Best Small Business Loans for Veterans in 2023

We reviewed and ranked the top small business loans for veteran-owned businesses. We set out to find the best one by thoroughly researching five of the most popular lenders: Accion, Union Bank, Kiva, Kabbage, and the Small Business Administration’s (SBA’s) Military Reservist Economic Injury Disaster Loan Program (MREIDL). Knowing about the top small business loans for veterans makes it possible to find the best financing options for your business.

Our Approach:

Choosing the best business loan for veteran-owned businesses comes down to three things:

1. Needs of your business
2. If you can afford the loan
3. Whether or not your business meets the loan requirements

In this business loan review, we’ll look at some of the top small business loans for veteran-owned businesses and share what makes them the right choice. We’ll explore the financing details of each loan, along with pros, cons, and more. By the time you finish reading this review, you’ll know which business loan is best for your business.

Our Top 5 Business Lenders for Veterans:

1. Accion offers the best overall business loans for veterans because they offer low rates and make it easy to qualify for financing.
2. Union Bank is the best business loan for veteran-owned businesses wanting easy loan approval because they offer a special purpose credit program under the Equal Credit Opportunity Act.
3. Kiva offers the best no-interest loan for veterans because they use a crowdfunding platform to help veterans and the underserved around the world get interest-free loans.
4. Kabbage is the best business loan for veteran-owned businesses needing multiple loans because Kabbage offers a range of different loan products for veterans.
5. The SBA Military Reservist Economic Injury Disaster Loan Program (MREIDL) is the best business loan for veteran-owned businesses needing temporary funding because they offer temporary financial relief when reservists are called to active duty.

Accion is a lender we think you should check out. They are a good fit for veteran-owned businesses that need less than $50,000 in capital and that need a great rate to afford the loan. Accion started over 50 years ago and has grown into a reputable nonprofit lender that lends money to many types of businesses, like veteran-owned businesses.

Here are some of the businesses Accion lends money to:

• Loans for women-owned businesses
• Loans for minority-owned businesses
• Loans for food and beverage businesses
• Loans for startup businesses
• Loans for small businesses
• Loans for veteran-owned businesses
• Business loans for people with disabilities
• Loans for green businesses

Here is a quick summary of Accion business loans:

• Term Loans
  • Lowest rate: 8.99%
  • Loan sizes up to: $50,000

Accion Business Loan Qualifications:

• 576+ FICO score
• You will need to have an alternative source of income for repaying the loan
• You will need to have all former personal debts paid off before you’ll qualify for a business loan with Accion
• Accion typically lends smaller amounts of money than traditional lenders, but how much they lend to you will depend solely on your individual circumstances

Pros

• Money can be used for any business expense.
• Free up your cash
• Transparent fees
• Easy approval in 5-10 days
• Don’t need collateral
• Just 576+ FICO to qualify for a term loan

Cons

• Need to be in business two years to qualify for $50,000
• No bankruptcy for 24 months
• No more than $3,000 in past due debts
• Must demonstrate you can repay the loan

Union Bank offers the best loans for veteran-owned businesses seeking easy approval. Union Bank offers financing through a special purpose credit program under the Equal Credit Opportunity Act. This program is designed to help veteran-owned businesses who find it challenging to get the financing they need to grow their business.

Here is a quick summary of Union Bank business loans:

• Traditional Term Loan and Line of Credit
  
  • Lowest rate: undisclosed
  • Loan sizes up to: $1 million

Union Bank Business Loan Qualifications:

• Must have a Union Bank business bank account
• Must visit a branch to determine if you qualify
• 51% of the business must be owned by a veteran

Pros

• Work one-on-one with the lender to get approved
• Free up your cash
• Financing that grows with your business
• Easier to qualify for if you’re a veteran
• Borrow large sums of money
• Secured and unsecured options
• 18-84 month repayment terms

Cons

• Rates are determined on a case-by-case basis
• Must deal directly with the lender before applying for financing
• Longer process than online lenders for amounts over $250,000

Microloans are small loans used for specific purposes to help businesses stimulate growth. Kiva is our favorite lender for veteran-owned businesses looking for a no-interest loan. With Kiva’s unique approach to funding, which uses a crowdfunding platform to fund loans from multiple sources of financing, veteran-owned businesses can get small amounts of funding to help their business prosper. The best part is there’s no interest attached to the loan; just pay the principal back. As a mission-driven nonprofit, they don’t charge any interest on their loans.

Microfinance loans like Kiva’s loans are useful when a business owner needs a small amount of capital to quickly generate business income to manage and grow the business.

Here is a quick summary of Kiva business loans:

• Microloan
  • Lowest rate: 0%
  • Loan sizes up to: $15,000

Kiva Business Loan Qualifications:

To qualify for a Kiva business loan, you are required to:

• Conduct business in the U.S.
• Be at least 18 years old
• Be using the loan for business purposes

Pros

• No interest
• Crowdsourcing mitigates risk for investors
• Money can be used for any business expense.
• Repayable over 36 months
• Stimulate growth
• Free up cash flow
• Zero-interest loan
• Funds can be used for anything

Cons

• You are responsible for helping the loan get funded
• Requires time
• Smaller loans
• Kiva doesn’t report to credit bureaus.
• If your loan is only partially funded, you get nothing

Kabbage helps veteran-owned businesses get the funding they need by offering multiple loans that serve a variety of purposes. Kabbage sells term loans to veteran-owned businesses with low credit scores needing financing for different reasons. Kabbage has been in business for over 11 years, lending out over $6.5 billion.

Kabbage offers term loans customized for different business financing needs. Kabbage works with veteran-owned businesses to ensure they are able to fund their businesses, regardless of the need.

Here is a quick summary of Kabbage business loans:

• Term Loan
  • Interest rates: 24%
    Average loan size: $250,000

Kabbage Business Loan Qualifications:

• Low credit score approval
• Money can be used for most business expenses.
• Free up your cash
• Transparent fees
• Easy approval
• Don’t need collateral.

Pros

• Low credit score approval
• Money can be used for any business expense.
• Free up your cash
• Transparent fees
• Easy, fast approval
• Don’t need collateral
• Average loan is $96,000
• Get better rates as lenders compete for your business.
• Great customer support

Cons

• Need to be in business 12 months
• Poor fee structure (no benefit to paying the loan off early)
• High interest rates compared to other lenders.
• Short term financing only - you must repay in 18 months or less.
• Poor customer service

The SBA offers help to many different types of small businesses. One program they operate is the SBA Military Reservist Economic Injury Disaster Loan Program (MREIDL). This program is designed to help veteran-owned businesses by providing financial relief to businesses that are temporarily affected when a reservist is called to active duty.

Here is a quick summary of SBA MREIDL Programs:

• SBA Loan
  
  • Interest rates: 4.00%
  • Loan sizes up to: $2 million

SBA MREIDL Program Qualifications:

• Own a small business
• Obtain good credit
• Collateral on loans over $50,000
• 30-year max terms
• Must have required insurances

Pros

• Stay in business
• Low interest rate
• Long repayment period
• Guaranteed by SBA

Cons

• Must carry insurance
• Only qualify out of need
• Must meet strict requirements

Veteran-owned businesses often discover financing to be a hardship given most lenders require a high credit rating and established business credit. These lenders we’ve presented are the best business loans for veteran-owned businesses because they have a proven track record of helping underserved markets like veteran-owned businesses.

The best on this list is Accion, given they don’t require collateral and can get you funded up to $50,000 with relatively low rates in just a few days. Their loans are also easy to qualify for because you only need a 575 credit score. Accion helps veteran-owned businesses get funded fast with far fewer hassles and more favorable terms than most other lenders.

Alternatives to Small Business Loans for Veterans

• Friends and Family Loans
• Business Credit Cards
• Small Business Grants
• Personal Savings
• Investors