Best Business Loans For Veterans Of 2024 – Forbes Advisor

Best Business Loans for Veterans

BEST FOR SHORT-TERM LOANS

OnDeck

Why We Picked It

OnDeck was founded in 2006 and has since been a leading provider in the business lending space, offering both term loans and lines of credit. Today, they have extended $14 billion in funding to small businesses.

We picked OnDeck for its variety of business lending products and same-day funding. OnDeck offers a term loan from $5,000 to $250,000 with repayments terms of up to 24 months. You can also access a credit limit of $6,000 to $100,000 through its line of credit with a 12-month repayment term that resets after each withdrawal.

Note: OnDeck does not lend to businesses in Nevada, North Dakota or South Dakota. What’s more, while it lends to over 700 industries, there are some industries it cannot serve.

Pros & Cons

• Term loans from $5,000 to $250,000; lines of credit up to $100,000
• Same-day funding
• Low minimum credit score requirement

• $100,000 minimum annual revenue requirement
• Must have been operating for at least one year
• Does not lend to businesses in Nevada, North Dakota or South Dakota.

Details

Overview: OnDeck was founded in 2006 and has since been a leading provider in the business lending space, offering both term loans and lines of credit. To date, the company has extended $14 billion in funding to small businesses.

OnDeck doesn’t lend to businesses in Nevada, North Dakota or South Dakota. What’s more, while it lends to over 700 industries, there are some industries it cannot serve.

Turnaround time: You can apply and receive a decision from OnDeck on the same day.

BEST FOR FLEXIBLE LINES OF CREDIT

BlueVine

Why We Picked It

BlueVine is a financial technology company that provides financing solutions to small businesses nationwide. It specifically specializes in business lines of credit and checking accounts. As of December 2021, BlueVine no longer offers invoice factoring as one of its financing methods.

Small business owners looking to access a line of credit on an as-needed basis can receive funds between $6,000 and $250,000. BlueVine offers two payment structures: Flex 6 or Flex 12. Customers who choose Flex 6 make weekly payments over 26 weeks while Flex 12 customers make monthly payments over 12 months. What’s more, after 45 days of payment on Flex 6, or 90 days of payment on Flex 12, you may be eligible for a credit line increase.

BlueVine also charges weekly or monthly fees for its line of credit. Standard pricing is 1.7% per week or 7% per month for line of credit draws.

Note: BlueVine’s line of credit is available in all 50 U.S. states except North and South Dakota.

Pros & Cons

• Can get a decision within five minutes and funding within hours
• Lines of credit up to $250,000
• Low credit score requirement

• No mobile app for its line of credit
• Monthly revenue requirement
• Not available to businesses in North and South Dakota, Puerto Rico and U.S. territories

Details

Overview: BlueVine is a financial technology company that provides financing solutions to small businesses nationwide. It specializes in business lines of credit and checking accounts. As of December 2021, BlueVine no longer offers invoice factoring as one of its financing methods.

BlueVine’s line of credit is available in most U.S. states except North and South Dakota, Puerto Rico and U.S. territories.

Eligibility: Eligibility varies on the specific program a business owner chooses.

Turnaround time: After you submit your application, you can receive a decision in as quickly as five minutes.

BEST FOR SMALL- TO MID-SIZED VETERAN-OWNED BUSINESSES

National Funding

Why We Picked It

National Funding offers working capital small business loans from $10,000 to $500,000 with terms of four months to two years, paid daily or weekly. Borrowers can use their funds for all working capital needs, including inventory, payroll, marketing, taxes and more. National Funding also offers equipment financing Up to $150,000 but applicants must have a minimum personal credit score of 575 to qualify for that financing method.

Unlike most business lenders, National Funding offers early pay-off discounts. Small business loan customers who repay their total remaining balance in full within the first 100 days of the contract will automatically receive a 7% discount off the total remaining balance. Equipment financing customers who repay the total remaining balance early, at any point during the term, will automatically receive a 6% discount off the total remaining balance.

Pros & Cons

• Financing up to $500,000
• Early payoff discounts

• Requires daily or weekly payments
• Potential high borrowing costs
• Requires minimum gross annual sales of $250,000

Details

Eligibility: National Funding recommends a minimum credit score of 600 to qualify for its equipment financing. Your business must also have been in operation for at least six months. National Funding requires minimum gross annual sales of $250,000.

Turnaround time: Most of National Funding’s loans are disbursed within 24 hours of approval. However, this is subject to receipt of required documentation, underwriting guidelines and processing time by your bank.

BEST FOR SMALL AND LARGE LINES OF CREDIT

American Express® Business Line of Credit

Minimum Credit Score

660 FICO at the time of application

660 FICO at the time of application

Why We Picked It

American Express Business Blueprint™ is best for its American Express® Business Line of Credit (formerly Kabbage from American Express and Kabbage Funding™), which gives business owners the chance to secure funding between $2,000 to $250,000. Repayment terms include six, 12, 18 and 24 months.

Line of credit customers incur a loan fee for each month they have an outstanding balance. Total monthly fees incurred over the loan term range from 3% to 9% for six-month loans, 6% to 18% for 12-month loans, 9% to 27% for 18-month loans and 12% to 18% for 24-month loans.

In addition to its line of credit, American Express Business Blueprint provides other tools beneficial to small business owners, including its own mobile app that provides comprehensive cash flow insights.

Pros & Cons

• Backed by American Express
• No prepayment penalty

• Monthly fees on unpaid balances
• Requires personal guarantee

Details

Overview: American Express Business Blueprint™ is formerly Kabbage from American Express and Kabbage Funding™. Its American Express® Business Line of Credit gives borrowers a wide range of loan amounts with six-, 12-, 18- and 24-month repayment terms.

American Express Business Blueprint also provides other tools beneficial to small business owners, including its own mobile app that provides comprehensive cash flow insights.

Funding time: Funds can take up to three business days to appear in your account, depending on your bank.

BEST FOR QUICK APPROVALS

Fundbox

Why We Picked It

Fundbox is an AI-powered business lending platform that speeds up the application, decision-making and funding process. It offers decisions within three minutes and funds as soon as the next business day.

Prospective borrowers have two business financing options through Fundbox. Business owners can apply for revolving business lines of credit up to $150,000 with repayment terms of 12 or 24 weeks. Your available credit goes back up as you repay your line of credit.

Pros & Cons

• Receive a decision within three minutes
• Low minimum credit score requirement
• Next-day funding

• Only short-term repayment terms are available
• Relatively low lines up credit of up to $150,000

Details

Overview: Fundbox is an AI-powered business lending platform that speeds up the application, decision-making and funding process. It offers decisions within three minutes and funds as soon as the next business day.

Funding time: If you’re getting a line of credit, your funds transfer to your bank account as soon as the next business day.

BEST FOR ESTABLISHED VETERAN-OWNED BUSINESSES

Funding Circle

Learn More

From participating partners via businessloans.com’s website.

Why We Picked It

Funding Circle has been a direct lender specializing in small business loans since 2010. Since its inception, it has helped 100,000 businesses in 700 industries and lent $15.2 billion globally. We chose Funding Circle because it provides fast, affordable loans with a simple application process and funding in as little as 48 hours. Prospective borrowers have three options: business term loan, line of credit or SBA loan.

Funding Circle term loans range from $25,000 to $500,000 with repayment terms from six months to five years. If you choose to apply for a business line of credit, you can access credit lines between $6,000 and $100,000. However, Funding Circle doesn’t specify its line of credit repayment terms. You can also apply for SBA loans, which range from $25,000 to $500,000 with terms up to 10 years.

There are two main drawbacks of Funding Circle. First, there’s a one-time origination fee on each loan ranging from 3.49% to 6.99% of the approved loan amount. Second, due to state lending regulations, Funding Circle does not lend to businesses that operate out of Nevada, making it available in only 49 of the 50 U.S. states.

Pros & Cons

• Loans up to $500,000
• Funding in as little as 48 hours
• No minimum annual revenue requirement

• One-time origination fee between 3.49% to 6.99% of the approved loan amount
• Requires two years in business
• Not available for Nevada businesses

Details

Eligibility: The minimum qualifications for a loan through Funding Circle are:

• Two years in business
• Minimum personal credit score of 660
• No personal bankruptcies amongst the business owners within the last seven years
• Not available in Nevada, due to state lending regulations

SBA loans, however, require two years in business, a minimum credit score of 650, a minimum annual revenue of at least $400,000, no current federal tax liens and that your business operates in one of the SBA’s eligible industries.

Turnaround time: Depending on the financing method you apply for, you can receive your funds within two to three days. However, SBA loans may take several weeks due to long underwriting turnaround times, which typically take up to three weeks.

BEST FOR LOAN OPTIONS

Biz2Credit

Minimum Credit Score

650*

*See Website For Details

650*

*See Website For Details

Why We Picked It

Biz2Credit is a business financing lender that provides three loan options—term, working capital and commercial real estate (CRE) loans—ranging from $25,000 to $6 million. It only takes a few minutes to apply and, depending on the loan type, 24 hours to receive a decision.

can connect business owners with working capital loans from $25,000 to $2 million and term loans between $25,000 to $500,000. Working capital loans are paid back with your business receipts through daily, weekly or bimonthly payments while term loans are repaid through weekly, bimonthly or monthly payments over the course of 12 to 36 months. Biz2Credit also offers CRE loans from $250,000 to $6 million with terms between 12 and 36 months; payments are due monthly.

In the event that Biz2Credit cannot provide a financial product, it may present third-party options to qualified prospective borrowers. However, Biz2Credit confirms that “in the vast majority of cases, [it] will make a financing decision without referral to any external party.”

Pros & Cons

• Less stringent qualification requirements for revenue-based financing
• Quick online application, approval and funding process

• More stringent qualification requirements for term and CRE loans
• Revenue-Based financing require daily, weekly or bimonthly payments
• CRE loans approvals can take up to 30 days

Details

Eligibility: To qualify for revenue-based financing, applicants must have a minimum personal credit score of 650*, have been operating their business for at least six months and have annual revenue greater than $100,000. Term loans, on the other hand, require a minimum score of 650*, 12 months+ in business and annual revenue greater than $250,000. CRE loans share the same minimum requirements as term loans but also require that prospective borrowers already own commercial property.

Funding time: Business owners can typically apply online fast and get a decision fast (see website for details). However, CRE loan approvals may take longer.

Summary: Best Business Loans for Veterans

Methodology

We reviewed 26 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders based on the weighting assigned to each category:

• Loan cost: 35%
• Loan details: 25%
• Customer experience: 20%
• Eligibility and accessibility: 10%
• Application process: 10%

Within each major category, we also considered several characteristics, including available loan amounts, repayment terms and applicable fees. We also looked at minimum credit score and time in business requirements and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like online applications, prequalification options and mobile apps.

Where appropriate, we awarded partial points depending on how well a lender met each criterion.

To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.

Tips for Comparing Business Loans for Veterans

Consider these tips when comparing business loans for veterans:

• Consider credit unions that cater to veterans. Online lenders typically offer more favorable loans than credit unions. However, because most credit unions require memberships, they often offer additional member perks and discounts. You typically won’t see these perks at a bank or online lender; those institutions generally offer autopay discounts only. Consider which is more valuable to you.
• Determine how you want to receive your funds. Two of the most common ways you can receive and access your business funds are through a lump-sum payment or on an as-needed basis. If you want to receive your funds up front, choose a traditional working capital or term loan. However, if you want to use funds only as you need them, consider a business line of credit.
• Look out for additional fees. Some lenders offer fee-free business loans that don’t require borrowers to pay origination fees, late payment fees, prepayment penalties or other common loan costs. However, this is not always the case. Be sure to confirm a lender’s fee structure when shopping for the best terms. Factor in additional fees into your decision-making process.
• Evaluate the lender’s customer support options. If you’ve found a lender that’s prepared to offer the money you need at acceptable terms, consider the lender’s support options before signing the loan agreement. Customer support can make a huge difference down the line if you encounter issues with repayment. Research the lender’s customer service resources and read reviews to make sure it’s a good fit.

Types of Business Loans for Veterans

Traditional financial institutions like banks and credit unions may offer small business loans as well as financial products aimed at veterans. That said, eligible veteran-owned businesses can also borrow funds from a number of other sources.

Online Loans

Online business loans are a common source of funds for businesses, including those owned by veterans. The loans often come with less rigorous qualification requirements than financing offered by traditional business lenders and may offer more flexible loan amounts and repayment terms. Many online lenders also offer a variety of financial products, including equipment financing and invoice factoring, in addition to standard term loans and lines of credit.

Keep in mind, however, that these more accessible loans typically have higher annual percentage rates (APRs) than their traditional counterparts. This makes them more expensive—especially to business owners who don’t qualify for the most competitive rates.

SBA Veterans Advantage Program

The SBA’s Veterans Advantage program reduces guaranty fees for certain types of SBA 7(a) loans going to veteran-owned small businesses. The program was originally initiated by the Obama administration in 2014 to offer fee relief under the SBA Express program and, after expiring in 2015, was replaced with the current savings structure. Under the program, fee relief is available to small businesses that are at least 51% owned and controlled by one of the following:

• Honorably discharged veterans
• Service-disabled veterans
• Active duty military service member eligible for the military’s Transition Assistance Program (TAP)
• Reservists and/or active National Guard members
• Current spouse of any veteran, active duty service member, Reservist, National Guard member or the widowed spouse of a service member who died while in service or as a result of a service-connected disability

SBA Express Loan

SBA Express loans are part of the 7(a) loan program and offer qualified business owners up to $500,000. Funds can be accessed as a line of credit or lump-sum term loan, and the SBA waives guaranty fees for businesses that are owned and controlled (51% ownership or more) by veterans, certain active duty military and other applicants who qualify based on military service and their spouses.

Up to 50% of loan funds are guaranteed by the SBA and, while interest rates are lender-specific, they may not exceed the maximum imposed by the SBA (5% or 6%, depending on the loan amount). Most notable, however, is the turnaround time—prospective borrowers can expect a response to their application within 36 hours.

Military Reservist Economic Injury Disaster Loan

The Military Reservist Economic Injury Disaster Loan (MREIDL) program is reserved for businesses that have an essential employee who is a military reservist called to active duty. Loans are available up to $2 million and come with a 4% interest rate. Repayment terms extend up to 30 years, with no prepayment penalty or fees.

While an MREIDL is a flexible borrowing option for qualified businesses, collateral—something of value that backs the loan—is required for loans larger than $50,000. Funds can be used only for ordinary and necessary operating expenses—not to cover lost income or lost profits. What’s more, MREIDL loan funds may not be used to expand the business, and are not available in place of regular commercial debt or to refinance other debt.

How To Get a Business Loan as a Veteran

Getting a business loan as a veteran starts with shopping around to see what funding will provide you the most benefit. Here’s a rundown of steps to take:

1. Review SBA loan options. The SBA’s website has a loan search tool where you can input information about your business to connect with lenders providing SBA loans with veterans benefits.
2. Gather veteran documentation. You may be required to provide documents—such as Form DD 214, Certificate of Release or Discharge from Active Duty or a military ID—to qualify for benefits like a fee waiver on government-backed business loans. Speak to your lender to find out what forms are needed.
3. Check out what other lenders have to offer. Loans offered by online lenders and credit unions that aren’t geared specifically to veterans could offer affordable rates, flexible repayment terms and quick funding. Comparing these options against government-backed business loans can help you determine the best type of financing.
4. Submit your application. Lenders will ask for information about you and your business to complete the full application for the loan. This could include submitting documents like tax returns and financial statements to show financial history. A business plan, financial projections and collateral may also be required.
5. Wait for approval. Once approved, you’ll get loan documents to review and sign before receiving business funding. The time from application to funding can vary by lender. Some online lenders can approve you and get you loan funds within a few days, while SBA loans can take several months to process.

Small Business Grants for Veterans

In addition to small business loans available to veterans, there are several grants that can help entrepreneurial veterans and military spouses start and grow their businesses. Unlike loans, grants do not require repayment, though some cash infusions may require an exchange of ownership interest. Here are some veteran-specific grants to consider:

• StreetShares Foundation. The StreetShares Foundation is a nonprofit organization that aims to support entrepreneurial members of the military, including veterans. The Veteran Small Business Award grant program connects qualified veterans with the funds they need to start and grow their businesses, while also providing educational resources and events.
• The Global Good Fund Veterans Leadership Program. Offered through a partnership with The Smithfield Foundation (Smithfield Foods Inc.), The Global Good Fund supports veteran business owners through funding and leadership resources. Eligible veterans get access to leadership resources, a global network of like-minded peers, and professional leadership coaches and business mentors, as well as targeted funding.
• Hivers & Strivers Angel Fund. Though not technically a grant program, Hivers & Strivers is an angel investment group that provides funding between $250,000 and $1 million to companies led by military veterans. In addition to financial investments, Hivers & Strivers provides businesses with the guidance and expertise needed to succeed.

There are also a number of business resources tailored to the needs of entrepreneurial veterans and military spouses. For example, Bunker Labs’ Launch Lab Online offers online courses and programs to teach veterans about the fundamentals of entrepreneurship through an online learning platform.

Financing Options for Veteran-owned Startups

Generally speaking, new businesses pose more risk to lenders, making it more difficult for startups to get the financing they need—especially at competitive rates. If you own a startup, consider these alternative financing options.

SBA Microloan Program

New veteran-owned businesses can take advantage of the SBA’s microloan program, which offers funds for working capital and other expenses to eligible businesses in underserved communities.

This often includes veterans (as well as women and minorities). Loans are available up to $50,000 with repayment terms up to six years. APRs vary by individual lender but typically range from 8% to 13%.

Business Credit Card

If you don’t qualify for an SBA microloan, consider a business credit card. Interest rates are generally higher for credit cards (anywhere from 10% to 35%), but you’ll only pay interest on what you borrow—and you won’t pay any interest if you pay off your card each month. Depending on your credit score, you may also qualify for a 0% introductory APR offer.

Veteran Personal Loan

Alternatively, it may be possible to qualify for a veteran personal loan based on your personal credit score, income or assets like your house. However, not all personal loan lenders allow using the funds for business purposes.

SBA Business Growth Resources for Veteran-owned Business

In addition to trying to get a small business loan, veteran-owned businesses can take advantage of training programs and growth resources offered through the SBA. Consider these programs if you want to strengthen your leadership skills and grow as an entrepreneur:

• Boots to Business. The Boots to Business (B2B) program offers business training programs, including the Introduction to Entrepreneurship course, B2B Revenue Readiness online course, and additional resources offered through the SBA and its network of business development partners.
• Women Veteran Entrepreneurship Training Program (WVETP). Committed specifically to women veterans, women service members, and women spouses of service members and veterans, the WVETP offers several training programs. Resources funded by the SBA include Our Native American Business Network (ONABEN), Lift Fund – San Antonio and IVMF – Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE).
• Service-Disabled Veteran Entrepreneurship Training Program (SDVETP). Similar to WVETP, the SDVETP focuses on entrepreneurship training programs for service-disabled veterans. Programs are available to current or aspiring business owners, and include IVMF – Entrepreneurship Bootcamp for Veterans with Disabilities (EBV), Veterans Entrepreneurship Program (VEP) and Dog Tag Inc.
• Veteran Federal Procurement Entrepreneurship Training Program. Other SBA veteran resources focus on general entrepreneurship training, but the Veteran Federal Procurement Entrepreneurship Training Program (VFPETP) is specific to veteran-owned businesses that are engaged in federal procurement.

¹The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.

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