7 Best Business Loans for Veterans of April 2024
Updated March 29, 2024 at 2:27 pm
Veterans have a substantial number of resources they can turn to when they need to find the best small-business loans. Whether a veteran needs funding for a startup or has a more established business that needs additional resources for expansion, the best business loans for veterans can offer higher borrowing amounts, faster funding times or discounted rates so they can focus on building the most successful small business possible.
Our guide showcases some of the top choices available to veterans and how to select the best loan for your financial needs.
Our Methodology Newsweek Vault’s loan experts evaluated multiple data points to help our readers make sense of their borrowing options across student loans and personal loans. To narrow down the best available offers, we weigh the product pros and cons across five core categories, including:
- Application process
- Eligibility requirements
- Interest rates
- Loan amounts (minimum and maximum)
- Repayment flexibility
Our Picks - Best for Large Funding: SBA 7(a) Loan
- Best Discount for Veterans: SBA Express Loans
- Best for Minimum Revenue Requirement: American Express Business Line Of Credit
- Best for Fast Funding: OnDeck
- Best Line of Credit: Bluevine
- Best Term Loans: SMB Compass
- Best for a More Established Business: Balboa Capital
Best Small-Business Loans for Veterans of 2024
Best for Large Funding
SBA 7(a) Loan
Vault Verified
Why we chose it: Large borrowing amounts can be hard to come by, but an SBA 7(a) loan offers amounts up to a staggering $5,000,000. If you qualify, you can use them for a wide range of business purposes too, including real estate, equipment, expansion and purchasing supplies.
Pros
- Significant borrowing amounts up to $5,000,000
- Up to 25-year repayment terms (depending on business purpose)
- Capped interest rates
Cons
- Funding times can take months
- Strict qualification criteria
- Substantial amount of paperwork involved
Additional Information
Interest Rates
Maximum amounts (varies by lender):
- Up to $50,000: Base rate + 6.5%
- $50,001 to $250,000: Base rate + 6%
- $250,001 to $350,000: Base rate + 4.5%
- $350,001 or more: Base rate + 3%
Minimum Requirements
- Business operating for profit in the U.S.
- Fall under SBA size requirements and not fall under ineligible business types
Best Discount for Veterans
SBA Express Loans
Vault Verified
Why we chose it: SBA Express Loans qualify to have the upfront guarantee fee waived for veteran-owned businesses. This fee can be as high as 3.75% for an SBA loan, and if it’s waived, that means a substantial savings.
Pros
- Can choose either a term loan or line of credit
- Lengthy repayment terms of up to 25 years
- Capped, competitive interest rates
Cons
- May require collateral for loans over $50,000
- Longer funding times
- Strict eligibility requirements
Additional Info
Interest Rates
Maximum amounts (varies by lender):
- Up to $50,000: Base rate + 6.5%
- $50,001 to $250,000: Base rate + 6%
- $250,001 to $350,000: Base rate + 4.5%
- $350,001 or more: Base rate + 3%
Minimum Requirements
Varies by lender but typically requires two years in business
Best for Minimum Revenue Requirement
American Express Business Line of Credit
Vault Verified
Why we chose it: Many lenders require a minimum annual or monthly revenue amount to qualify for a small-business loan. American Express offers a line of credit where a business must have at least $3,000 per month in monthly revenue, which may increase the odds of approval for businesses that have been open for at least a year.
Pros
- Lower monthly revenue requirement for qualification
- Generous line of credit borrowing amount
- Multiple repayment term options from six to 24 months
Cons
- Requires higher credit score for approval
- Must be in business at least one year
- Monthly fee charges on borrowed amounts can be high
Additional Info
Interest Rates
Monthly fees charged:
- 3-9% for 6-month loans
- 6-18% for 12-month loans
- 9-27% for 18-month loans
- 12-18% for 24-month loans
Minimum Requirements
In business at least one year, monthly revenue of at least $3,000
Best for Fast Funding
OnDeck
Vault Verified
Why we chose it: Your veteran-owned business may need access to funds quickly, whether it’s paying for an unexpected equipment failure or seizing an opportunity to buy discounted inventory. Whatever your motivation, OnDeck can provide quick approval decisions, and it’s possible you can receive the funds as soon as the same day of approval.
Pros
- Quick approval decision and same-day funding possible
- Large borrowing range of up to $250,000
- Offers working capital term loans or lines of credit
Cons
- Significantly higher interest rates compared to other loans
- Business must be established for at least a year
- Minimum $100,000 in annual revenue requirement
Additional Info
Interest Rates
Average of 55.8% APR
Minimum Requirements
At least one year in business, a business checking account, $100,000 in annual revenue
Best Line of Credit
Bluevine
Vault Verified
Why we chose it: For veterans seeking a line of credit so they can access funding as they need it, the Bluevine line of credit may offer an affordable option. Not only does it feature competitive interest rates, but it also allows repayment terms of up to 12 months, which is longer compared to other online lenders. Learn more in our Bluevine business loans review.
Pros
- Funds available within hours of request
- Large credit line of up to $250,000
- Up to 12-month repayment terms
Cons
- Requires a high minimum of $40,000 in monthly revenue
- Must be in business at least two years
- Charges additional fees for same-day funding
Additional Info
Interest Rates
As low as 6.2% APR
Minimum Requirements
At least two years in business, $40,000 in monthly revenue, operating or incorporated in a U.S. state, business in good standing and no bankruptcies within the last year
Best Term Loans
SMB Compass
Vault Verified
Why we chose it: SMB Compass offers term loans with some of the largest borrowing amounts available, and your business only has to be established for at least six months for consideration.
Pros
- Robust borrowing range of up to $5,000,000
- Long repayment terms of up to 25 years available
- Competitive interest rates
Cons
- Higher credit score of 680 and annual revenue of $500,000 required
- Funding can take several days
- May require collateral
Additional Info
Interest Rates
Starting at 6.99%
Minimum Requirements
Must be in business at least six months and annual revenue of at least $500,000
Best for a More Established Business
Balboa Capital
Vault Verified
Why we chose it: Balboa Capital offers small-business loans that you can use for a wide range of expenses, from emergencies, payroll and inventory to large equipment purchases. This funding flexibility extends to the repayment terms, where you’ll have up to 24 months for repayment and the possibility of same-day funding.
Pros
- Loan approval decision within an hour
- Same-day funding available
- Large borrowing amounts
Cons
- Higher minimum revenue requirement of $300,000
- Doesn’t disclose APR range
- May require daily or weekly repayments
Additional Info
Interest Rates
Not disclosed
Minimum Requirements
At least $300,000 in annual revenue
Types of Veteran Business Loans
You can find veteran business loans through a variety of sources, including commercial lenders such as banks, credit unions and online lenders. You can also find these loans through nonprofit organizations and the Small Business Administration (SBA). Some of these loans may also be available to family members of veterans.
Online Loans
Small-business loans from online lenders typically offer quick funding and more lenient credit requirements. They also offer a wide range of loan products, ranging from term loans and lines of credit to equipment financing or invoice factoring. While quicker funding and lower credit requirements may sound appealing, these lenders typically charge higher interest rates and tack on additional fees.
SBA Loans
SBA loans offer loan products partially backed by the Small Business Administration, however, they aren’t the ones offering the lending. The SBA partners with SBA-approved private lenders across the country and offers a substantial guarantee for each of the loans.
The SBA guarantee not only makes these loans somewhat easier to qualify for, but it also means more favorable repayment terms and capped interest rates typically lower than other lending options. On the other hand, qualifying for the loans still requires strong financial credentials, an established amount of time in business and patience to work through a tremendous amount of paperwork. There are a couple of specific types of loans under the SBA umbrella where veterans may especially benefit though, which might make the application process worth going through.
SBA 7(a) Loans
SBA 7(a) loans are the most common type of SBA-backed loan, with over 57,000 processed in fiscal year 2023. You can use the funding from a 7(a) loan for a wide range of purposes, such as equipment financing, debt refinancing, working capital, real estate and much more. The maximum loan amount is up to $5,000,000, and repayment terms are as high as 25 years (depending on the purpose). This loan doesn’t offer any specific discounts for veterans, but the loan can offer a stellar lending option for a small-business owner who needs a larger loan amount.
SBA Express Loan
The SBA Express Loan is another option for veteran small-business owners that offers quicker turnaround times for funding with a maximum loan amount of $500,000 and a cap on interest rates. Although applicants must meet higher credit score requirements and have been in business for two years or more, it also offers competitive interest rates and favorable repayment terms. Veterans, reservists, National Guard members and spouses can take advantage of having the upfront fees waived with these loans too.
Military Reservists Economic Injury Disaster Loans (MREIDL)
Military Reservist Economic Injury Disaster Loans (MREIDL) are offered through the SBA where you can receive financial assistance if you’re a business with an essential employee who is a military reservist and has been called up for active duty. The maximum loan amount is $2,000,000, but you can’t use it toward business expansion. The loan becomes available the day the employee receives their notice and lasts through one year after the employee is discharged.
Microloans
Microloans offer smaller lending amounts, which may be easier to qualify for if you struggle with your credit score or have a new business. Numerous nonprofit organizations offer access to microloans, especially if there is an unmet need in a community and the business can help it in some way. While microloans may forego credit checks or have more lenient qualifications, they can take longer with funding. There are microloan options available specifically for veteran business owners.
The SBA also offers the SBA microloan, which offers funding up to $50,000 and can be used for multiple business-related purposes. Although funding time can take longer and these loans usually require collateral, they have low fees, capped interest rates and repayment terms of up to six years.
Banks and Credit Unions
Most banks offer traditional business loans which feature lower interest rates and fees, but these can have stringent credit requirements and require a lengthy time in business. Bank loans may be more desirable though because you often receive in-person service during the application process. Many banks offer veteran discounts, so if you’re interested in securing funding through a bank, it’s worth looking for those offering military discounts. For example, U.S. Bank offers the Business Diversity Lending Program to veterans, which opens up greater access to funding and revises the typical credit standards needed to qualify for a business loan through U.S. Bank.
Credit unions are another provider of business loans for veterans. The qualifications for business loans through a credit union are similar to those of a bank, but you may find it easier to work with a credit union focused specifically on veterans, such as Navy Federal Credit Union. Navy Federal Credit Union offers several lending products to veterans, including commercial real estate, lines of credit, term loans and company vehicle loans.
How To Get a Veteran Small-Business Loan
The first step to getting a small-business loan as a veteran is shopping around and reviewing what type of funding and lender will work best for your situation. Some steps you can take to get the ideal small-business loan include:
- Research SBA loan options. Start by reviewing options offered by the SBA since these loans cost less, have generous repayment terms and may have veteran benefits. The SBA website is full of details explaining the loan process and choices.
- Get the necessary veteran documentation. You’ll most likely have to provide veteran-specific documentation including discharge forms and your military ID in order to receive veteran-specific loan benefits. Gathering the documentation ahead of time can save time during the approval process when you’re asked to present it.
- Compare multiple lenders. Comparing other lenders, including those for SBA loans, can help you find the most affordable loans, competitive rates and lending options that fit your business needs. Comparing these options can help you pinpoint which one you should apply for.
- Submit an application. Once you’ve narrowed down your preferred lender and loan choice, follow the steps the lender outlines for submitting your application. Most have online application options available and will also require substantial financial documentation. Tax returns, financial statements, a business plan, collateral and other business information may be required.
- Wait for approval. Some lenders tout offering approval decisions within minutes, while others may take several days (or months). Once approved, there may be even more of a wait time for funding, but many lenders can send funding within a few business days.
How To Choose the Best Business Loan for Veterans
Choosing the best business loan for veterans means comparing several lenders and options so you can see which one stands out and can best support your veteran-owned business. Look for the following factors as you’re comparing your choices:
Veteran-Specific Benefits
While lenders don’t necessarily have “veteran business loans,” many offer discounts or waived fees for veterans. These can offer substantial savings, so it’s worth the time it takes to find out if there’s a specific benefit offered. You can also research various credit unions or nonprofit organizations that cater specifically to veterans and find out what lending options are available through them.
Rates and Fees
The interest rate is the amount the lender charges for borrowing funds. These rates vary widely from one lender to the next and are based on what type of loan it is. SBA loans have capped interest rates, which makes them a more affordable option in most cases. Banks and credit unions often have competitive interest rates for small-business loans too.
Fees can add substantial costs to a loan and should be carefully reviewed up front. Lenders may include processing, administrative, origination or other fees. You may also find monthly maintenance fees, particularly among lines of credit.
Funding Times
The speed with which you’ll receive your funds also depends on the lender. While some lenders can offer same-day or next-day approval, others may take several business days. SBA loans can take months to fund too. You’ll want to factor in your timeline for when you need the funds as you make your lender selection.
Financing Options for Veteran-Owned Startup Businesses
When you’re a new business or startup, it can pose a challenge for securing funding. Lenders are often hesitant to lend to businesses without much of a financial history. However, there may be other lending options available for a startup. These alternative financing solutions can include:
- Business credit cards: If you need a smaller loan amount, a business credit card may offer what you need for borrowing. While interest rates are higher with credit cards, you only pay interest for what you borrow. You may also qualify for a business credit card offering a 0% introductory APR.
- SBA microloan: The SBA microloan program mentioned above may offer funding to veterans with new businesses. In addition to its competitive interest rates and longer repayment terms, it considers applications from new business owners.
- Online lenders: You can find online lenders willing to work with startups. These lenders typically require a personal guarantee and charge higher interest rates. However, they can usually offer quicker funding times too.
- Personal loan: One other option—if you have a strong enough personal credit score—is applying for a veteran personal loan. Keep in mind, though, personal loans can be used for a wide range of purposes, but some lenders do exclude funding a business.
Frequently Asked Questions
Can I Get a Small-Business Loan With Bad Credit?
Having bad credit (a FICO Score of 580 or less) can make it tougher to qualify for a small-business loan. Though it’s not impossible, you’ll have to look for a lender that doesn’t have as strict credit requirements as traditional lenders. You may have to pledge collateral, such as real estate, equipment or other business assets in order to secure approval.
Can You Use a VA Loan To Start a Business?
No, the Department of Veterans Affairs (VA) does not offer loans, nor can you use the funds from a VA loan to start a business. The VA website directs interested applicants to the SBA website and loan options.
Is It Hard for a Veteran To Get a Business Loan?
It may be hard to find veteran-specific business loans through a bank, credit union or online lender. However, many banks and credit unions offer discounts or waived fees for veterans, so it’s worth shopping around and comparing multiple lenders.
Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.
