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.
Reviewed by: Sarah Brooks, Personal Finance Writer and Editor
Many or all of the products featured here are from our partners who compensate us. This may affect which companies we write about and where the company appears on a page. However, any analyses, or reviews expressed in this article are those of the author’s alone, and have not been approved or endorsed by any partner.
Veterans may need a small business loan to finance startup costs or to expand and continue to invest in an established business. Loans can help cover renovation costs, equipment purchases, inventory expenses, and other business-related expenses. They can also help business owners navigate times when they are facing cash flow issues. Our team of financial experts reviewed and ranked the best business loans for veterans to help you get funded.
Top Picks for Best Small Business Loans for Veterans
If you’re considering a business loan as a veteran, it’s important to take the time to make sure you choose a loan that’s right for your needs. In this review, we looked closely at factors like loan features, customer support, and interest rates and fees to help you select the best loan option.
Best Small Business Loans for Veterans - Full Overview
If you’re looking for business funding, consider these top-ranked business loans for veterans.
1. Kabbage - Best for Fair Monthly Revenue
Kabbage offers a line of credit from $2,000 to $250,000 with fair monthly revenue requirements. Most lenders require at least $100,000 in annual revenue, but Kabbage only requires $3,000 in monthly revenue. The application is straightforward, and funds are in your account in a timely manner. With a Kabbage line of credit, veterans can draw down just the amounts that they need, and they’ll only pay loan fees on the capital that they use.
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, a credit score of at least 640, and have been in business for at least 12 months. Monthly fees for six-month loans range from 2-9%. Twelve-month loans have fees of 7.5-18%, while 18-month loans have fees from 15.75-27%.
The Bottom Line
With lines of credit available from $2,000 to $250,000, 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.
2. National Funding - Best for Veterans with Bad Credit
National Funding offers short-term working capital loans for veteran-run businesses in a variety of industries, and poor credit isn’t a problem. Depending on when you apply, you can receive your funds via direct deposit within 24 hours. If you need some extra cash to cover day-to-day expenses or make it through slow or off seasons, it might be a good option.
National Funding’s short-term working capital loans range from $5,000 to $500,000 with repayment terms between four months and two years. The factor rate starts at 1.10. To take out a working capital loan, you’ll need a minimum credit score of 600, a business history of at least six months, and $250,000 or more in annual revenue.
Note: National Funding offers an early repayment discount. If you pay your loan in full within the first 100 days, you’ll receive a 7% discount on the remaining balance.
The Bottom Line
If you’re an established veteran business with solid annual revenue but not the best credit, a working capital loan from National Funding may be a good option. You can secure up to $500,000 in funding and potentially receive your money within 24 hours.
3. Biz2Credit - Best for Commercial Real Estate Loans for Veterans
Biz2Credit offers working capital, term loan, and commercial real estate (CRE) loan options to veterans. Working capital loans start at $25,000 and are 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. CRE loans are available up to $6 million and are ideal for major projects and acquisitions. They feature interest-only terms up to 36 months.
When applying for working capital or a term loan through Biz2Credit, you can be approved in 24 hours and funded within 72 hours of approval. Working capital applicants need an annual revenue of at least $250,000, a credit score of 575 or higher, and have been in business for at least six months. Term loan applicants also need an annual revenue of at least $250,000, along with a credit score of 660 or higher. Those looking for a term loan need to be 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.
4. Fundbox - Best for Startup Business Loans for Veterans
Fundbox offers both a term loan and a line of credit up to $150,000 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 on the money, repay their balance, and then draw on the money again. It’s ideal for unknown or ongoing business expenses.
Fundbox offers a simple application process with funds available to transfer the next business day from loan approval. 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. To qualify for either option, you’ll need to have been in business for at least six months.
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 and just six months in business. This makes them ideal for startup loans for veterans. The line of credit is a solid option for veterans who need funding, but may not be able to secure other financing options.
5. Bluevine - Best for Business Lines of Credit for Veterans
Bluevine offers business lines 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.
Applicants need to meet several requirements, including having a FICO score of at least 625,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 on funds can be a major advantage for veterans facing ongoing or unknown business expenses. Since Bluevine 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 625, veterans with lower credit may still qualify.
6. SmartBiz - Best for Franchise Loans for Veterans
SmartBiz offers term loans, SBA loans, and custom financing options, making it one of the more versatile funding choices for veterans. If you own a franchise or are hoping to purchase one, SmartBiz is able to help. Loans can be used to increase inventory or expand your business, pay for daily operating expenses, refinance existing debt, and more. With SmartBiz, the application takes just five minutes and will not affect your credit score.
Term loans range from $30,000 to $300,000 with two to five year repayment terms. SBA loans feature longer terms of 24 to 60 months and financing up to $350,000. Commercial real estate loans range from $500,000 up to $5 million.
To qualify, 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 7.5% to10.29%, but veterans also need to be aware of application fees and closing costs. Bank term loan interest rates start at 7.99%, and commercial real estate loans start at 7.00%. 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.
Loan features: We looked at loan terms, repayment options, and loan amounts, making sure they are flexible and will meet a variety of business’ needs.?
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: We looked at what other customers were 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?
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 that operate 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.
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. If you have a veteran-owned company, you may want to consider these loan options.
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 lines 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.
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 and 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 and 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 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.
Loans designed specifically for veterans will typically require that the applicant be an active military member, a veteran, or a family member. Oftentimes, 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 six months old. Businesses may also need to meet income requirements, often starting at $100,000 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 To 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 VA Business Loan Funds
Veterans can use VA business loan funds in multiple ways, depending on the type of loan that they’ve chosen.
Lines of credit: 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: Available in amounts from $500 to $5.5 million, they’re often used for significant purchases or investments. A veteran might use an 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 and Strivers provide startup capital for veteran-owned businesses.
In addition to small business loans, there are many other resources available to veteran-owned businesses. The following resources include training programs and small business grants, and growth resources offered by the government and nonprofit organizations.
Boots to Business: an 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: 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.
StreetShares Foundation: 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: 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.
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 loan terms when finding the loan that’s right for you and your business.