6 Best Small Business Loans for Veterans 2019

You’ve served our country, and now you need a loan for your small business. We’ve identified the six best small business loans for veterans. Whether you need seed money for startup or a short-term loan for working capital, these loans are set up with features and benefits specifically for veteran-owned businesses.

Top Six Small Business Loans for Veterans 2019

How We Evaluated the Best Small Business Loans for Veterans

There are a lot of lenders that say they lend to veteran-owned businesses, which is true, but the loans that they offer to veterans are the same loans that they offer to everyone else. We’ve selected six financing opportunities that are specifically aimed at, or have additional benefits for, veteran-owned businesses.

In addition to four VA loan options, we have also included financing from two investment companies. Our decision to do so was based on the fact that we wanted to provide a list of options that had specific funding options for veteran-owned businesses, and that covered financing needs at any stage of business growth (e.g., startup funding, working capital).

The criteria we used to evaluate the best small business loans for veterans include:

• Loan rates and terms: The costs associated with borrowing funds can be a challenge for some new and emerging businesses. We evaluated these lenders based on the interest rates, additional fees, and repayment terms offered.
• Qualification requirements: This includes any time in business requirements, minimum credit score, and minimum annual revenues that your business must produce to be considered eligible for the financing product offered.
• Financing options offered: While some lenders offer only one product with a benefit to veterans, others offer multiple products. Some financing options also include coaching and counseling resources for veteran business owners.
• User reviews: In reviewing potential lenders, we took into consideration what their customers say about the company.

Using the criteria above, our selection for best overall lender of VA small business loans for is StreetShares. StreetShares offers various financing products, including short-term loans, small business lines of credit, and contract financing. They are strong advocates of veteran-owned businesses, and their loan products are competitively priced with interest rates ranging from 7.19% to 29.9% APR.

StreetShares: Best Overall Small Business Loan for Veterans

StreetShares is highly dedicated to veteran-owned businesses; it offers small business loans and lines of credit up to $250,000, as well as contract financing. Their interest rates range from 7.19% to 29.9% APR, making them competitive even with the low rates offered by most traditional banks. If approved, you can receive funding in as few as two days.

StreetShares Veteran Business Loan Costs

StreetShares offers small business loans and lines of credit for veteran-owned businesses with APRs ranging from 7.19% to 29.9%. StreetShares charges a loan origination fee ranging between 2.95% and 4.95% of the loan amount. Additionally, StreetShares offers contract financing starting at rates as low as 1% per month.

The rates and fees for business loans from StreetShares are:

• Expected APR: 7.19% to 29.9% (starting at 1% for contract financing)
• Origination fee: 2.95% to 4.95%
• Prepayment penalty: None

The interest rates charged by StreetShares are in line with, and competitive to, the other lenders on our list. Only Chase offers a lower APR range of 4% to 13%, as would be expected from a traditional bank, due to the fact that traditional banks have more restrictive qualification requirements. The more restrictive the qualifications, the less risk to the lender, which allows for lower interest charges.

StreetShares Veteran Business Loan Terms

StreetShares offers small business loans and lines of credit to veterans in amounts up to $250,000. Their repayment terms for both their loans and lines of credit range from three months to three years. Additionally, StreetShares offers unlimited contract financing with a 90% advance rate on your business-to-business (B2B) and business-to-government (B2G) contract invoices.

The loan terms you can expect with a small business loan from StreetShares are:

• Loan amount: $5,000 to $250,000 (no limit for contract financing)
• Loan term: Three months to three years
• Repayment schedule: Weekly

Unlike the other lenders on our list, StreetShares requires weekly payments. All of the other lenders have monthly payments. If you prefer making payments less frequently, you may want to consider one of the other options on our list. However, weekly payments are standard with many online business lenders.

StreetShares Veteran Business Loan Qualifications

StreetShares has very lenient minimum qualification requirements for their loans, which makes them a good fit for most small business borrowers. To qualify, your business needs to have been operational for at least one year, be generating at least $25,000 in annual revenues, and you need to have a credit score of at least 600.

The minimum qualification requirements for a business loan from StreetShares are:

• Time in business: At least one year
• Credit score: At least 600 (check your score for free)
• Gross annual revenues: $25,000

Aside from Hivers & Strivers and PenFed Foundation, which fund startups, StreetShares has the lowest annual revenue requirements of any of the lenders on our list. Accion requires $180,000 in gross annual revenues, and Chase and Navy Federal Credit Union likely have similar requirements.

What StreetShares Veteran Business Loans Are Missing

The maximum amount that you can borrow from StreetShares with a loan or line of credit is $250,000. Borrowers needing larger loans will need to seek out another lender, like Accion or Chase, which have the potential to lend up to $1 million.

What Users Think About StreetShares Small Business Veteran Loans

StreetShares has glowing reviews from both investors and borrowers alike. Both say that StreetShares is simple and easy to work with, and that the company has great customer support. Negative reviews, of which there were very few, were primarily from potential borrowers who did not qualify. To hear more about what users think, visit our StreetShares reviews page.

 

Accion: Best Small Business Loans for Veterans Needing up to $1,000,000 From an Online Lender:

For veteran-owned small businesses needing higher loan amounts, Accion has one the highest maximum loan amounts (up to $1,000,000) of all of the best small business loans for veterans on our list. Interest rates range from 7% to 34% APR, with loan terms ranging from one to five years. When you apply for a loan from Accion, you will work with a loan expert who will help match your needs and qualifications with a loan product.

Accion Small Business Loans for Veterans Costs

A small business loan from Accion will have an interest rate ranging from 7% to 34%. Included in this APR is a loan origination fee that ranges from 3% to 5%, and an additional one-time loan processing fee of $135. Accion has no prepayment penalty, so you can save by paying your loan off in advance.

The rates and fees that you can anticipate with a small business loan for veterans from Accion are:

• Expected APR: 7% to 34% Fixed
• Origination fee: 3% to 5%
• Loan processing fee: $135
• Prepayment penalty: None

Accion is the only lender on our list that charges both a loan processing fee and a loan origination fee. However, the overall APR range of 7% to 34% is in line with other lenders, and closely matches StreetShares’ APR range of 7.19% to 29.9%.

Accion Small Business Loans for Veterans Terms

Accion offers small business loans for veterans in amounts ranging from $300 to $1,000,000. These loans have monthly payments and repayment terms of up to five years.

The loan terms that you can expect with a small business loan from Accion are:

• Loan amount: $300 to $1,000,000
• Loan term: Up to five years
• Repayment schedule: Monthly

Accion offers the widest range of loan amounts, and one of the highest maximum loan amounts available. The only other lender on our list that offers loans up to $1,000,000 is Chase, with the next highest being StreetShares at $250,000.

Accion Small Business Loans for Veterans Qualifications

To qualify for a small business loan for veterans from Accion, your business needs to have been operational for at least six months. Beyond that, the business owners need to have a personal credit score of at least 575, and your business needs to be producing annual revenues of at least $180,000.

The basic qualification requirements you can expect for a small business loan from Accion are:

• Time in business: At least six months
• Credit score: At least 575 (check your score for free)
• Gross annual revenues: $180,000

Accion has a lower time in business requirement than StreetShares, six months compared to one year, and a lower credit score requirement of 575 or higher versus StreetShares’ 600 or higher. However, while StreetShares only requires annual revenues of $25,000, Accion requires you to have $180,000 in annual revenues.

What Accion Veteran Business Loans Are Missing

Accion charges a loan processing fee of $135 as well as a loan origination fee of 3% to 5% of the amount borrowed. StreetShares, the other online lender on our list, also charges a loan origination fee of 2.95% to 4.95%, but does not charge an additional loan processing fee.

What Users Think About Accion Veteran Business Loans

We scoured the internet and were not able to find many reviews for Accion. The positive reviews shared that the lending process was quick and seamless, and that customer service was very helpful. Negative user reviews appeared to primarily be from potential borrowers who were not approved for a loan. You can learn more on our Accion reviews page.

 

Navy Federal Credit Union: Best Small Business Loans for Veterans for Existing Members

To receive a small business loan through Navy Federal Credit Union, you must be a member. If you are not already a member, you can open a Navy Federal account online to gain membership. Membership is open to veterans and their families nationwide, making veteran-owned businesses also eligible. Navy Federal Credit Union offers small business loans of up to $100,000, at interest rates ranging from 11% to 18% APR, with terms up to five years.

Navy Federal Credit Union Veteran Business Loan Costs

With a small business loan for veterans from Navy Federal Credit Union, you can expect to pay an interest rate in the range of 11% to 18% APR. Navy Federal Credit Union does not report that they charge any origination fees, nor do they charge any penalties for early payoff.

The rates and fees for a business loan for veterans from Navy Federal Credit Union are:

• Expected APR: 11% to 18% fixed
• Origination fee: None
• Prepayment penalty: None

Interest rates on small business loans for veterans through Navy Federal Credit Union fall in the middle range of the lenders that we reviewed. While StreetShares and Accion both have APRs that extend beyond the high APR for Navy Federal Credit Union, they also have the potential to have lower rates than Navy Federal Credit Union as well.

Navy Federal Credit Union Veteran Business Loan Terms

For veterans who are Navy Federal Credit Union members, the credit union offers small business loans in amounts ranging from $2,500 to $100,000. These loans have monthly payments and loan terms of up to five years.

The loan terms for a business loan for veterans from Navy Federal Credit Union are:

• Loan amount: $2,500 to $100,000
• Loan term: Up to five years
• Repayment schedule: Monthly

Of the four direct lenders on our list, Navy Federal Credit Union has the lowest maximum small business loan amount, at $100,000. StreetShares offers loans up to $250,000, while Accion and Chase offer loans up to $1,000,000.

Navy Federal Credit Union Veteran Business Loan Qualifications

While Navy Federal Credit Union does not list a specific value for required gross annual revenue, they will want to see that you have a debt service coverage ratio of 1.25x or better, a full year of business operations, and a credit score of 650 or higher. To obtain a business loan from Navy Federal Credit Union, you will need to be a credit union member, which can be accomplished by opening a deposit account.

The loan qualifications for a business loan for veterans from Navy Federal Credit Union are:

• Time in business: At least one year
• Credit score: At least 650 (check your score for free)
• Debt service coverage ratio: At least 1.25x

Traditional banks and credit unions often have more restrictive borrower qualification metrics than online lenders, which is why you will often see that they offer lower interest rates. Navy Federal Credit Union’s qualification requirements fall in line with Chase, the other traditional lender on our list.

What Navy Federal Credit Union Veteran Business Loans Are Missing

Navy Federal Credit Union requires that you be a member of the credit union in order to take advantage of its products. While this is the case with all credit unions, some people dislike or don’t understand the membership requirement.

However, in most cases, opening an account with the credit union by making a deposit is all it takes to become a member. If you aren’t interested in becoming a member of Navy Federal Credit Union, a small business loan through Accion may also meet your needs.

What Users Think About Navy Federal Credit Union Veteran Loans

Overall, user reviews for Navy Federal Credit Union were very positive. Customers enjoy their banking relationship with the credit union, and find the staff to be helpful and friendly. Negative user reviews were predominantly deposit customers who were unimpressed with fees that they were charged for overdrawing their accounts.

 

Chase: Best Small Business Loans for Veterans for Businesses Preferring a Traditional Bank

If you prefer doing your business banking in person with a traditional bank, Chase offers business loans for veterans in amounts from $10,000 to $1,000,000. Chase business loans offer interest rates from 4% to 13% APR, with terms of one to seven years. If you have one year of business operations, and a credit score of 650 or higher, you may qualify. Additionally, Chase is one of the top SBA lenders for 2018.

Chase Business Loan for Veterans Costs

With a small business loan for veterans from Chase, you can expect an APR ranging from 4% to 13%. Interest rates can be either fixed or variable, depending on your loan agreement. Additionally, Chase offers a discount to veteran-owned businesses of up to $500 off their origination fee, which ranges from 3% to 5% of the amount borrowed.

The rates and fees that you can expect with a small business loan from Chase are:

• Expected APR: 4% to 13% fixed or variable
• Origination fee: 3% to- 5% (less the veteran discount of up to $500)
• Prepayment penalty: None

Chase offers the lowest overall APR range of any of the providers on our list, with Navy Federal Credit Union being second with its APR range of 11% to 18%. Both StreetShares and Accion have APRs as low as 7%, but the higher end of the range exceeds both Chase and Navy Federal Credit Union.

Chase Business Loan for Veterans Terms

Chase offers small business loans for veterans in amounts ranging from $10,000 to $1,000,000. For amounts less than $10,000, they recommend applying for one of their business credit cards instead of a loan. Chase’s loan terms range from one to seven years.

The terms that you can expect with a small business loan for veterans from Chase are:

• Loan amount: $10,000 to $1,000,000
• Loan term: One to seven years
• Repayment schedule: Monthly

With loan terms extending up to seven years, Chase has the longest potential repayment term of any of the lenders on our list. Both Accion and Navy Federal Credit Union have shorter maximum terms, capping out at five years.

Chase Business Loan for Veterans Qualifications

To qualify for a small business loan for veterans from Chase, you need to have a credit score of at least 650 and one full year of business operations. Chase does not list the specific annual revenue requirements for small business loans, but you will need to have a debt service coverage ratio of 1.25x or better.

The qualification requirements that you can expect with a small business loan for veterans from Chase are:

• Time in business: At least one year
• Credit score: At least 650 (check your score for free)
• Debt service coverage ratio: At least 1.25x

As a traditional bank, Chase has higher credit requirements than other lenders that were reviewed. StreetShares requires a credit score of 600 or higher, and Accion only requires a credit score of 575 or higher.

What Chase Veteran Business Loans Are Missing

For most of Chase’s business lending products, you aren’t able to apply online. If you are not located in close proximity to a Chase branch, applying for a small business loan may be daunting, since you have to apply at one of their physical locations. StreetShares may better suit your needs if you prefer applying for financing online.

What Users Think About Chase Veteran Business Loans

There are a variety of both positive and negative reviews for Chase. Positive reviews were focused on their strong customer service skills, the promotional offerings that the bank has, and their online banking setup. Negative user reviews seemed to be primarily focused on customers who were dissatisfied with their credit cards. You can find out more about Chase on our Chase reviews page.

 

Hivers & Strivers: Best Alternative to a Small Business Loan for Veteran-owned Startups

Unlike the other companies on our list, Hivers & Strivers is not a lender, but rather an angel investment group that believes strongly in supporting veteran-owned businesses. Hivers & Strivers provides an average of $250,000 to veteran-owned businesses nationwide in the startup phase in exchange for an equity stake in your company, meaning that Hivers & Strivers will become a partial owner of your company.

Hivers & Strivers Veteran Funding Costs

Unlike a loan offered by a lender, funding from Hivers & Strivers does not have an interest rate, and does not require traditional repayment. Instead, with an investment from Hivers & Strivers, you are allowing them an equity stake (or partial ownership) in your business. This means that Hivers & Strivers will own a percentage of your business, and therefore be entitled to a portion of your profits if and when the investment company decides to cash out.

Hivers & Strivers Veteran Funding Terms

Hivers & Strivers offers non-recourse funding for your veteran-owned business startup, which means in the event that your business fails, you do not need to repay the money that they provided. Because they hold an equity stake in your business after their investment, they only make money if your business is profitable. To help ensure that you are operating profitably, they will have a presence on your board and help guide your business.

Having a representative from Hivers & Strivers on your board can be advantageous, as they will bring experience to the table and may be able to guide you away from making common business mistakes. However, this also means that you have to get board approval to make decisions that impact your business, which may be a dissuading factor in choosing this type of funding.

Hivers & Strivers Veteran Funding Qualifications

To qualify for investment funding from Hivers & Strivers, your business must be owned and operated by a military veteran. Hivers & Strivers believes that veterans make the strongest business owners, and only provide funding to veteran-owned businesses. Hivers & Strivers will want to review and discuss your business proposal, your cash flow projections, and your business plan to make an informed decision as to whether or not to invest in your company.

What Hivers & Strivers Veteran Business Funding Is Missing

Being an angel investment company, funding from Hivers & Strivers is not as easily accessible as financing from some of the other providers that made our list. Veteran-owned businesses that are looking for fast access to working capital, or that don’t want to relinquish ownership equity, may choose a small business loan or line of credit from another lender, like StreetShares.

What Users Think About Hivers & Strivers

Despite its 10-year history of providing funding to veteran-owned businesses, when we scoured the internet for user reviews for Hivers & Strivers, we were unable to find any, either positive or negative. This is likely due to the selective nature of the angel investment group. However, the company has received positive press from many sources for its investments in emerging veteran-owned businesses.

 

PenFed Foundation: Alternative Small Business Funding for Veterans Needing Seed Money

A unique small business financing opportunity for veteran-owned businesses, the PenFed Foundation offers a Veteran Entrepreneur Investment Program. This program provides financial assistance nationally to startup veteran-owned businesses by way of an equity stake or convertible note. To qualify, your business must be majority veteran-owned (50.1% or greater veteran ownership).

PenFed Foundation Veteran Business Financing Costs

There are no specified rates and fees for financing received from the PenFed Foundation through its Veteran Entrepreneur Investment Program. Each financing opportunity is evaluated independently by the board of the PenFed Foundation to determine the best financing option for the veteran-owned business and the Foundation.

The PenFed Foundation operates very similarly to Hivers & Strivers in that rather than simply lending your veteran-owned small business money, they are investing in you and your business. In some cases, like an angel investment firm, the PenFed Foundation may take an equity stake in your business. By taking an equity stake, the PenFed Foundation will become a partial owner of your company.

PenFed Foundation Financing for Veterans Terms

Rather than issue a term loan, PenFed Foundation invests money into your company. In return, they will claim an equity stake or issue a convertible note (which can later be converted into an equity payout). Therefore, if you are fortunate enough to have PenFed Foundation invest in your company, you will not have any immediate repayment of funds.

This exchange of capital for business equity is similar to Hivers & Strivers. It varies from the other providers that issue funding in the form of a loan that requires regular payments until the amount is repaid. While there’s no recurring cost to you, as there would be with a loan payment, when your business becomes successful and profitable, the investor may choose to cash out their equity percentage.

PenFed Foundation Financing for Veterans Qualifications

The only hard and fast qualification requirement that PenFed Foundation has for its financing is that the business must be majority veteran-owned (50.1% or greater). Financing decisions are then based on the feasibility of your business proposal and review by their board. You will likely be asked to provide a copy of your business proposal or pitch deck.

In this regard, PenFed Foundation is very similar to Hivers & Strivers, in that it is evaluating the strength of your business idea and your potential to succeed. Because these organizations are providing seed and startup funding and investing in your business, they only make money if you are successful in your venture. To increase your chances of being funded, you will need to have a well-developed business proposal and business plan.

What PenFed Foundation Veteran Financing Is Missing

The PenFed Foundation is relatively new, having only been established in 2018. As such, there isn’t a lot of information about it. In order to receive more information, you need to contact the company directly to get your questions answered. However, in our experience of contacting them, they are very friendly and happy to assist.

What Users Think About PenFed Foundation Veteran Financing

The PenFed Foundation was newly established in 2018 by PenFed Credit Union. As it is just beginning its Veteran Entrepreneur Investment Program, there are currently no reviews of the organization, either positive or negative. However, there is a lot of positive press about the organization and its efforts to help veterans.

 

Alternatives Small Business Loans for Veterans

If after reading through our list of top business loans for veterans you haven’t found a lending option that you feel fits your needs, there are additional financing options that you may want to consider. These alternative online lenders have products that can meet the needs of many businesses, including working capital loans, short-term loans, lines of credit, and SBA loans.

6 Alternative Small Business Loan for Veterans Options

OnDeck

If your veteran-owned business is considering a short-term loan, OnDeck offers small business loans up to $500,000 that can be funded within three days. OnDeck has very lenient qualification requirements; if you have at least one year of business operations, generate $100,000 or more in annual revenue, and a credit score of at least 550, you should qualify. Interest rates start as low as 9.99%.

BlueVine

For veteran-owned businesses that have recurring financial needs, BlueVine offers a revolving small business line of credit of up to $250,000, with repayment terms of either six months or 12 months. BlueVine charges a monthly fee on the amount borrowed, which can start as low as 0.8% per month. As a line of credit, you are able to reborrow the funds again as they are repaid (up to your line of credit amount) without needing to reapply for financing.

Kabbage

Another financing option for veteran-owned business is a small business line of credit from Kabbage. Lines of credit are offered in amounts ranging from $2,000 to $250,000, with repayment terms of either six or 12 months. Kabbage doesn’t charge interest, but rather a fixed monthly fee of 1.5% to 10% of the amount borrowed, resulting in an APR of 30% to 50%.

LoanBuilder

For veteran-owned businesses that can repay a loan within one year, LoanBuilder provides small business loans of up to $500,000. A loan from LoanBuilder requires weekly payments, and offers repayment terms between 13 and 52 weeks. To qualify for a small business loan from LoanBuilder, you need a credit score of at least 550 and annual revenues of at least $42,000.

SmartBiz

SmartBiz offers veteran-owned businesses SBA loans of up to $350,000. SBA loans are a great small business loan option due to their low interest rates, which range between 6% and 9%, and their long repayment terms of up to 10 years. You can typically qualify if you have two years of business operations, your business is profitable, and you have a 680 or higher credit score.

Bottom Line

While many lenders claim to make business loans to veterans, the loans they offer are no different than the ones that they offer to non-veterans. We have searched to find the best small business loans for veterans that either offer an additional benefit to veterans, or invest only in veterans.

StreetShares is one of the lenders that holds veterans in high regard, and strives to provide funding to veteran-owned businesses. StreetShares offers short-term loans and lines of credit of up to $250,000 at competitive interest rates. You can easily apply online, and receive funding within a couple of days.

Visit StreetShares