How Do I Qualify for a Revolving Loan Fund From the Veterans Administration

By Sara Melone

A revolving loan fund, or revolving fund loan, is a program that is managed at the state level, according to the code of Federal Regulations Title 31. Individual states have the authority to distribute allocated funds from a revolving pool to support small businesses or federal assistance programs. Fund managers typically invest the money so it earns income until loans are made. Borrowers usually must pay back the funds within a set period of time and are sometimes expected to pay interest on the loan amount. A revolving loan fund program is offered through the Department of Veterans Affairs, former the Department of Veterans Administration.

Verify you meet the requirements to be considered a veteran to qualify for a revolving loan from Veterans Affairs, such as the revolving micro-loan fund established by the Connecticut General Assembly. This type of loan provides funds for veteran-owned small businesses to meet start-up costs or daily business operation expenses. Section 27-103 of the Connecticut general statutes defines a veteran as an individual honorably discharged from active service in the armed forces, which covers the Army, Marines, Navy, Coast Guard, National Guard or Air Force.

Determine whether your ownership in the business amounts to at least 51 percent of total ownership. In most cases, loans can be made only to veteran-owned businesses. Ensure you are actively involved in the daily business operations and have the power and authority to direct the policies and procedures pertaining to business affairs.

Submit a loan application. In the case of the Connecticut revolving micro-loan fund, apply to the state's commissioner of economic and community development. Include all required information concerning the nature of the business's operation and ownership as well as that regarding any collateral or interest used to secure the loan.

Contact a Veterans Affairs representative to see if you qualify for any other types of revolving loans aside from business loans. For example, the Vocational Rehabilitation and Employment Plan offered through Veterans Affairs notes that plan participants may be entitled to receive a small short-term loan in certain circumstances. Provide all financial documentation a case manager requests to show you are experiencing temporary financial difficulty that can be remedied with this type of loan. The loan typically is repaid through deductions from your compensation checks over a period of 10 months.

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