SBA Doubles Veteran Contracting Goal to 10 Percent, Unveils $500,000 Drone Pilot

The Small Business Administration is doubling its federal contracting goal for veteran-owned small businesses to 10 percent — one of three veteran-focused policy changes announced Monday at a Washington, D.C. event headlined by Vice President J.D. Vance. Kelly Loeffler, who leads the SBA, unveiled the new target during a panel kicking off National Veterans Small Business Week. The event was sponsored by J.P. Morgan Chase and drew Rep. Roger Williams (R-TX), chairman of the House Small Business Committee.

How high does the new contracting goal go?

The 10 percent target marks a sharp break from recent baselines. A 1999 law, the Veterans Entrepreneurship and Small Business Development Act, historically set the procurement threshold at three percent for businesses owned by service-disabled veterans. Over the last two fiscal years, that goal nudged up to five percent for those companies — and the government hit it both years.

Administrations have adjusted these goals before. Under the Trump-led SBA, the agency reversed former President Joe Biden's initiative to award at least 15 percent of federal contracts to small disadvantaged businesses, returning that level to five percent. The new 10 percent goal for veteran-owned firms now sits at double the highest recent service-disabled-veteran benchmark. In plain terms: veteran-owned businesses just got a much bigger lane in federal procurement.

What is the $500,000 drone pilot?

Loeffler also announced a new $500,000 pilot program aimed at bolstering drone manufacturing. "This is kind of an all of America approach that the Trump administration has prioritized drone dominance in this nation," Loeffler said Monday. The program nods to the Pentagon's recent focus: the Department of Defense sought $53.6 billion for drones in its fiscal 2027 budget request. That's a small SBA bet riding on a very large defense line item.

How do the new loan terms change acquisitions?

The SBA's third change targets veterans buying small businesses. Under standard deal structures, buyers must make a 10 percent down payment — commonly known as the equity injection. Previous guidance capped contributions from certain funding sources, such as investor capital, at five percent of that injection. The SBA's new guidance, effective Monday, allows veterans buying companies to receive the full 10 percent from external funding sources.

"By providing veteran buyers greater flexibility to meet the equity requirements, we are opening up more pathways to entrepreneurship for proven leaders and problem solvers – and our next generation of Main Street job creators," Loeffler said. In practice, a veteran founder no longer needs to bring half the down payment out of pocket.

What did Vance say?

Vance opened the event with a joke about last week's midterm elections, in which Republicans suffered sweeping losses — comparing the results to the Ohio State football team's back-to-back weekend defeats.

"Before I get into the meat of my remarks, I wanted to talk about the devastating loss last week," Vance said Monday. "There are a lot of people I think unfairly criticizing the leader of the team, despite leading us to a great victory two years ago. There'[s] a lot of staff infighting and questions about reshuffling."

He paused, then delivered the punchline: "I'm talking, of course, about the Ohio State Buckeyes, and let me just assure you that I really believe in Luke Fahey, our backup quarterback."

The quip landed at the start of an event that otherwise kept its focus on procurement targets, drone manufacturing and deal financing. Whether the doubled 10 percent goal gets met — as the five percent target was in each of the last two fiscal years — will be the number to watch in the government's next contracting scorecards.