Best VA Small Business Loans
To find the best small business loans for veterans, we looked at loan terms and conditions, requirements, amounts, and accessibility.
Last Updated: November 20, 2024
According to the 2012 U.S. Census Bureau’s Survey of Business Owners, 2.52 million businesses in the United States were majority-owned by veterans, and 99.9 percent were small businesses.
Veteran-owned companies had annual payrolls of 195 billion dollars, employing over 5 million people.
Interestingly, almost all of these businesses fell into two distinct industries--construction on the one hand, and professional, scientific, and technical services on the other.
Most of these firms are small, with one to nineteen accounting for a little over 80 percent.
These figures were gathered by the Small Business Administration (SBA) which has made this segment of the market a research priority since 1999
Veterans Entrepreneurship and Small Business Development Act, as part of its advocacy for veteran entrepreneurship.
What Is the Secret to the Success of Veteran-Owned Businesses?
The reasons for veteran entrepreneurship care manifold, though some financial experts attribute veterans' business successes to lessons learned in the military: the ability to thrive in small groups and unique situations, flexibility, leadership skills, teamwork, competitive spirit, mission-orientation, and focus.
For many veterans, transitioning back to a regular civilian lifestyle can be difficult. Embracing the development and sustainability of their own small business may be a response to finding that working a simple 9-to-5 job lacks something of the challenging nature of the military.
In fact, even businesses that aren’t veteran-owned have turned to ex-service personnel in their hiring practices, creating military programs for active recruitment of veteran personnel.
This has come as a result of seeing how well military talent and leadership lends itself to business objectives, thanks to above-average performance levels.
2 Steps to a VA Small Business Loan
All small businesses will likely require outside funding during some stage of their development. Influxes of cash may be needed to purchase equipment, deal with short-term expenses, or hire new employees.
Obtaining finance may be more difficult for veterans, however, since they may have gaps in their financial history due to time in active duty.
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Determine Your Need
When you start looking for a VA small business loan, the first thing to figure out is what your greatest need is. Are you a startup, or are you growing so fast you need capital for expansion? Do you have a mountain of unpaid invoices dragging you down financially? Is it working capital that you need?
Setting your goals and priorities (including approximate budgeting), will make it easier to work on the next step, which is deciding the type of loan most suited to your need.
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Which VA Small Business Loans Are Available for Me?
As you read about small business loan programs designed for veterans, you’ll find that the Small Business Administration (SBA) holds a prominent place in most lists. This makes sense, as its Office of Veterans Business Development is dedicated to maximizing the SBA’s programs, creating opportunities for veterans, service-disabled veterans, reserve component members, and their various dependents and survivors.
SBA Loan Options for Veterans
SBA resources designed specifically for veterans include the Entrepreneurship Bootcamp for Veterans (EBV) program, government certification as a veteran-owned business, and the Small Business Administration's (SBA) Boots2Business.
The SBA also offers three types of so-called VA loans, though the money does not originate from the Veterans Administration. These three loans are actually loan guarantees that the SBA provides to veterans and their spouses, with special benefits through the Veterans Advantage program. For loan products, the SBA supports veterans by providing access to business counseling and training, as well as capital and business development opportunities through government contracts.
SBA 7(a): This loan provides up to $5 million in funds for both veterans and non-veterans—however, with the Veteran’s Advantage program, there are no upfront guaranty fees for loans $125,000 and under, and a fifty percent discount for loans over that amount. The funds from these loans can be used for working capital, start-up costs, real estate or equipment purchases, inventory, business expansion, contracting, setting up the business for possible deployment, recovery from declared disasters, or hiring business management personnel.
SBA Express Loan: This loan is open to both vets and non-vets, but again, the Veteran’s Advantage Program waives all guaranty fees. Borrowers can access up to $350,000 in funds. The SBA Express can be used for all the same purposes as the SBA 7 (a).
Military Reservist Economic Injury Disaster (MREIDL) Loan: This loan offers working capital to businesses whose principal owner has been called up for military service, resulting in the company being unable to meet its obligations.
SBA 8(a) Service-Disabled Veteran-Owned Business Contracting Program: Though technically not a loan per se, this program aids small business owners who have been harmed in the line of duty to obtain a specific amount of government contracts.
Alternative Lenders
Many veterans may find that obtaining small business loans is a challenge, forcing them to submit more applications than the average consumer, while generally getting approved for less money than they were looking for.
According to a report from November 2018, published jointly by the SBA and the Federal Reserve Bank of New York, there may be several different reasons why veterans seem to have to jump through hoops to get approval for their small business loans.
Veterans usually apply for small loans of $100,000 or under, which aren’t preferred by big banks. In addition, the military lifestyle itself may make building a solid credit history next to impossible.
It may also be possible that not knowing enough about the resources available to them may also make it difficult to locate the opportunities for veterans. For instance, PenFed Foundation, in cooperation with the PenFed Credit Union, launched an initiative in April 2018 to provide seed capital for veteran-owned startups.
Given the particular needs of our country's service members, and also the special programs and assistance for which they may qualify, we've compiled this list of the best small business loan providers for veterans. We encourage you to get quotes from several lending institutions, and not limit yourself to veteran-specific programs.
Most financial institutions provide access to different types of small business loans with varying terms and qualifications. Traditional banks may be best suited to larger loans, good for creating significant investment in your business.
Alternative lenders can be excellent choices for getting money fast, or if you’re finding it difficult to meet the requirements of more traditional lenders. Alternative lenders can also be better for borrowers looking for a small amount that’s still larger than a microloan.
Top 4 VA Small Business Loans
#1
Our Partner
OnDeck conveniently offers small business loans for veterans of up to $500,000 that are ideal for expansion capital, with more speed and fewer qualifications than a traditional lender. They also provide expert, intensively trained advisors to help assess each borrower's business, across a range of 700 different industries. OnDeck's commitment to encouraging and developing veteran-run small businesses is evidenced by their flexible terms and rates based on the business’ performance, and not solely on personal credit history. In less than ten minutes, OnDeck's loan applications are available both online or over the phone. Businesses generally receive responses within minutes, and access to funds in as little as 24 hours. Though their minimum personal credit score requirement for term loans is just 500, most of their borrowers' scores are 660 or higher. Average gross revenue for businesses that receive funding generally exceeds $450,000, and they have a median of seven years in operation.
#2
Our Partner
LendingTree connects veterans looking for small business and funding partners from their network. The online platform offers the widest variety of small business loan types, including short term loans, term loans, business lines of credit, working capital loans, equipment loans, and accounts receivable financing. LendingTree has helped finance over 40 million people, and is one of the largest and most respected online lenders in the industry. The application process is simple and straightforward, and can be completed in minutes. They then put former servicemember borrowers in contact with a maximum of four lenders, greatly increasing the chances of obtaining better rates and loan terms.
#3
Our Partner
Kabbage looks at a business' accounting, banking and e-commerce data to determine loan approval. Their minimal reliance on credit scores makes them an ideal fit for former servicemembers with problematic credit histories. Kabbage's loans for veterans with rocky credit histories, however, can be expensive, with a complicated fee structure and annual percentage rates between 24% and 99%. Borrowers looking for speedy access to working capital will find Kabbage an ideal fit, as they may be approved and funded in the space of a few days. Most of their loans are given to borrowers with credit scores above 500, but Kabbage mainly evaluates the company's linked accounts, average monthly revenue and number of years in business.
#4
Our Partner
Fundbox links vets seeking a loan with small business lenders, brokers, and private investors who provide loans with low rates and affordable payments. They not only work with existing companies, but also with startups, and hard to place loans. Fundbox loans are best used for invoice financing for up to $100,000. It's also a great option if you are a veteran with less than stellar credit, as they don't have a minimum credit requirement or a minimum time in business. Funding time is excellent, averaging between 1-3 days. One thing to keep in mind, however, is that your business must use software compatible with Fundbox, such as QuickBooks, FreshBooks or Xero.
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Best Overall
Our Partner
OnDeck conveniently offers small business loans for veterans of up to $500,000 that are ideal for expansion capital, with more speed and fewer qualifications than a traditional lender. They also provide expert, intensively trained advisors to help assess each borrower's business, across a range of 700 different industries. OnDeck's commitment to encouraging and developing veteran-run small businesses is evidenced by their flexible terms and rates based on the business’ performance, and not solely on personal credit history. In less than ten minutes, OnDeck's loan applications are available both online or over the phone. Businesses generally receive responses within minutes, and access to funds in as little as 24 hours. Though their minimum personal credit score requirement for term loans is just 500, most of their borrowers' scores are 660 or higher. Average gross revenue for businesses that receive funding generally exceeds $450,000, and they have a median of seven years in operation.
Partner Disclosures & Disclaimers:
OnDeck: *Instant Funding requires registration and is subject to the Instant Funding Terms & Conditions. Instant Funding is limited to open lines of credit for draws between $1,000 - $10,000, and you can only make one draw request per day. Not all banks or debit card providers participate, and you must register a business debit card matching the information associated with your OnDeck account. Transfers are typically completed within 30 minutes, but may be subject to additional restrictions or delays.
†Same-Day Funding is only available in certain states, for term loans up to $100K. Eligibility window is Monday – Friday before 10:30 a.m. ET. If checkout is done before 10:30 a.m. ET, funds will be available by 5 p.m. local time the same day. If checkout is done after 10:30 a.m. ET, or on a weekend or bank holiday, it will not qualify for Same-Day Funding and funds will be deposited within 2 – 3 business days.
Depending on the state where your business is located and other attributes of your business and the loan, your business loan may be issued by a member of the OnDeck family of companies or by Celtic Bank. Your loan agreement will identify the lender prior to your signing. Loans subject to lender approval.
OnDeck® is a Registered Trademark. All rights reserved.
Biz2Credit: *Estimates based on all term loan transactions January 2023 - December 2023. Read the company's Terms & Conditions here.
Credibly: *Some products are made available through Credibly’s network of external funding partners.
Credible: ¹Personal Loans Rate and Terms Disclosure: Rates for personal loans provided by lenders on the Credible platform range between 6.99% - 35.99% APR with terms from 12 to 120 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 12%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 10.43%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32, assuming your lender deducts the origination fee from the offered loan amount. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 3, 2022, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.
Prequalified rates are based on the information you provide and a soft credit inquiry. Receiving prequalified rates does not guarantee that the Lender will extend you an offer of credit. You are not yet approved for a loan or a specific rate. All credit decisions, including loan approval, if any, are determined by Lenders, in their sole discretion. Lowest rate advertised is not available for all loan sizes, types, or purposes, and assumes a very well qualified borrower with an excellent credit profile.
*Credible Personal Loan Best Rate Guarantee: Terms Apply
Businessloans.com: Read the company's Advertising Disclosure.
Lendzi: See Lendzi's Terms of Application and Licenses and Disclosures.