The Best Small Business Loans for Veterans - In-depth
Let’s now go into more detail about each provider.
1. SBA Veterans Advantage 7(a) Loan
The Veterans Advantage program (which eliminated or reduced fees on SBA 7(a) loans for veterans) was recently discontinued. Veterans, however, can still apply for SBA 7(a) loans for up to $5 million in business capital funding.
- Lower fees and interest rates
- SBA Express loan for up to $350,000 can be processed faster
- Longer repayment terms
- Low monthly repayments
- Longer approval turnaround times
- Higher upfront fees payable for more significant loan amounts
Should your required loan amount be less than $125,000, you’ll benefit by not paying an upfront guarantee fee, and your interest rate will be lower.
With government backing resulting in much less costly financing, SBA loans for veterans are considered a solid option.
2. StreetShares Foundation
StreetShares Foundation provides loans for veteran-owned enterprises that have been in operation for over one year.
- Borrower eligibility is lower than banks
- Rates charged are inexpensive
- No penalties for prepayment
- Application process is quick and straightforward
- Low borrowing amounts
- Loans are limited to 20% of annual business revenue
Initially founded by veterans for veterans, loan amounts of up to $250,000 are available—with competitive interest rates. StreetShares foundation is our number one choice small business loan for veterans.
3. Military Reservist Economic Injury Disaster Loan Program (MREIDL)
The Military Reservist Economic Injury Disaster Loan program (MREIDL) aims to assist eligible small businesses so that they can meet regular operating expenses.
These loans provide the working capital necessary for an enterprise to meet its obligations. The loan remains in place until operations return to normal—typically up to a year after the employee has returned to civilian duty.
- Repayment up to 30 years
- 4% maximum interest rate
- Loans up to $2 million
- Approval process can take long
- Eligibility requirements are stricter
To apply, you must have income tax returns for the past three years, current business financial statements, and personal assets and liabilities statements.
4. Hivers and Strivers Angel Fund
Hivers and Strivers is an angel fund founded by graduates from U.S. military academies to assist fellow military academy graduates with their startups. It also provides support during the early stages of a business's operating life.
Capital contributions range from $250,000 to $1 million, and they may form alliances with other groups for more significant investments. Should you be a graduate of one of the military academies and possess a small business idea, visit their website.
- No loan repayments
- No interest expenses
- They serve as advisors and board members
- No minimum trading period
- Investors expect a return of at least 10x initial investment
- You’ll always have somebody looking over your shoulder
Providing that you can qualify, this is an excellent way forward for aspiring entrepreneurs.
5. LendingClub Veteran Loan
LendingClub stopped offering small business loans in April 2019 but still connects potential borrowers to a major lending partner.
Customers who fill out a business loan form on LendingClub's website are referred to Opportunity Fund, a larger nonprofit business lender. Opportunity Fund usually provides loans to less-served small businesses that don't qualify for conventional bank loans.
To qualify for loans up to $500,000, borrowers must have been trading for at least 12 months. They must also prove a minimum of $50,000 in annual revenue and own 20% or more of the business. Additionally, you may not have any tax liens or bankruptcies.
The Top Small Business Grants for Veterans
Now, let’s take a close look at the top small business grants for veterans.
This organization aims to offer support for the families of military persons who served the U.S.A. Several grant opportunities are available through StreeShare as well as other options to help you realize your entrepreneurial goals.
The United States Department of Agriculture began the 2401 Program as an initiative to assist veterans and socially disadvantaged farmers. If you work in the ranching or farming industry and qualify for a USDA grant, you may be able to receive money and other benefits to get your business started or to maintain your established business.
The Warrior Rising organization was created by military veterans eager to assist their fellow veteran entrepreneurs. Participants can benefit greatly from training, grants, and mentorships.
The grants offered by this organization are for veterans who have nonprofit organizations. If you are a veteran eager to have a positive impact on your town or community it is worth looking at the qualifications to see if a VA small business grant will assist you.
The focus of these business development grants is to give small business owners, from a variety of backgrounds, the opportunity to achieve their entrepreneurial aims.