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.
The 5 best small business veteran loans of 2020
- Street Shares – Best overall
- Kabbage – Best for short-term loans
- Bank of America – Best for vehicle financing
- Smart Biz – Best SBA loan marketplace
- National Funding – Best for bad credit
|APR||Loan Amount||Terms||Key Benefit|
|Street Shares||Not listed||$2,000 – $250,000||3 to 36 months||Best Price Guarantee|
|Kabbage||1.5% – 10.00%||Up to $250,000||6, 12, and 18 months||Additional business services available|
|Bank of America||Starting at 3.00%||$25,000 – $5,000,000||Up to 25 years||25% fee discount for veterans|
|Smart Biz||4.75% – 7.00%||$30,000 – $5,000,000||10 – 25 years||Best for lender matching|
|National Funding||5% – 8%||$5,000 – $500,000||3 to 5 years||Equipment leases available|
The 5 best small business veteran loans of 2020
Street Shares – Best overall
While Street Shares does lend to civilians, the company’s main focus is on providing effective and affordable small business loans to veterans. 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 – Best for short-term loans
Kabbage small business loans are a solid option for many funding needs, especially short-term loans for small or large amounts. 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.
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.
Bank of America – Best for vehicle financing
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.
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.
Smart Biz – Best SBA loan marketplace
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.
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.
National Funding – Best for bad credit
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.
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.
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.
The bottom line
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.