Best Small-Business Loans for Veterans in 2016

Finding a small-business loan can be tough for any entrepreneur. Bad credit, a lack of collateral and limited business history may all pose obstacles. Funding may be an even bigger challenge for U.S. military veterans, whose financial history may have gaps because of their time in active service.

Even so, many veterans decide to become their own boss after serving their country. About one in seven veterans is self-employed or a small-business owner, according to the Institute for Veterans and Military Families at Syracuse University.

To help overcome the financing hurdle, we’ve rounded up some of the best small-business loan options for veterans based on qualifications:

• If you have bad personal credit (at least 500)
• If you have good personal credit (at least 600)
• If you have unpaid customer invoices
• Summary: Small-business loans for veterans

Small-business loans for veterans with bad personal credit

Good option for: • Fast cash • Expansion, working capital, short-term expenses	Good option for: • Fast cash • Working capital
Do you qualify? • Minimum 500 credit score • $100,000+ annual revenue • 1+ year in business • No bankruptcies in past 2 years	Do you qualify? • No minimum credit score • 1+ year in business • $50,000+ annual revenue
Borrow: $5,000 to $500,000	Borrow: $2,000 to $100,000
APR: 9% to 98%	APR: 32% to 108%
Apply now at OnDeck	Apply now at Kabbage

OnDeck: OnDeck’s online application can be completed in just 10 minutes, with funding as fast as 24 hours (but typically in a few days to a week). The lender works with restaurants, auto repair shops, doctors, dentists, retailers, and skilled tradespeople such as carpenters and plumbers. Common uses of funds include inventory, equipment and growth, such as opening a new location or making renovations.

Kabbage: For startups and younger small businesses, lenders typically base lending decisions on the owner’s personal credit. This could be an issue for veterans who did not get a chance to build their credit during military service. Kabbage does not have a minimum credit score requirement, and time to funding is also very fast — borrowers are typically approved and funded within a few minutes or, at most, a few days. With a repayment term of just six or 12 months and APR of 32% to 108%, Kabbage is a better option for short-term needs, such as working capital or buying inventory.

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Small-business loans for veterans with good personal credit

Good option for: • Fast cash • Financing smaller loans • Newer businesses • Veterans	Good option for: • Strong credit • Expansion or refinancing debt • Established businesses	Good option for: • Fast cash • Expansion or working capital • Established businesses
Do you qualify? • 600+ credit score • $25,000+ annual revenue • 1+ year in business • No bankruptcies in past 3 years	Do you qualify? • 600+ credit score • $50,000+ annual revenue • 2+ years in business • No bankruptcies or foreclosures in past 3 years • Must be current on government-related loans	Do you qualify? • 600+ credit score • $75,000+ annual revenue • 2+ years in business • No recent bankruptcies or tax liens
Borrow: $2,000 to $100,000	Borrow: $30,000 to $350,000	Borrow: $5,000 to $300,000
APR: 8% to 40%	APR: 7% to 8%	APR: 8% to 32%
Apply now at StreetShares	Apply now at SmartBiz	Apply now at Lending Club

StreetShares: StreetShares is veterans-friendly. About 60% of its borrowers are former service members. With an approval time of three to five days and competitive rates of 8% to 40% APR (with an average APR of 18%), StreetShares is a good option if you need fast cash and don’t qualify for a bank loan. Borrowers should note the loan cannot exceed 20% of your annual revenue. Loans are repaid over a period of three, six, 12, 18 or 36 months and carry no prepayment penalties. The average loan amount is $23,000, and the most common uses include working capital, hiring employees, and buying inventory and equipment, according to Mark Rockefeller, founder and CEO.

SmartBiz: With low costs and a repayment time frame of 10 years, SmartBiz is a solid option for growth financing, such as purchasing real estate or equipment, refinancing high-interest debt or acquiring another business. Strong personal credit and annual revenue are needed to qualify. Borrowers cannot have prior defaults on government-backed loans, outstanding tax liens, a criminal record, or any bankruptcies or foreclosures in the last three years.

Lending Club: Lending Club is a good option for expansion capital; you can borrow up to $300,000 and repay the loan over one to five years. The company’s loans offer competitive rates, less stringent qualifications than banks and no prepayment penalty. You can pre-qualify and get a quote in just five to 10 minutes, with no effect on your credit score (it counts as a “hard” inquiry only if you’ve been approved and take on the loan).

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For veterans with unpaid customer invoices

Good option for: • Bad credit • Fast cash	Good option for: • Bad credit • Fast cash • Businesses with strong-credit customers • Financing large invoices	Good option for: • Good credit • Financing large invoices • Businesses that can wait longer for financing
Do you qualify? • No minimum credit score or time in business • Must use online accounting software that can link to Fundbox, such as QuickBooks, FreshBooks or Xero	Do you qualify? • 530+ credit score • At least three months in business • $120,000+ annual revenue	Do you qualify? • 600+ credit score • 1+ year in business • $12,500+ per month in revenue • Must be breaking even or profitable
Borrow: $500 to $100,000	Borrow: $20,000 to $500,000	Borrow: Up to $500,000
APR: 13% to 68%	APR: 17% to 60%	APR: 11% to 22% plus prime rate
Apply now at Fundbox	Apply now at BlueVine	Apply now at Dealstruck

Fundbox: Fundbox is a good option for businesses with bad credit, as the lender doesn’t require a minimum credit score to qualify. The advance is up to 100% of the value of the invoice (as much as $100,000) and is repaid in 12 equal weekly installments. A Fundbox account can be created in less than a minute, with money typically arriving in one to three business days.

BlueVine: BlueVine is best suited to business owners looking to finance a larger amount from invoices; you can borrow up to $500,000. It’s also a good option if you have customers with strong credit, such as large corporations. BlueVine advances you 85% of the invoice amount upfront, and the rest minus fees when your customer pays you. Qualifying is a bit harder than with Fundbox. You need a minimum personal credit score of 530 and annual revenue of at least $120,000, and you need to have been in business for three months or more.

Dealstruck: Dealstruck’s asset-based line of credit lets you borrow up to 85% of the amount of your outstanding invoices and repay it over six months. With the cost of funding at 11% to 22% APR plus the prime rate, Dealstruck offers the cheapest invoice financing option of these three lenders. Its average of 10 days to funding, however, makes it the slowest financing option among the three invoice financing lenders. It also has the most stringent qualifying requirements: You need a minimum personal credit score of 600, at least one year in business and $12,500 or more in monthly revenue.

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Summary: Small-business loans for veterans

Funding options	Good option for:	Do you qualify?	Loan amount & APR	Get started
	• Good credit • Expansion or refinancing debt	• 600+ credit score • $50,000+ annual revenue • 2+ years in business • No bankruptcies or foreclosures in past 3 years	• $30,000 to $350,000 • 7% to 8% APR	Apply now at SmartBiz
	• Good credit • Fast cash • Expansion or working capital	• 600+ credit score • $75,000+ annual revenue • 2+ years in business • No recent bankruptcies or tax liens	• $5,000 to $300,000 • 8% to 32% APR	Apply now at Lending Club
	• Good credit • Fast cash • Financing smaller loans • Newer businesses • Veterans	• 600+ credit score • $25,000+ annual revenue • 1+ year in business • No bankruptcies in past 3 years	• $2,000 to $100,000 • 8% to 40% APR	Apply now at StreetShares
	• Good credit • Financing large invoices • Businesses that can wait longer for financing	• 600+ credit score • 1+ year in business • $12,500+ per month in revenue • Must be breaking even or profitable	• Up to $500,000 • 11% to 22% APR plus prime rate	Apply now at Dealstruck
	• Bad credit • Fast cash • Expansion, working capital or short-term expenses	• Minimum 500 credit score • $100,000+ annual revenue • 1+ year in business • No bankruptcies in past 2 years	• $5,000 to $500,000 • 9% to 98% APR	Apply now at OnDeck
	• Bad credit • Fast cash • Short-term working capital	• No minimum credit score • 1+ year in business • $50,000+ annual revenue	• $2,000 to $100,000 • 32% to 108% APR	Apply now at Kabbage
	• Bad credit • Fast cash • Businesses with unpaid invoices	• 530+ credit score • At least three months in business • $120,000+ annual revenue	• $20,000 to $500,000 • 17% to 60% APR	Apply now at BlueVine
	• Bad credit • Fast cash • Businesses with unpaid invoices	• No minimum credit score or time in business • Must use online accounting software that can link to Fundbox, such as QuickBooks, FreshBooks or Xero	• $500 to $100,000 • 13% to 68% APR	Apply now at Fundbox

Resources and funding for veteran-owned businesses

You can compare other loans with NerdWallet’s small-business loans tool. It’s essential to weigh the terms and costs of each loan before making a decision. Veterans-turned-entrepreneurs can also check out these grants and other resources for veterans.

Compare business loans

 

This article was updated May 18, 2016. It was originally published Oct. 5, 2015.

Steve Nicastro is a staff writer at NerdWallet, a personal finance website. Email: Steven.N@nerdwallet.com. Twitter: @StevenNicastro.

To get more information about funding options and compare them for your small business, visit NerdWallet’s small-business loans page. For free, personalized answers to questions about financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.