The Small Business Administration will double its federal contracting goal for veteran-owned small businesses to 10 percent, Administrator Kelly Loeffler announced Monday at a Washington, D.C. event headlined by Vice President J.D. Vance. The same event launched a $500,000 drone-manufacturing pilot program and relaxed the equity rules for veterans buying companies through SBA-backed loans.

The announcements kicked off National Veterans Small Business Week at an event sponsored by J.P. Morgan Chase. Rep. Roger Williams of Texas, who chairs the House Small Business Committee, joined Loeffler and Vance on stage.

What does the new contracting goal change?

The new 10 percent target replaces a threshold that has moved slowly for two decades. The Veterans Entrepreneurship and Small Business Development Act of 1999 set the procurement goal at three percent for businesses owned by service-disabled veterans. Over the last two fiscal years, that target rose to five percent, and the government met it in both years.

Doubling the goal to 10 percent signals a sharper push to route federal spending toward veteran founders. The move follows a pattern of administrations adjusting procurement targets by group: under President Donald Trump, the SBA reversed former President Joe Biden's initiative to award at least 15 percent of federal contracts to small disadvantaged businesses and returned that level to five percent.

How does the drone pilot fit in?

Loeffler framed the $500,000 pilot program as part of a broader administration priority on unmanned aircraft.

"This is kind of an all of America approach that the Trump administration has prioritized drone dominance in this nation," Loeffler said Monday. Her comment nods to the Pentagon's recent focus: the department sought $53.6 billion for drones in its fiscal 2027 budget request.

For veteran founders in hardware and defense-adjacent manufacturing, the pilot opens a new, if modest, funding channel — smaller in scale than Pentagon procurement but aimed squarely at small businesses rather than prime contractors.

What changes for veteran buyers of small businesses?

The SBA also rewrote the rules for the 10 percent down payment, known as the equity injection, that veteran entrepreneurs must contribute when buying a company through its loan programs. The new guidance took effect Monday.

Previous rules capped contributions from certain outside funding sources, such as investor capital, at five percent of the 10 percent equity injection. Veterans must now cover only half that ground with their own money — the full 10 percent can come 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.

For acquisition-minded veterans, the change reduces the personal cash required at closing and makes seller-financed and investor-backed deals easier to structure. It effectively lowers the barrier to buying an existing small business through SBA programs.

What did Vance say?

Vance opened his remarks with an extended joke that compared the Republican Party's sweeping losses in last week's midterms 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. "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 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."

Why it matters for practitioners

Three concrete changes landed Monday:

• Federal contracting goal for veteran-owned small businesses doubles to 10 percent, up from five percent in the last two fiscal years.
• A $500,000 SBA pilot program targets drone manufacturing, aligned with the Pentagon's $53.6 billion fiscal 2027 drone budget request.
• Veterans buying companies through SBA loans can now fund the entire 10 percent equity injection from outside sources, removing the previous five percent cap on investor capital.

Veteran founders pursuing federal contracts or acquisition deals should review the new guidance now, since the equity-injection change applies immediately.