New York (AP) - The Small Business Administration says it has lined up pledges from more than 120 banks to increase lending to veterans.

The agency said Tuesday it's starting a program, the SBA Veteran Pledge Initiative, aimed at increasing lending to veteran-owned businesses by 5 percent a year for the next five years.

The 20 major banks known as SBA National Lending Partners are making the pledge along with about 100 regional banks across the country. The program is expected to help an additional 2,000 veterans get loans totaling $475 million over the life of the program, the SBA said.

The agency started the program after finding there was a gap in lending to veterans, SBA head Karen Mills told The Associated Press.

In the fiscal year that ended Sept. 30, the SBA backed more than 3,200 loans to veterans worth more than $1.25 billion.

"We don't have a specific theory about the cause," Mills said. "When we went to the banks they were eager to be connected to veteran-owned businesses."

Nine percent of small businesses, or 2.45 million, are owned by veterans, according to the SBA. Mills said the new program is designed to complement SBA programs aimed at training veterans so they'll be able to start and run businesses and obtain loans. Mills noted that many veterans leave the service with management skills that can carry over to running a business.

Many of the veterans who have returned from Iraq and Afghanistan have started companies, and many have decided to open franchises, said Rich Bradshaw, the head of SBA lending at TD Bank, one of the agency's lending partners. He said most of the franchise loans that TD Bank expects to make under the new program will be under $150,000.

The ongoing reduction of troops in Afghanistan, which follows the withdrawal of troops in Iraq, is expected to increase demand for business loans from veterans, Bradshaw said.

The SBA's website has a section aimed at veterans who are business owners or planning to start businesses. It's www.sba.gov/veterans.