Veterans account for a significant percentage of small business owners in the United States. While there are many programs, and resources available to help veteran-owned businesses, securing a loan can be difficult. In this article, we’ll look at ten business loans that’ll help veteran-owned businesses secure the funding they need to grow.
What Is a Small Business Loan for Veterans?
A veteran business loan is a type of loan specifically designed for veterans who are starting or running a small business. These loans can be used for a variety of purposes, including financing working capital, buying equipment or inventory, or refinancing debt. They are typically offered by banks and other financial institutions and can be used to finance a wide range of small businesses.
How Can a Veteran Qualify for a Business Loan?
There are multiple qualifications a veteran or active duty service member participating in the military’s Transition Assistance Program must meet to be qualified for a loan, such as:
- A good credit score. Your personal credit score will be one of the first things a lender looks at when considering you for a loan. A high credit score indicates to lenders that you’re a low-risk borrower and are more likely to repay your loan on time.
- Collateral. Many lenders will require you to put up some form of collateral, such as your home or another piece of property, to secure a loan. This gives the lender a way to recoup their losses if you default on your loan.
- A solid business plan. Before you apply for a loan, it’s important to have a clear and well-defined business plan. This will show lenders that you’re serious about your business and have a good understanding of what it will take to be successful.
- Veteran status. There are several veteran-specific business loans available, so it’s important to let lenders know that you’re a veteran when you’re applying for financing. Doing so will give you access to loans with better terms that you may not otherwise be eligible for.
- READ MORE: 30 Best Franchises for Veterans
Top Small Business Loans for Veterans
The Small Business Administration (SBA) not only offers training programs but several veteran business loans. There are also numerous private lenders that offer veteran-friendly loans. Here are some of the top small business loans for veterans:
1. Small Business Administration Loans
The SBA offers several loan programs to help businesses grow and expand. The SBA Veterans Advantage Program is designed specifically for veterans, service-disabled Vets, and military spouses. The SBA7(a) and SBA Express loans are available to businesses with a minimum credit score of 650.
The Military Reservist Economic Injury Disaster Loan Program (MREIDL) is available to service-disabled Veterans who have suffered economic injury as a result of being called to active duty. The SBA also has the Office of Veterans Business Development which promotes Veteran entrepreneurship.
2. Navy Federal Credit Union
Navy Federal Credit Union offers a business line of credit, vehicle loans, equipment loans, and term loans for working capital. The minimum credit score requirement is 650, and the maximum loan amount is $100,000. The estimated APR range is 11% to 18%.
3. LoanBuilder
LoanBuilder is a lending platform owned by PayPal. The platform offers loans up to $500,000 with a maximum term of 12 months. The minimum credit score required is 620, and borrowers are required to make weekly repayments.
4. PNC Bank
PNC Bank is a great option for a line of credit. The minimum credit score required is 720, and the maximum loan amount is $100,000. The APR range is 12.99% to 14.99%, which is competitive compared to other lenders.
5. Fundbox
Fundbox is a line of credit designed for small businesses. The minimum credit score required is 600, and the maximum loan amount is $150,000. The APR ranges from 10.10% to 79.80%. FundBox is an option for Veterans with a low credit score.
6. Bluevine
Bluevine is a company that provides lines of credit to small businesses. The maximum loan amount is $250,000 and the minimum credit score is 625. The APR ranges from 15.00% to 78.00%. This too is a decent option for Veterans with low credit.
7. Kabbage
Kabbage is a well-known company that provides small businesses with the capital they need to grow and succeed. Kabbage offers loans up to $250,000 and requires a minimum credit score of 640.
The company also requires that businesses generate at least $3,000 in monthly revenue and at least one year in business.
8. Credibility Capital
Credibility Capital is a credible online term loan provider. Their minimum credit score requirement is 650, and their estimated APR ranges from 6.99% to 24.99%. This makes them a reliable option for Veteran borrowers with good credit scores. Additionally, their maximum loan amount is $500,000, making them a good choice for those looking for a larger loan.
9. SmartBiz
SmartBiz offers online SBA loans with low-interest rates to established Vet-owned businesses. The maximum loan amount is $5 million and the minimum credit score is 650. These loans can be used for a variety of purposes, such as working capital, equipment purchases, or business expansion.
10. OnDeck
OnDeck offers online term loans up to $250,000 for businesses with a credit score of at least 600. The APR on these loans ranges from 29.90% to 97.30%.
OnDeck is one of the leading providers of online term loans, and its loans are designed to help businesses grow and expand. However, the high APR makes these loans a less attractive option for many borrowers.
How Hard Is It For Veteran Business Owners to Get a Business Loan?
Veteran-owned small businesses can have a harder time getting business loans than other small businesses. This is because the lenders might see them as a higher risk, since they may not have as much experience in running a business.
However, there are some programs available specifically for veteran-owned businesses, so it is worth checking into those if you are a veteran looking to start a small business.
How Much Can You Get with a VA Business Loan?
A VA loan offers veterans and active-duty servicemembers the opportunity to borrow up to $350,0000 for their business with one to five-year terms. The loan can be used for a variety of purposes, such as starting or expanding a business, purchasing equipment or inventory, or refinancing debt.
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