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Veterans have many options when it comes to funding their small businesses, and if you know where to look, you can even find business loans for veterans with bad credit.
Shannon has been writing for Merchant Maverick about small business software and financing since 2015. She started writing professionally about business topics in 2005. Shannon has been featured in the Washington Post, Reader's Digest, US News, MSN, Yahoo Finance, Business Insider, and other publications. She has a bachelor's degree in English from San Diego State University and currently resides in San Diego, California.
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Shannon VissersShannon has been writing for Merchant Maverick about small business software and financing since 2015. She started writing professionally about business topics in 2005. Shannon has been featured in the Washington Post, Reader's Digest, US News, MSN, Yahoo Finance, Business Insider, and other publications. She has a bachelor's degree in English from San Diego State University and currently resides in San Diego, California.
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Erica has been writing about small business finance and technology since 2008. She joined Merchant Maverick in 2018 and specializes in researching and reviewing business software, financial products, and other topics to help small businesses manage and grow their operations. Her expertise has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll, a graduate of Limestone University, and currently resides in Greenville, South Carolina.
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Erica SeppalaErica has been writing about small business finance and technology since 2008. She joined Merchant Maverick in 2018 and specializes in researching and reviewing business software, financial products, and other topics to help small businesses manage and grow their operations. Her expertise has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll, a graduate of Limestone University, and currently resides in Greenville, South Carolina.
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The best business loans for veterans offer good terms, low rates, and reasonable fees. The best options include not only SBA loans, but also alternative veteran business loans, such as short-term loans or business lines of credit.
These online loans can also be a good alternative to SBA loans for veterans who need a fast business loan, who have been in business less than two years, or who have poor or fair credit.
Read on to learn about the best small business loans for veterans.
Here are five types of loans veterans can get to maintain, expand, or start a small business.
SBA Loan: Low interest, backed by the SBA; can get directly from bank or online
Working Capital Loan: Includes term loans and lines of credit; can be online or from a bank
Short-Term Loan: Business loan with term length of <2 years; almost exclusively offered by online lenders
Startup Business Loan: Loans for businesses with <6 months in business; includes online business loans and online personal loans
Line Of Credit: Credit line that business owner can draw from as needed; can be from bank or online lender
The type of business loan your veteran business will be eligible for depends on your credit score, time in business, and business revenues. Veterans with startup businesses and/or bad credit will generally only qualify for the types of business loans offered by online lenders.
The Best Business Loans For Veterans
Here are our favorite veteran loans for small businesses. These lenders offer fair terms and reasonable rates to veteran-owned small businesses. Using one of these alternative business lenders, you might qualify for a SBA loan, short-term loan, startup loan, line of credit, or even a bad credit loan.
SmartBiz: Best SBA Loans For Veteran-Owned Businesses
Funding takes longer than other types of online loans
Unsuited for startups
Why We Chose SmartBiz For SBA Loans
SmartBiz is the #1 facilitator of SBA loans under $500K. That's probably because this lender offers online SBA loans with a fast turnaround time, an easy application process, and low interest rates. Beyond SBA loans, Smartbiz also offers bank term loans (non-SBA loans) and lines of credit.
SmartBiz is a smart choice for veterans who want to get an SBA loan but are frustrated by the lengthy signup process and want a faster turnaround -- as soon as a week. SmartBiz can determine your loan eligibility in just a few minutes.
SmartBiz Rates & Fees
Interest rates on SmartBiz SBA loans range Prime Rate plus 2.75% to 6.5% with repayment terms of 10 years. Loan amounts range from $50,000 to $500,000.
SmartBiz Eligibility Requirements
SmartBiz SBA loans are most appropriate for established veteran-owned businesses with at least fair credit (650 FICO) and 2 years in business.
Sufficient cash flow to support repayments is also required.
When To Use SmartBiz
You want a more convenient way to apply for and receive an SBA loan.
OnDeck is America's largest small business lender with 15+ years in the industry. OnDeck specializes in short-term business financing, offering short-term loans up to $250,000 and lines of credit up to $100,000. Borrower qualifications are far less stringent than those of banks; veterans with fair credit can easily qualify as long as they have strong business credentials.
OnDeck’s loans typically aren’t the cheapest, but they are quite fast -- you can potentially get the funds to expand your vet-owned small business within just 24 hours, or even the same day you apply. Startups should look elsewhere for financing, as OnDeck will not lend to businesses that have been operating for less than 12 months.
OnDeck Rates & Fees
OnDeck’s rates start at 29.9%, but the average borrower’s APR is closer to 50 or 60%. OnDeck’s fees include both interest on the loan as well as an origination fee that’s taken off the top of the loan. The origination fee may be waived on subsequent loans.
OnDeck Eligibility Requirements
OnDeck’s requirements for funding are:
Personal credit score of 625
At least 12 monthsin business
Business revenue of $100,000/year
Business checking account
When To Use OnDeck
You want a small, fast loan to help grow your business and build your business credit score.
Why We Chose BusinessLoans.com For Established Businesses
BusinessLoans.com is a business lending marketplace that allows you to apply for and compare multiple lenders at once. Though BusinessLoans.com has options for bad credit businesses and newer businesses, most loans offered through the service are better suited to veterans with established businesses.
If you meet the borrower criteria, you will have many options to choose from at this one-stop-shop for veteran business loans.
BusinessLoans.com Rates & Fees
Since BusinessLoans.com works with many different lenders, your rates and fees will vary depending on which lender you choose. Using the lending marketplace itself is free.
BusinessLoans.com Eligibility Requirements
BusinessLoans.com has no stated minimum credit score, time in business, or business revenue requirements to apply for funding.
However, most loans available through the service require at least 6 months in business and $100,000/year in revenue.
When To Use BusinessLoans.com
You have been in business at least 6 months and want to see what types of financing you qualify for.
Many veterans leave the military with low credit scores because their careers have prevented them from participating in credit-building activities, such as paying off a mortgage. Credibly is one of the few reputable small business lenders that might lend your business capital even if you have poor credit.
Credibly is an online lender offering short-term working capital loans, business lines of credit, merchant cash advances, equipment loans, invoice factoring, and more. Credibly is fast and reliable, offering multiple bad credit business loan options for veteran businesses.
Credibly Rates & Fees
Credibly offers mostly short-term financing products, whose total cost is normally calculated using something called a factor rate. In Credibly’s case, factor rates start at 1.11. Term loans are also subject to a 2.5% origination fee.
Credibly Eligibility Requirements
Credibly requires the following to qualify for funding:
Revenue of $15,000/month
Time in business of at least 6 months
Minimum credit score of 500
Some Credibly products may have stricter eligibility requirements; these minimums apply to working capital loans and merchant cash advances.
When To Use Credibly
You have bad credit but steady monthly revenues and need a fast loan.
Fundbox offers an easy-to-qualify-for business line of credit. A line of credit is useful for veteran businesses with ongoing working capital needs, since you can draw from it whenever you need funds and your line replenishes as you repay.
While most business lines of credit require at least a year or two in business, Fundbox will (in some cases) accept businesses that have been in operation for at least 3 months. Fundbox is also suitable for startups with bad credit.
Fundbox Rates & Fees
Fundbox repayment takes place weekly, with a maximum term length of 24 weeks. Fees start at 4.66%+ (12-week terms) or 8.99%+ (24-week terms). You can choose your term every time you make a draw, and you will see the total cost and schedule of each repayment upfront.
Fundbox Eligibility Requirements
Fundbox requires:
A credit score of 600 (which is lower than most other LOCs)
$30,000/year in annual business revenues.
At least 3 months in business
When To Use Fundbox
Your business credentials don’t qualify you for a bank loan, but you need a fast, convenient line of credit to draw from as needed.
Rates can be high if you don’t have excellent credit
Why We Chose Bluevine For Speed
Bluevine is a little harder to qualify for than the other LOC lenders on our list, but qualified veteran-owned businesses can borrow larger amounts with Bluevine -- up to $250,000. Bluevine is also extremely fast, offering same-day loans. Once Bluevine approves your application -- your initial pre-approval decision will take about 5 minutes -- you can have funds deposited in your bank account within a few hours, provided that you choose the $15 bank wire option.
Additionally, Bluevine offers longer term lengths than other online business lines of credit (6 months or 12 months). And if you prefer a loan, Bluevine can help you get a term loan through one of its lending partners.
Bluevine Rates & Fees
Bluevine APRs start at 7.8%. Bluevine charges interest on each weekly repayment, but there are no monthly fees, and you can repay your draw early at no penalty.
Bluevine Eligibility Requirements
Bluevine requires:
2 yearsin business
Credit score of 625
$10,000/monthin business revenue
When To Use Bluevine
You have an established business and need a fast line of credit you can start drawing from immediately.
Business Loan & Funding Products Review Methodology
We spend hours researching and evaluating each business loan and funding product that we review at Merchant Maverick, placing special emphasis on key characteristics to generate our ratings.
Weighted Rating Breakdown
Rates & Fees 20%
Services 20%
Eligibility Requirements 20%
Application 15%
Sales & Advertising Transparency 10%
Customer Service 10%
User Reviews 5%
When rating lenders and funding providers, we use a 31-point rubric that looks at rates and fees, services, eligibility requirements, application, sales and advertising transparency, customer service, and user reviews. We weigh each section differently to calculate the total star rating. This rubric is applied to traditional term loans, as well as short-term loans, start-up loans, lines of credit, online lending products, merchant cash advances, and equipment financing products.
Rates & Fees: 20% of the total star rating
Services: 20% of the total star rating
Eligibility Requirements: 20% of the total star rating
Application: 15% of the total star rating
Sales & Advertising Transparency: 10% of the total star rating
Customer Support: 5% of the total star rating
User Reviews: 5% of the total star rating
Each section is further broken down into granular, weighted subsections, in which we examine specific attributes like terms lengths, conditions of repayment, credit score and revenue requirements, ease of application, length of time to funding, the ethics involved in promoting the lending product, customer support, and the overall reputation of the lender or funding provider.
Additional Funding Resources For Veteran-Owned Businesses
Don’t qualify for funding yet? Need more help finding options? Consider the following funding ideas for veteran-owned businesses.
Get Certified As A Veteran-Owned Business: Getting certified as a veteran-owned business can increase your appeal to lenders and win federal contracts; service-disabled veteran-owned businesses may qualify for a separate federal contracting program.
Contact Your Bank Or Credit Union: You may be able to obtain a business loan through your bank or credit union if you already have a good business relationship with them.
Look Into Nonprofit Lenders: One example of a nonprofit lender for veterans is the Veterans Business Fund.
Look Into Angel Investors: These organizations can help your veteran-owned business obtain startup funds. Example: Hivers and Strivers.
Research Business Grants: See if you qualify for any business grants for veterans — for example, there are special grants for veteran farmers and grants for veteran franchise owners.
Contact Your LocalSBA Office: They may be able to provide additional information on programs for veteran business owners. The Office of Veterans Business Development, SCORE, and Boots to Business are all SBA-powered programs that offer business training and mentoring to veterans.
ConsiderNon-Government Resources: Some examples of non-government resources for veteran business owners include VetToCEO, the Global Good Fund, and the Coalition for Veteran-Owned Businesses.
How To Get A Veteran Business Loan
1) Draft A Business Plan
Most lenders will want to see a business plan so they know what you plan to do with the funds you’re asking for before they lend you money. Don’t have an updated business plan? Learn how to draft a one-page business plan.
2) Check Credit Score
Make sure you know your credit score so you don’t waste time applying for loans you don’t qualify for based on your credit. In addition to checking your personal credit score with the Equifax, Experian, and TransUnion credit bureaus (you’re entitled to one free credit report from each of these agencies, per year), also be sure to check your business credit score.
Lenders will often check your business’s website, social media, and online reviews when making lending decisions. All of these elements together make up your online presence.
6) Compare Qualifying Lenders
Once you know your funding needs and what loans you qualify for, it’s time to compare small business lenders. Pay attention not just to the maximum loan amounts and the fees, but also to the repayment frequency and term length since these factors will make a big impact on your payments.
7) Start Applying
If you are well-prepared by taking the above actions, applying for loans should go pretty smoothly. You’ll simply need to prove you can meet the business loan requirements for the financing product you want, supplying all the needed documentation you gathered earlier.
Which Loan Is Right For Your Veteran-Owned Business?
To determine which small business loan is right for your veteran-owned business, first consider your qualifications, including time in business, credit score, and business revenues, and see which lender(s) you qualify for. You’ll also want to consider which lenders can offer the amount of funding you need, with a payment schedule you can afford.
Shannon has been writing for Merchant Maverick about small business software and financing since 2015. She started writing professionally about business topics in 2005. Shannon has been featured in the Washington Post, Reader's Digest, US News, MSN, Yahoo Finance, Business Insider, and other publications. She has a bachelor's degree in English from San Diego State University and currently resides in San Diego, California.
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The vendors that appear on this list were chosen by subject matter experts on the basis of product quality, wide usage and availability, and positive reputation.
Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user reviews. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services. The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships.
Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.
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