Compare Small Business Loans
If you’re a veteran and an owner of a small business, there are resources and lenders that offer specific financing options for military veterans starting or growing their businesses. To help you make a decision, we researched over 30 different lenders and loan programs to find some of the best small business loans for veterans. Below we’ve gathered our top picks for financing for veteran small business owners and entrepreneurs.
Best Overall Pick for Veterans: StreetShares
- Loan amount: $2,000 - $250,000
- Rates: 8.00% - 39.99% APR
- Term: 3 - 36 months
- Min. Credit Score Required: 620
StreetShares is our top pick for business loans for veterans because of its transparent rates, flexible forms of financing and focus on serving veterans. The small-business lending market is notorious for its lack of transparency. While many online lenders have taken advantage of this fact by masking the true costs of their loans, StreetShares makes every effort to clearly display its APRs. It’s also different from other online lenders in that ity offers multiple financing products with term loans, business lines of credit and contract financing. However, it’s also similar to other online lenders in that it can process applications and provide funding within just a few business days. It’s one of the more lenient lenders in the market, as it carries relatively lenient requirements, which makes it a suitable choice for veterans with poor credit.
A glaring downside to StreetShares is that businesses are limited to loans of 20% of their annual revenue. Thus, if you need a large loan but don't have significant cash flows, your best bet might be elsewhere.
Best Small-Business Loan for Veterans with Bad Credit: QuarterSpot
- Loan amount: $5,000 - $250,000
- Rates: 20.00% - 48.00% APR
- Term: 9, 12 or 18 months
- Min. Credit Score Required: 550
QuarterSpot only requires a minimum personal credit score of 550 to qualify for a loan, which is one of the most lenient credit score requirements in the market. Additionally, it offers comparatively large loans up to $250,000, which makes its loans a flexible financing option for a variety of needs.
QuarterSpot's loans are on the larger spectrum in the market, especially when compared to other lenders who also accept borrowers with weaker credit scores. It is tough to find a borrower who accepts borrowers with weaker credit scores and even tougher to find one who is willing to lend large amounts. Borrowers will pay for these conveniences through their APRs, which are on the higher end compared to other options in the market.
Best Small-Business Loan for Veterans with Strong Credit: SBA Express Loans
- Loan amount: Up to $350,000
- Rates: 4.5% - 11.5%
- Term: Varies by lender
- Min. Credit Score Required: Varies by lender
The Small Business Administration (SBA) offers an Express Loan program that is typically the most competitive option in the market. The SBA lends through existing lenders like banks rather than issuing loans directly. However, it does set a maximum rate, which is the Prime Rate + 6.5%. The SBA's rate limits change as the market rates change.
Borrowers can take out a maximum of $350,000, which makes Express Loans some of the larger loans available. Applications are also usually processes within 36 hours, which makes it comparable to loans from online lenders.
Best Small-Business Startup Loans for Veterans: Accion
- Loan amount: $300 - $1 million
- Rates: 7.50% - 34.00% APR
- Term: 6 months to 25 years
- Min. Credit Score Required: 575
Accion offers loans with lenient credit score requirements and educational tools built specifically for veterans. It's a competitive lender for military veterans new to owning a business because of its more lenient requirements and helpful information that it provides.
Accion is a nonprofit organization that offers loans for underserved businesses, and the organization is committed to helping veterans qualify for funding if they are not currently eligible by offering workshops and resources. For example, Accion has partnered with Syracuse University’s Institute for Veteran and Military Families to offer these programs to veterans and their spouses. If you aren’t eligible for a loan now, with Accion’s assistance, you may qualify to apply again in as few as three months.
Best Small-Business Grants for Veterans: BusinessUSA
- Variety of state and federal financing programs
- Specific financing programs for veterans
- Loan and grant amounts and terms vary
- Eligibility requirements vary
The United States government's BusinessUSA website is one of the best places to look for federal and state financing programs for your small business, especially if you are a veteran. While BusinessUSA does not offer loans or grants directly, it shows all government financing options for which you may be eligible. To see your financing options, you’ll need to fill out a questionnaire that asks about your business’ location, planned use of the funds, special group status (e.g., veterans, women, minorities, etc.) and industry of your business. After filling in the questionnaire, you’ll see a list of all state and federal programs you may qualify for, preferred private lenders in your state, SBA microlenders and SBA offices in your state. You can also access BusinessUSA through the VA Entrepreneur Portal.
Business grants are largely attractive because of the notion that they're completely free. However, keep in mind that competition is usually tough for grants and that competing for a grant can take a significant amount of time and resources. Some grants may require multiple in-person interviews or detailed reports of your business' strategy.
Best Small-Business Loans for Businesses with Active Duty Employees: SBA MREIDL
- 4% interest rate
- Terms up to 30 years
- Loans up to $2 million
- Funding times vary (first come, first served)
- Stricter eligibility requirements
If you have an employee called to active duty, SBA Military Reservist Economic Injury Disaster Loans (MREIDL) are great loans to help recover the opportunity cost of your employee called to serve. The U.S. Small Business Administration offers MREIDL for small businesses that cannot cover typical expenses because an essential employee must temporarily leave to fulfill his or her position in the military. The loan is meant for working capital and cannot be used for debt refinancing or business expansion.
You can apply online beginning on the day that your employee is called to active duty until one year after the employee completes his or her duty. To apply, you will need income tax returns from the past three years, personal financial statements and current business balance sheets. After you complete your application, an inspector sent by the SBA will assess any damage costs. Borrowers will be pleased to see low rates of 4% with terms that can go as long as 30 years, which are both extremely competitive rates and flexible terms. While the maximum loan amount is $2 million, the SBA can offer larger amounts if the business is an important source of employment in its community.
Summary of BestSmall-Business Loans for Veterans
For quick comparison, we've summarized our findings on the best lenders and loan programs for veteran small business owners in the table below.
|Veterans overall||StreetShares||8.00% - 39.99%|
|Veterans with lower credit scores||QuarterSpot||20.00% - 48.00%|
|Veterans with good credit||SBA Express and Community Advantage loans||8.00% - 10.00%|
|Small business start-up loans||Accion||7.50% - 34.00%|
|Small business grants||BusinessUSA||N/A|
|Veterans with employees called to active duty||SBA MREIDL loans||4.00%|
What to Consider When Getting a Business Loan as a Veteran
When applying for small-business funding as a veteran, you should consider your specific situation to see what special programs and benefits you can qualify for. As we showed above, there are many programs that are specifically for veterans that offer lower interest rates, educational resources or grants. While there are many products specifically for veteran small-business owners, you may also want to consider a conventional bank loan or a loan from an alternative lender for particular circumstances.
Banks can offer large loans up to several million, making them a good option for significant investment in your business (i.e., purchasing real estate or long-term machinery/equipment). If you need money quickly or can't qualify for a bank loan, you may want to consider an online loan from an alternative lender. Many of these alternative lenders can fund loan offers within several days, and while APRs are higher, you can still get a good rate if you have strong qualifications. Alternative lenders are also a better choice if you need a smaller loan amount (i.e., $50,000 to $200,000) but need more than a microloan.