Best Small Business Loans for Veterans of 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.

Lending Partner
APR Range
Loan Amount
Term
  • Kabbage
    APR Range
    Varies
    Loan Amount
    Up to $250K
    Term
    6–18 months
    Check rates
    on lender’s secure website
  • Bluevine
    Bluevine
    APR Range
    15%–88%
    Loan Amount
    Up to $250,000
    Term
    Varies
    Check Rates
    on lender’s secure website
  • OnDeck
    Logo for OnDeck
    APR Range
    16.9%–99.4%
    Loan Amount
    $5K–$50K
    Term
    3–36 months
    Check Rates
    on lender’s secure website
In this article

    The 5 best small business veteran loans of 2020

     APRLoan AmountTermsKey Benefit
    Street Shares9-40%$2,000–$100,0003–36 monthsStarted by veterans
    KabbageVariesUp to $250,0006, 12, and 18 monthsAdditional business services available
    Bank of AmericaStarting at 3.00%$10,000–$100,00012-60 months25% fee discount for veterans
    Smart Biz7.99%–24.99%$30,000–$5,000,0002-5 yearsBest for lender matching
    National FundingUndisclosed$5,000–$500,000UndisclosedEquipment leases available

    The 5 best small business veteran loans of 2020

    Best Overall – StreetShares

    While Street Shares does lend to civilians, the company’s main focus is on providing effective and affordable small business loans to veterans.

    APR Range
    9%–40%
    Loan Amount
    $2K–$100K
    Term
    3 months–3 years
    SimpleScore
    4 / 5.0
    close
    SimpleScore StreetShares 4
    APR 4
    Max Credit Line Amount 5
    Draw Period 4
    Resources 5
    Fees 2

    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.

    Best for short-term loans – Kabbage

    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.

    APR Range
    Varies
    Loan Amount
    Up to $250K
    Term
    6–18 months
    SimpleScore
    2.8 / 5.0
    close
    SimpleScore Kabbage 2.8
    Median APR 1
    Max Loan Size 3
    Product Variety 2
    Resources 5
    Fees 3

    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.

    Kabbage Disclosure

    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.

    Best for vehicle financing – Bank of America

    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.

    APR Range
    as low as 3.00%
    Loan Amount
    $10K–$100K
    Term
    12–60 months
    SimpleScore
    3.8 / 5.0
    close
    SimpleScore Bank of America 3.8
    Rates 4
    Loan Size 4
    Product Variety 2
    Resources 5
    Fees 4

    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.

    Best SBA loan marketplace – SmartBiz

    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.

    APR Range
    7.99%–24.99%
    Loan Amount
    $30K–$500K
    Term
    2–5 years
    SimpleScore
    3.4 / 5.0
    close
    SimpleScore SmartBiz 3.4
    Median APR 3
    Loan Amount 4
    Product Variety 3
    Resources 5
    Fees 2

    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.

    Best for bad credit – National Funding

    Veteran business owners having trouble getting approved for loans elsewhere may want to take a serious look at National Funding. The company states it can approve some applicants with credit scores as low as 500. Additionally, the company can get you funding in as little as 24 hours in some cases.

    APR Range
    Undisclosed
    Loan Amount
    $5K–$500K
    Term
    Undisclosed
    SimpleScore
    4 / 5.0
    close
    SimpleScore National Funding 4
    Median APR N/A
    Loan Amount 4
    Product Variety 4
    Resources 5
    Fees 3

    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.

    Check Your Business Loan Rates

    View our top-rated lenders and find the best rates today. It’s quick and easy.

    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.

    We welcome your feedback on this article and would love to hear about your experience with the business loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

    Methodology

    SimpleScore

    We’ve created the SimpleScore to help you objectively compare products and services here at The Simple Dollar.

    Our editorial team:

    • Identifies five factors to compare across each brand
    • Determines the rating criteria for each factor
    • Calculate an average of those five factor scores to get one SimpleScore™

    We break down each of these five factors and their rating criteria for our review of the best auto loan companies of 2020.

     

    Why do some brands have different SimpleScore on different pages?

    Some brands offer a variety of financial products, which is why they have different SimpleScores on different pages. We rate individual products that brands offer — not the brand as a whole. 

    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.

    Median APR

    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.

    Product variety

    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.

    Educational Resources

    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

    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

    Contributing Writer

    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

    Reviewed by

    • Courtney Mihocik
      Courtney Mihocik
      Editor

      Courtney Mihocik is an editor at The Simple Dollar who specializes in insurance, personal finance, and loans. Previously, she wrote and edited for Interest.com, PersonalLoans.org, Ballantyne Magazine, Thread Magazine, The Post, ACRN, The New Political, Columbus Alive and the Institute for International Journalism.