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Best Small Business Loans for Veterans of 2021
Jason Lee – Contributing Writer Last Updated: August 24, 2020
As a veteran business owner, you know the importance of keeping your business in the fight and striking while the iron is hot. The best small business loans for veterans help former men and women of the United States armed forces achieve their strategic goals. This includes things like purchasing new equipment, correcting short-term cash flow shortages, buying additional materials, delivering on existing orders, weathering a short-term issue or taking advantage of a time-sensitive opportunity.
The best small business loans for veterans are simple to apply for, have a low cost of borrowing and can get you the funds you need when you need them.
Up to 18 months
*There are some industries we cannot serve (see list of restricted industries), as well as some industries and states impacted by the Coronavirus to which we are temporarily not lending. In addition, OnDeck does not lend to businesses in Nevada, North Dakota or South Dakota. OnDeck is no longer accepting new Paycheck Protection Program (PPP) loan applications. Registration terms and conditions apply. Instant Funding registration and withdrawals are currently supported from your desktop and the OnDeck mobile website. They are not currently supported in the OnDeck mobile app. Occasionally, transfer may take up to 30 minutes to complete due to potential Visa & bank processing lags. This benefit is available at no additional cost with a vast majority of major banks participating. Instant Funding is available for transactions between $1K-$10K.
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The company offers term loans up to $250,000 with repayment terms up to three years. If you’re still deciding on the type of funding you need, Street Shares also offers lines of credit up to $250,000 and contract financing with no cap.
The application process takes about seven minutes and can be completed online or over the phone with an agent. Small business loans from Street Shares are available with no application fee and no prepayment penalty. In order to qualify, you must be a U.S. resident, in business for at least a year, earn a minimum amount of revenue and have a business guarantor with reasonable credit.
The multiple options, streamlined application process and propensity to help veteran-owned businesses make Street Shares our pick for the best overall option. Additionally, Street Shares states the company will match any lending offer from a comparable lender.
Kabbage small business loans are a solid option for many funding needs, especially short-term loans for small or large amountsLoans are available for six-, 12- or 18-month terms with rate fees spanning from 1.5% to 10% of the principal loan amount. If you’re looking for a short-term financing option, six-month loans are available for as little as $500.
Up to $250K
2.8 / 5.0
SimpleScore Kabbage 2.8
Median APR 1
Max Loan Size 3
Product Variety 2
It’s important to note that Kabbage loans are actually a line of credit. Loans are available for six-, 12- or 18-month terms with rate fees spanning from 1.5% to 10% of the principal loan amount. If you’re looking for a short-term financing option, six-month loans are available for as little as $500.
The benefits of this are that you will only pay fees for the money that you actually use. Additionally, there are no prepayment penalties, making Kabbage one of the best solutions for short-term financing. The company also offers additional business services, including being a full-service payment processing solution.It’s important to note that Kabbage loans are actually a line of credit. The benefits of this are that you will only pay fees for the money that you actually use. Additionally, there are no prepayment penalties, making Kabbage one of the best solutions for short-term financing. The company also offers additional business services, including being a full-service payment processing solution.
1. Kabbage Checking account opening is subject to identity verification.
2. The annual percentage yield (“APY”) is accurate as of 7/15/20 and may change at our discretion at any time. The APY is applied to deposit balances on the funds within your primary Kabbage debit account and each individual Wallet. We use the average daily balance method to calculate interest.
3. Beginning January 1, 2021, Kabbage Payments customers will pay 2.9% + $0.25 per card not present transaction. There is currently a 2.5% payment processing charge per gift certificate purchase from our partners that facilitate the service.
Bank of America small business loans come in all shapes, sizes and types. Loans are available for commercial real estate, lines of credit, SBA loans, health care practice loans and equipment loans. What is nice is the bank clearly lays out all the requirements needed for each type of funding, as well as the repayment options and available rates. Additionally, veterans can get 25% off of their loan fees through Bank of America.
as low as 3.00%
3.8 / 5.0
SimpleScore Bank of America 3.8
Loan Size 4
Product Variety 2
One of the standout offerings from Bank of America is the equipment loan. Vehicle loans are available from $25,000, with interest rates starting at 3%. You will need to have at least $250,000 in annual revenue and have been in business under the same ownership for at least two years. If you’re an existing Bank of America client with status, additional rate discounts may be available.
If you’re looking to get matched with the best lender for your unique needs, Smart Biz might be the right fit. Smart Biz is a small business lending marketplace. The company uses sophisticated technology to match prospective borrowers with the right lender. You can get two types of business funding through Smart Biz — bank term loans and SBA loans.
3.4 / 5.0
SimpleScore SmartBiz 3.4
Median APR 3
Loan Amount 4
Product Variety 3
SBA loans are available up to $5 million, with rates between 4.75% and 7% and repayment terms of 10 to 25 years. Bank term loans are available up to $350,000, with rates between 6.99% and 23.99% and repayment terms of 2 to 5 years. Qualification for a term loan from the company requires at least two years in business, cash flow to support loan payments and business owners must have personal credit scores of at least 640.
If you’re looking for equipment financing or leasing, National Funding has options. What’s most impressive is the minimum qualifications are only six months in business and a FICO credit score over 575. It’s clear that National Funding is available to help veteran business owners with less-than-great credit.
How to improve your credit score
One of the most significant factors lenders assess when determining approval for a small business loan is your credit score. Your credit score gives the lender a snapshot of your likelihood to default on a loan within the next few years. The higher your credit score, the more likely you are to get loan approval, and the lower your interest rate will be.
Some of the things you can do to raise your credit score include checking your existing report for errors, disputing discrepancies, increasing your available credit and continuing to make on-time payments on your existing debt obligations. Raising your credit score does not happen overnight, but repetitively doing the right thing will gradually bring it up, helping your approval chances and offered interest rates.
Small business loan alternatives for veterans
When you need money for your business, you have more options than just a small business loan. One of the most popular alternatives is a line of credit. Similar to a personal credit card, a lender will approve you for a set amount of money. The approved funds are revolving, meaning you can continually reuse them again and again after you pay them off without the need to reapply. Often, lines of credit are available without the need for collateral.
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Veterans can also explore business grants available through the Small Business Association. Grants are government-funded money with no repayment or interest measures. However, some grants have certain stipulations and eligibility requirements such as length in business and industry.
Business owners can also try crowdfunding to get the cash flow needed to start special projects. There’s nothing like a community coming together to support a business. Ask for friends, community members and family to donate over a period of time to reach your funding goal. It’s best to keep these goals to a reasonable amount, as it can be difficult to reach higher amounts on platforms like GoFundMe.
Too long, didn’t read?
The best small business loans for veterans are easy to apply for, offer competitive APR rates and help business owners to accomplish their goals in the timeframe they need to. Veteran small business loans can help with short-term needs, longer-term needs and even for those people that may not have the best borrowing history. When you need funding to continue growth, correct a short-term problem or take advantage of an opportunity, small business loans can be a powerful tool forward.
We welcome your feedback on this article and would love to hear about your experience with the business loans we recommend. Contact us at firstname.lastname@example.org with comments or questions.
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Identifies five factors to compare across each brand
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For instance, in our American Express personal loans review we rated the company a 4.25 out of 5 based on rates, loan amount, customer satisfaction, customer support and fees. In our review of the best small business loan rates, American Express earned a 3.4 out of 5 SimpleScore based on its business loan product. By tailoring our SimpleScore to each financial solution, we’re able to give you a more accurate view of each brands’ services and how they compare to competitors’ products.
Lenders with a lower median APR are awarded higher scores — because even if you’re APR is average, your business is not.
Maximum loan size
Lenders that dole out loans with high maximums are also rewarded with higher scores. It takes money to run a business, and businesses need access to as much capital as it takes.
Need more than just a business loan? Lenders that offer more than one type of financial product for businesses score higher than others that don’t.
We gave out higher scores to lenders that have the following subjects covered in their blogs: loans, marketing, employee and staff, and credit or finance resources.
Fees can add up fast and eat into operating costs –– that’s why we give a higher score to lenders that have fewer fees.
Jason Lee is a U.S.-based freelance writer with a passion for writing about dating, banking, tech, personal growth, food and personal finance. As a business owner, relationship strategist, and officer in the U.S. military, Jason enjoys sharing his unique knowledge base and skill sets with the rest of the world. Follow Jason on Facebook here
Courtney Mihocik is an editor at The Simple Dollar who specializes in personal loans, student loans, auto loans, and debt consolidation loans. She is a former writer and contributing editor to Interest.com, PersonalLoans.org, and elsewhere.