.
Veteran-owned businesses remain a vital part of the U.S. economy. The U.S. Census Bureau noted that a 2023 Annual Business Survey (ABS), which covers the reference year 2022, found that 273,542 (4.7%) of the 5.9 million U.S. employer firms were veteran-owned (Census Bureau 2024 Business Owner Data—Veteran Firms, 2024). Furthermore, veteran-owned businesses were found to generate $922 billion in revenue, “about 5.3% of the total $17.4 trillion of all classifiable employer businesses in 2021” (Veteran-Owned Businesses Profile—Census Bureau, 2024).
However, the share of U.S. businesses owned by veterans has declined sharply over the past decade, from 11 percent in 2014 to 8.1 percent by 2020, according to the Small Business Administration Office of Advocacy (2023). This downward trend is not the result of diminished interest or capability among veterans, but rather systemic obstacles that make entrepreneurship harder after military service.
Access to financing is among the most significant of these challenges. Studies consistently show that veteran entrepreneurs are approved for business loans at lower rates than non-veterans (Federal Reserve Banks Small Business Credit Survey, 2023). Many are forced to rely on personal savings or delay expansion plans due to limited financing options. Surveys indicate that roughly three-quarters of veterans cite access to capital as a top obstacle when starting or expanding a business, according to the Institute for Veterans and Military Families at Syracuse University (2025), even when their business models are sound.
Financial institutions with deep ties to military and veteran communities are often well-positioned to help address this gap. Credit unions operate as not-for-profit, member-owned institutions with a local focus and a long history of serving service members and their families. These institutions frequently understand the unique circumstances veterans face during the transition to civilian life. Yet existing federal regulations can restrict their ability to meet demand for veteran small business lending (DCUC and The American Legion VMBLA Congressional Letter, 2026).
Under federal law (12 U.S.C. § 1757a), credit unions are subject to a cap on member business lending set at 12.25 percent of total assets. Once that cap is reached, additional business loans, regardless of borrower qualifications, cannot be made. As a result, well-qualified veteran entrepreneurs may be turned away not because of risk, but because of an arbitrary limit that bears little connection to current economic conditions.
The Veterans Member Business Loan Act, VMBLA (H.R. 507, S. 110), addresses this issue by exempting loans made to veteran-owned businesses from the lending cap, while preserving all existing safety and soundness requirements. The legislation does not weaken oversight, reduce underwriting standards, or create new federal spending. Instead, it allows credit unions to use their own capital to responsibly expand lending to veteran entrepreneurs.
This approach is not without precedent. Federal law already provides exemptions from the lending cap for certain categories of loans, including residential mortgages and agricultural lending, recognizing their importance to broader economic stability. Supporters argue that veteran-owned businesses warrant similar treatment given their contributions to job creation, local economic growth, and community resilience.
In an era when consensus can be elusive, lawmakers from both parties have acknowledged that expanding access to capital for veterans is a practical, nonpartisan goal. The measure focuses on removing a regulatory barrier rather than creating a new government program, offering a targeted solution that aligns with fiscal responsibility.
For veterans transitioning from military service, small business ownership is often more than a career choice. It is a way to continue serving, leading, and investing in the communities they call home. When access to capital is constrained by outdated rules, those opportunities are unnecessarily limited, and local economies feel the effects through lost jobs and stalled growth.
As policymakers look for ways to support veterans and strengthen small businesses, reforms that expand responsible access to capital deserve close attention.
The VMBLA offers a straightforward, budget-neutral policy option that addresses a clearly identified barrier facing veteran entrepreneurs. Ensuring that veterans have a fair opportunity to succeed in business is not just an economic issue. It is a continuation of the nation’s commitment to those who have served.
The American Legion is the largest U.S. veterans organization with more than 1.6 million members who strengthen the nation through programs, services, and advocacy for those who have served in the U.S. Armed Forces, youth, and communities.
The Defense Credit Union Council is the trusted resource for credit unions on all military and veteran matters. By maintaining a close and constant liaison with the Pentagon, Capitol Hill, and NCUA, DCUC champions the interests of credit unions serving our military and veteran communities by coordinating policy, procedures, and legislation impacting morale and welfare, financial readiness, and the delivery of quality financial products and services. Organized in 1963, DCUC’s membership is comprised of more than 200 credit unions with over 40 million members.
