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5 Best Small-Business Loans for Veterans of March 2021

Small-business loan options for veterans include loans for working capital, expansion and unpaid customer invoices.

Steve NicastroFebruary 17, 2021
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Veterans who are entrepreneurs — like all entrepreneurs — may need funding at various stages of running a small business. The Small Business Administration previously offered a Veterans Advantage loan to help with these costs, but that program has been discontinued.

That means if you're a veteran or active-duty servicemember, the best small-business loan will be the one that offers the most favorable terms to meet your needs — whether that’s hiring new employees, purchasing equipment or covering other costs.

Here are the best business loans for veterans, plus more information on VA loans and other financing resources.

LOOKING FOR CORONAVIRUS BENEFITS INFORMATION?

CARES Act: Coronavirus relief and SBA loans for small businesses.

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Our picks for

Fast Cash

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OnDeck - Online term loan

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Est. APR

9.00 - 99.00%

Min. Credit Score

600

OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.

Pros

  • Cash can be available within the same business day.
  • Requires low minimum credit score.
  • Less paperwork than most lenders.

Cons

  • Fixed-fee structure means early repayment will not save interest.
  • Requires frequent (daily or weekly) repayments.
  • Requires business lien and personal guarantee.
Read full review

Qualifications:

  • Minimum credit score: 600.
  • Minimum time in business: 1 year.
  • Minimum annual revenue: $100,000.
  • No bankruptcies in the past 2 years.

Our pick for

Working capital

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BlueVine - Line of credit

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Est. APR

15.00 - 78.00%

Min. Credit Score

650

BlueVine's line of credit provides fast working capital for short-term borrowing needs. NOTE: BlueVine has temporarily paused applications for this product to prioritize PPP funding.

Pros

  • Cash can be available within 12 to 24 hours.
  • Multiple term lengths for different financing needs.

Cons

  • Short repayment term results in higher payment amounts.
  • Requires personal guarantee.
  • Not available in North Dakota, South Dakota or Vermont.
Read full review

Qualifications:

  • 6-month line of credit
  • Minimum credit score: 650.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $360,000.
  • 12-month line of credit
  • Minimum credit score: 650.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $360,000.

Our pick for

Expansion financing

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Top SBA Lenders

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Max Loan

$5k - $5M

Terms

5 - 25 years

Est. APR

Starting at 5.5%

Speed

As fast as 2 weeks

SBA loans work best for established businesses that prioritize low lending costs over funding speed.

Pros

  • Lowest down payments.
  • Longest payment terms.
  • Reasonable interest rates.

Cons

  • More paperwork than online term loans.
  • Longer approval time.
  • May require collateral.
Learn more

Qualifications:

  • Be a U.S. business.
  • Must first use alternative financial resources, including personal assets.
  • Approved SBA lenders will almost always have credit score minimums between 620-640.
  • Average successful applicant has an annual revenue of over $180,000.
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Credibility Capital - Online term loan

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Est. APR

19.99 - 24.99%

Min. Credit Score

650

Credibility Capital offers low-cost business loans that work best for small-business owners with strong credit.

Pros

  • Competitive rates among online lenders.
  • No prepayment penalty.
  • Extra monthly payments can save interest cost.

Cons

  • Requires high minimum credit score and revenue.
  • Requires business lien and may require personal guarantee.
  • Not available in Nevada, North Dakota, South Dakota or Vermont.
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Qualifications:

  • Minimum credit score: 650.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $200,000.
  • No bankruptcies in the past 5 years.

Our pick for

Businesses with unpaid customer invoices

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BlueVine - Invoice factoring

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Est. APR

15.00 - 68.00%

Min. Credit Score

530

BlueVine has temporarily paused applications for this product to prioritize PPP funding.

Pros

  • Finances larger invoices.
  • Cash can be available within the same day.
  • Accepts low minimum credit score and short time in business.

Cons

  • Not for businesses that do not invoice on net terms.
  • Loan amount is tied to the value of your invoices.
  • Dependency on customers to pay their bills on time.
Read full review

Qualifications:

  • Minimum credit score: 530.
  • Minimum time in business: 3 months.
  • Minimum annual revenue: $120,000.

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Summary of Best Small-Business Loans for Veterans of March 2021

LenderBest ForEst. APRMin. Credit ScoreNext Steps

OnDeck - Online term loan

Best for Fast cash9.00 - 99.00%600
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BlueVine - Line of credit

Best for Working capital15.00 - 78.00%650
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Top SBA Lenders

Best for Expansion financingStarting at 6%620
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Credibility Capital - Online term loan

Best for Expansion financing19.99 - 24.99%650
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BlueVine - Invoice factoring

Best for Businesses with unpaid customer invoices15.00 - 68.00%530
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Can you get a VA business loan?

The Department of Veterans Affairs does not provide business loans. But a different government agency — the Small Business Administration — previously offered discounted loans to veterans via the Veterans Advantage lending program, also known as "VA loans."

VA loans reduced or eliminated fees on SBA 7(a) loans for veteran-owned businesses. This program is no longer available, but veterans can still apply for other SBA loans.

SBA loans are available through banks, credit unions and other lenders. The government partially guarantees SBA loans, so lenders may offer you a lower interest rate or more flexible terms. However, strict underwriting criteria and a long application process may make other options — like an online lender — better fit your needs.

Other SBA programs for veterans or servicemembers include:

  • Military Reservist Economic Injury Disaster Loan Program. The MREIDL can provide up to $2 million if you have an essential employee who is a military reservist and gets called to active duty. This program is for covering regular business operating costs, not starting or expanding a business.
  • SBA 8(a) program. The SBA offers this business development program to eligible businesses, which can include those owned by veterans. The SBA 8(a) program provides small businesses with a certification that can improve their chances of winning government contracts, as well as help navigating the bidding process.
  • Patriot Express Pilot Program. This program offered low-interest Patriot Express Loans to veterans and other members of the military community. Patriot Express Loans were discontinued in 2013.

Are there startup business loans for veterans?

Lenders generally prefer to do business with established companies that have strong cash flow. This often disqualifies startups with less than a year of operating history and little revenue.

However, veterans and other new business owners aren't completely out of luck: If you have good personal credit, your options include business credit cards and personal business loans.

  • Business credit cards. These typically provide up to $50,000 in revolving credit, meaning you can borrow and repay from the credit card as needed, and pay interest only on withdrawn funds.
  • Personal loans for business. These offer a lump sum of cash, with a fixed interest rate and repayment terms.

Both options are unsecured, meaning you won’t have to put down collateral — an asset, such as real estate or inventory — to qualify.

Comparing small-business loans for veterans

When shopping for a loan, be sure to compare annual percentage rates, or APRs, which give you a holistic picture of a loan's cost. NerdWallet's small-business loans comparison tool can help. We've gauged lender trustworthiness, market scope and user experience, among other factors to help you choose the best loan.

If you're a veteran or related to a servicemember, look at lenders that cater to the military. Some may not offer funding; for example, USAA’s business loan program ended in 2018. But discounts may be available from other lenders. Bank of America reduces loan administration or origination fees 25% for veterans, for instance.

For other financial resources for veterans, check out our list of small-business grants for veterans or personal loans for veterans. The SBA also offers Veterans Business Outreach Centers across the nation.

Last updated on February 17, 2021

To recap our selections...

NerdWallet's Best Small-Business Loans for Veterans of March 2021

Frequently Asked Questions

Veteran entrepreneurs can get small-business loans and lines of credit through online lenders, banks and credit unions. Factors impacting your approval include your personal credit score, annual revenue and time in business.

The Small Business Administration’s Veterans Advantage lending program is no longer available. Veterans can apply for non-discounted SBA loans, as well as small-business loans from banks, credit unions and other lenders.