Finimpact

Best Small Business Loans for Veterans

Starting a business can be a major challenge for veterans who have limited savings and are facing significant startup costs. Business loans tailored to veterans can give them extra support, helping them to start and grow their businesses.

MicroloanBest Small Business Loans for Veterans
Paige Cerulli
Written by:Paige Cerulli
Business Content Writer

Veterans may need a business loan to finance startup costs or to expand and continue to invest in an established business. Loans can help to cover renovation costs, equipment purchases, inventory expenses, and other business-related costs. They can also help business owners navigate times when they are facing cash flow issues. Our team of financial experts reviewed and ranked the top online lenders to help you get funded.

Our Top Picks Best Small Business Loans for Veterans

biz2credit review
  • Multiple loan types available
  • Funding in 48h
  • Soft credit pull
credit score
Min. Credit Score 600+
loan amount
Loan Amount $25K - $6M
loan repayment
Loan Repayment 12-36 months
Fundbox review
  • No monthly fees or prepayment penalties
  • Same-day or next-day funding
  • Best for business lines of credit
Credit Score
Min. Credit Score 600+
Loan Amount
Loan Amount $5K - $150K
repayment
Loan Repayment 6-12 months
smartbiz
  • High borrowing limits
  • Receive multiple loan offers
  • Competitive loan rates
Min. Credit Score
Min. Credit Score 660+
Loan Amount
Loan Amount $30K- $5M
Loan Repayment
Loan Repayment 10 - 25 years

How to Choose the Best Business Loan for Veterans?

If you’re considering a business loan, it’s important to take the time to make sure that you choose a loan that’s right for your needs. Closely looking at factors like loan features, customer support, and interest rates and fees can help you to compare your loan options. Consider the following factors and write that our experts used these factors to rank lenders.

  • Loan Features: Do the loan terms, repayment options, and available loan amounts work for your needs? Will you be able to repay the loan within the loan term period?
  • Application process: How difficult and invasive is the application procedure? Will there be a hard pull or soft pull to your credit score? If you need funding quickly, consider how soon funding is available once you’re approved.
  • Interest rates and fees: What fees are required for each loan, and what are the minimum and maximum interest rates? Are the interest rates competitive?
  • Qualification process: Do you have the minimum credit score, annual revenue, and business history to qualify for the loan? If your business is less than a year old, you may need to look specifically for funding for startups.
  • Customer support: If you have questions or need help, can you speak with a live customer service representative? Are multi-channel support and supplemental information and tools available?
  • Online user reviews: What are other customers saying about their experiences with the loan on independent review sites like Trustpilot?
  • Perks and Bonuses: What other benefits does the loan offer, like payment flexibility, advertising transparency, and advanced technology?
  • Best Alternative Business Loans for Veterans - Full Overview


    If you’re looking for business funding, consider these top-ranked business loans for veterans.

    1. Biz2Credit - Best for Low Credit Scores

    Biz2Credit offers working capital, term loan, and commercial real estate (CRE) loan options to veterans. Working capital starts at $25,000 and is paid back based on business receipts. Term loans are available up to $500,000 with 36-month terms and are suitable for larger projects and business investments, while CRE loans are ideal for major projects and acquisitions. CRE loans are available up to $6,000,000 and feature interest-only terms up to 36 months.

    Pros
    Multiple funding options
    Funding up to $6,000,000
    Easy online application: Takes 4 minutes
    Approval within 24 hours
    Funding within 72 hours
    Cons
    High interest rates: 7.99% and up
    Must have at least $250,000 in annual revenue

    Biz2Credit features an easy online application that takes just four minutes, though approval times vary depending on the funding type. When applying for working capital or a term loan, you can be approved in 24 hours and funded within 72 hours of submitting your application. CRE loans have a 48-hour approval process. Working capital applicants should have an annual revenue of at least $250,000, a credit score of 575 or higher, and should have been in business for at least six months. Term loan applicants should also have an annual revenue of at least $250,000, and should have a 660+ credit score and have been in business for at least 18 months. CRE requirements are the same as the term loan, and the business owner must already own commercial property.

    The Bottom Line

    While many funders require veterans to have credit scores in the mid- to upper-600s, Biz2Credit’s working capital option only requires a credit score of 575 or higher. It’s a good option for veterans with low credit who might not qualify for other financing options. Plus, with a simple four-minute application, it’s easy to apply for any of Biz2Credit’s financing options.

    Try Biz2Credit

    2.Fundbox - Best for Businesses with Lower Income

    Fundbox offers both a term loan and a line of credit for veterans. The term loan is available as a lump sum that’s ideal for one-time expenses. Veterans who are approved for a term loan may be eligible to take out an additional loan without having to reapply. The line of credit option allows veterans to draw down, repay their balance, and then draw down money again. It’s ideal for unknown or ongoing expenses.

    Pros
    2 financing options
    Simple application takes just minutes
    No origination fees or prepayment penalties
    Minimal revenue required: For line of credit
    Cons
    No information about interest rates
    Short repayment terms

    Fundbox offers a simple application process. Veterans will need to provide basic business information and connect their accounting software or business checking account. Term loans are available with a 24- or 52-week repayment. Line of credit applications require a credit score of 600 or higher, and the business needs to generate at least $100,000 in annual income. The term loan is available with a 12- or 24-week repayment term, so it’s only an option if the borrower will be able to repay the balance relatively quickly.

    The Bottom Line

    While many loans and lines of credit require that businesses have more than $200,000 in annual income, the Fundbox line of credit only requires an income of $100,000 or more. The line of credit is a solid option for veterans who need funding, but who might not be able to secure other financing options. The simple application makes applying for a line or credit or term loan a relatively easy process.

    Try Fundbox

    3. SmartBiz - Best for Multiple Funding Options

    In addition to term loans and SBA loans, SmartBiz offers custom financing options, making it one of the more versatile funding choices for veterans. Term loans and SBA loans range from $30,000 to $500,000. Term loans feature repayment terms of two to five years, while SBA loans feature longer terms of 24 to 60 months. Custom financing options include a business line of credit, invoice financing, and business credit cards, which give veterans more flexibility and options than sticking with traditional loans.

    Pros
    Creative funding options
    Repayment terms up to 5 years
    Easy 5-minute prequalification application
    Funding up to $500,000
    Cons
    Business must be at least 2 years old
    Strict qualification requirements
    Minimum credit score of 660
    Closing costs and application fees

    SmartBiz offers a five-minute online prequalification. Applicants must have been in business for at least two years and need to have a personal credit score of at least 660. SBA loans feature interest rates of 6.25% to 7.25%, but veterans also need to be aware of application fees, which are no more than $3,000, and closing costs, which are about $450. Bank term loan interest rates start at 6.99%. Custom financing interest rates also start at 6.99%, and SmartBiz loan consultants are available by phone during business hours and on Saturdays to help veterans explore their financing options.

    The Bottom Line

    SmartBiz offers multiple financing options for veterans, including custom options like invoice financing and business credit cards. All of these options feature different terms, interest rates, and application requirements, so veterans can evaluate them and consider which is best for their needs.

    Try SmartBiz

    4. BlueVine - Best for Low Interest Rates

    BlueVine offers a business line of credit up to $250,000. As veterans repay their line of credit balance, that credit line is replenished, allowing them to repeatedly draw from it. The line of credit has interest rates as low as 4.8%, making it one of the lower interest financing options available to veterans. Veterans only pay for the funding that they use from the line, and there are no opening, maintenance, or prepayment fees.

    Pros
    Credit line replenishes: For ongoing funding
    Limit up to $250,000
    Low 4.8% interest rate
    Fast approval in just 5 minutes
    No opening, maintenance, or prepayment fees
    Minimum credit score of just 600
    Cons
    Short terms of 6 or 12 months
    Required $10,000 per month in revenue

    Applicants need to meet several requirements, including having a FICO score of at least 600, have a business generating at least $10,000 per month in revenue, and having been in business for at least six months. The application is simple and takes just five minutes to complete. Once approved, funds are deposited in veterans’ accounts within hours after they request a draw. Six- and 12-month repayment terms are available.

    The Bottom Line

    The ability to repeatedly draw down funds can be a major advantage for veterans facing ongoing or unknown business expenses. Since interest rates start at just 4.8%, the line of credit can be a more affordable funding option. Plus, since applicants only need a credit score of 600, veterans with lower credit may still qualify.

    Try BlueVine

    5. Kabbage - Best for Low Finance Amounts

    Kabbage offers a line of credit that features an unusually low minimum of just $1,000, making it an ideal choice for veterans who need smaller amounts of funding. The line of credit is available in amounts up to $150,000, so it’s also suitable for larger funding needs. Veterans can draw down just the amounts that they need, and they’ll only pay loan fees on the capital that they use. Those monthly fees (charged instead of interest fees) are only charged during months when veterans have an outstanding balance, and there are no prepayment penalties, making it easy to minimize funding expenses.

    Pros
    Funding minimum of just $1,000
    Only pay for what you borrow
    No prepayment penalties
    Get real-time approval
    Cons
    Must be in business for 12 months

    Kabbage offers a unique, streamlined application process. Once applicants complete the brief application and connect their business accounts, Kabbage reviews the information in real time to quickly approve applicants. Eligible applicants need to have a valid business checking account and need to have been in business for at least 12 months. Monthly fees for six-month loans range from 0.25 to 3.5%. Twelve-month loans have fees of 0.25 to 2.75%, while 18-month loans have fees from 0.25 to 2.5%.

    The Bottom Line

    With lines of credit available from $1,000 to $150,000, Kabbage is a good choice for veterans who may need lower amounts of funding. Since borrowers only pay for the money that they borrow, Kabbage offers a flexible financing option that ensures veterans have access to the funds they need without incurring more fees and interest than necessary.

    Try Kabbage

    Best Alternative Business Loans for Veterans Feature Comparison

    Company Min. Credit Score Min. TIme in Business Loan Amount Interest Rate
    Biz2Credit 580+ 6 months $25K - $6M 7.99%-10%
    Fundbox 600+ 6 months $5K - $150K 4.66 - 8.99%
    SmartBiz 660+ 2 years $30K- $5M 4.75% - 7%
    BlueVine 600+ 6 months $5K-$250K 0.25 - 25%
    Kabbage No minimum required 12 months $1K-$150K 9.00-36.00%

    U.S. Small Business Administration Loans for Veterans

    Here are various loan types available for veteran entrepreneurs:

    SBA Standard 7(a) Loan Program

    The SBA 7(a) Loan Program is the most common loan program offered by the Small Business Administration. The main benefits of this loan are the low-interest rate and the excellent repayment terms.

    The SBA 7(a) loan has a government guarantee. In most cases, the SBA guarantees up to 85% of the loan. A business can use the SBA 7(a) loan funds for any use it has, including short and long-term working capital, refinancing current business debt, purchasing equipment and supplies, and more.

    The SBA 7(a) loan amounts range from $30,000 to $5,000,000 with repayment terms from 10 to 25 years. The interest rates are very low. Any veteran-owned business can apply for an SBA 7(a) small business loan through online facilitators like SmartBiz or SBA’s website.

    Military Reservist Economic Injury Disaster Loan (MREIDL)

    The MREIDL loan program provides financial help to small businesses operated or employ military reservists as essential employees. The MREIDL program provides working capital until operations return to normal and the essential employee is released from active military duty and is back at work.

    The MREIDL fund does not cover lost income and cannot be used to refinance long-term debt or to expand a business. You can obtain up to $2,000,000 via this program.

    SBA Microloan

    The smaller loan amounts provided by the SBA are called SBA microloans. Microloans are designed to help veteran and women-owned businesses, minority-owned businesses, etc.

    The max loan amount is $50,000, the average microloan is $14,400, and the funds are provided by intermediary lenders like non-profit, community-based organizations. The appeal with SBA-backed microloans is the low 6.5% interest rate and the six years repayment period.

    SBA 504 Loan Program

    The 504 loan program is backed by the SBA, involving term loans used for the expansion and modernization of objects and commercial real estate. The SBA 504 loan is up to $5,000,000, and you can use it to promote business growth and job creation. A 504 loan cannot be used for working capital, existing debt repayment, or rental real estate investment.

    Veteran-owned businesses looking to purchase a building or land, building new facilities for their business, and investing in long-term machinery and equipment could apply for an SBA 504 loan.

    SBA Express Loan

    From 2007 to 2013, there was a special Patriot Express Loan program, where veteran entrepreneurs were the primary eligible borrowers, which is now known as the Express Loan program. The Express Loan goes up to $500,000.

    It is among the most popular loan delivery methods, as the main attraction with the Express Loan is that it is granted (or denied) within 36 hours of application.

    The Express Loan can be used for working capital, purchasing real estate, and refinancing debt. The SBA Express Line of credit has an average repayment of seven years, ranging from 10 to 25 years.

    SBA Veterans Advantage Loan

    To help veteran-owned businesses, the SBA offers Veteran Advantage Loans. To be eligible, an honorably discharged veteran must own the business's majority (at least 51%).

    Service-disabled veterans could also run the business, active-duty military service members participating in the Transition Assistance Program (TAP), reservists, National Guard members, and spouses. Widowed spouses of service members who died while in service are eligible to apply.

    The Veterans Advantage loan ranges up to $350,000, and the SBA does not require any upfront fee for loans under $150,000. Veteran business owners have an excellent chance of getting a Veteran Advantage loan, as the SBA also enables veteran-owned businesses better opportunities via government contracts.

    Veteran Loans from Credit Unions and Nonprofit Organizations

    In addition to the lenders above, many credit unions and nonprofit organizations also offer loans for veterans. You may want to consider these loan options.

    PeopleFund

    PeopleFund is a nonprofit lender and certified Community Development Financial Institution that works to foster diversity and innovation. PeopleFund has lent money to over 3,000 small businesses and nonprofits in its 25-year history.

    PeopleFund focuses on supporting veterans, women, and minorities in low- to moderate-income areas of Texas. Loans are customized to each applicant’s needs, and PeopleFund provides one-on-one consulting and group training to help business owners succeed. Fourteen percent of the businesses funded are veteran-owned businesses.

    Loan options include working capital term loans, revolving line of credit, and financing for equipment purchases. Loan interest rates range from 7 to 15%, and PeopleFund offers veterans discounted interest rates. Existing small businesses are eligible for up to $5 million in funding, and loan terms range up to 84 months.

    Navy Federal

    The Navy Federal Credit Union is a not-for-profit credit union that was founded in 1933. Today, the credit union has more than 11 million members and serves the military, veterans, and their families. Loan options for veterans include business lines of credit, vehicle and term loans, and real estate loans.

    Business lines of credit amounts start at $35,000 and are ideal for business growth, unexpected expenses, and navigating cash flow gaps. Borrowers only pay interest on the funds that they use. Applicants will need to provide personal and business tax returns for two years, a business plan, financial statements, a personal financial statement, and proof of collateral.

    Term loans are available for purchases and refinancing, including vehicle and equipment purchases. These loans carry a $150 origination fee, but there is no prepayment penalty. Applications are processed within seven to 10 days. Among other requirements, applicants will need to provide a certificate of insurance, a personal guarantee, and a personal credit check will be performed.

    Hivers & Strivers

    Hivers & Strivers is an angel investment group that invests only in companies that are led by military veterans. Those companies include Vet Accel, True Made Foods, Independence Hydrogen, and LeaseLock.

    Hivers & Strivers provides early-stage capital for businesses, and veterans need to apply through Gust. Initial investment amounts range from $200,000 to $500,000, and businesses need to be beyond the concept stage. Applicant businesses should provide opportunity for significant growth and should not be reliant on government contracts.

    Accion

    Accion is a global nonprofit that was founded in 1961. Accion works to empower people who are underserved, including veterans, and the Accion Opportunity Fund helps more small businesses access the loans that they need.

    The Accion Opportunity Fund supports business owners in multiple ways, including giving them access to capital, networks, and coaching opportunities. Over its 25 years of service, the fund has invested $516 in small business owners.

    Loan amounts range from $5,000 to $100,000 with terms of 12, 24, 36, or 60 months. There are no prepayment penalties, and interest rates start at 5.99%. The loan application is available online, and applicants can also get phone support in Spanish and English. Eligible applicants will be given multiple prequalified offers, so they’ll be able to choose the loan option that’s best for them.

    What is a VA Small-Business Loan?

    VA small business loans are financing options designed to support veteran-owned businesses. While the U.S. Department of Veterans Affairs doesn’t provide VA small business loans, these loans are available from multiple sources, including traditional banks and online lenders. They may feature lower interest rates or eligibility requirements designed to make them accessible for veterans.

    Who Qualifies for a VA Small-Business Loan?

    Loans designed specifically for veterans will typically require that the applicant be an active military member, a veteran, or a family member. Often a spouse or widowed spouse of an active military member or veteran can also apply. The applicant may need a minimum credit rating, often in the 600s, and may need to provide business plans, financial statements, tax information, and business licenses or certifications to qualify for a loan.

    Many loans have specific business requirements as well. It’s common to require that the business be located and operating in the United States. Some loans also have specific requirements for the amount of time that the business has been in operation, and may require that the business be at least a year old. Businesses may also need to meet income requirements, often starting at $120,000 in revenue per year. The business may need to be entirely veteran-owned or the majority of the business may need to be veteran-owned.

    How Do You Apply for a VA Loan?

    In addition to the typical types of documentation, like business plans, financial statements, and tax information, veterans and their families also need to produce forms that prove their service histories.

    There are multiple documents that prove service history and military status, and loans may accept all or some of the following:

  • Military ID card
  • Veterans ID card
  • VA-issued ID card for health care
  • Veterans designation on a driver’s license
  • State veterans ID card
  • Veterans group membership card for the VFW, DAV, or American Legion
  • DD Form 214
  • How Veterans Can Use the Funds From a VA Business Loan?

    Veterans can use VA business loan funds in multiple ways, depending on the type of loan that they’ve chosen.

  • Lines of credit: are highly flexible options that allow veterans to repeatedly draw down and repay that funding over a short term period. Veterans can use lines of credit for nearly any expense, including navigating times of limited cash flow, equipment purchases, and other business investments.
  • Term loans: feature a longer repayment term, but offer similar unrestricted potential uses. Veterans might use term loans for larger investments, like renovation expenses, large equipment purchases, large inventory purchases, and other expenses. Term loans are paid out as a lump sum, so they tend to be better for large, one-time expenses.
  • SBA loans: are available in amounts from $500 to $5.5 million, so they’re often used for significant purchases or investments. A veteran might use a SBA loan for expenses like refinancing debt, purchasing real estate, investing in machinery or equipment, or remodeling or expanding a business space.
  • Are There Startup Business Loans for Veterans?

    There are multiple types of startup business loans for veterans. Some lines of credit are available to businesses that are at least six months old, and they can be used to help business owners navigate those initial years. Some funders like Hivers & Strivers provide startup capital for veteran-owned businesses.

    Other resources for veteran-owned businesses

    In addition to small business loans, there are many other resources available to veteran-owned businesses. Be sure to look into the following resources, which include training programs and grants and growth resources offered by the government and nonprofit organizations.

  • Boots to Business: Boots to Business is a SBA training program that’s part of the Department of Defense Transition Assistance Program. It’s available to active duty service members, veterans, and their spouses. The program provides detailed information on entrepreneurship and business ownership.
  • Women Veteran Entrepreneurship Training Program: The Women Veterans Entrepreneurship Training Program offers both in-person and online training for women veterans who hope to start or who are running businesses in Texas. Veterans can participate in webinars, workshops, and training sessions, receive one-on-one advising, and apply for business loans.
  • Service-Disabled Veteran Entrepreneurship Training Program (SDVETP): The Service-Disabled Veteran Entrepreneurship Training Program offers service-disabled veteran entrepreneurs training to prepare them for business ownership. The programs are offered through grantees, including St. Joseph’s University and Dog Tag, Inc.
  • StreetShares Foundation: The StreetShares Foundation is a nonprofit that inspires, educates, and supports the military entrepreneurial community. StreetShares help to connect veterans with capital opportunities, coaching and networking, educational opportunities, and access to mentors. The services are available to military community entrepreneurs nationwide, and they help entrepreneurs to start and grow their businesses.
  • The Global Good Fund Veterans Leadership Program: The Global Good Fund Veterans Leadership Program is a year-long leadership development program that is available to veteran entrepreneurs. During the program, veterans develop leadership skills through pairings with executive coaches and c-suite business mentors. Veterans also have access to leadership assessment resources, a global peer network, and $10,000 of targeted funding.
  • Conclusion

    Veteran entrepreneurs and business owners have access to many different business loans and funding opportunities. From programs designed specifically for veterans to options like short term loans and working capital, these resources can help veterans to build and expand their businesses. As with any funding opportunity, it’s important to consider factors like interest rates and terms when finding the loan that’s right for you and your business.

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    About the Author

    Paige Cerulli

    Business Content Writer

    Paige Cerulli is a content writer and copywriter who specializes in business, finance, pet, and health topics. An entrepreneur herself, Paige enjoys writing about topics that help business owners to make well-informed strategic decisions.

    More about me