USAA Business Loans: Everything You Need to Know

If you’re looking for a USAA business loan, read our guide for next steps.
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How to Fund Your Business with a USAA Small Business Loan

The USAA business loan program ran for a short stint in 2018. The USAA offered business loans through their partner, Streetshares. USAA members would receive discounts for two of Streetshares lending products. However, USAA business loans are no longer available, so we’ve compiled all of the info on the former program, plus alternatives to look into that offer similar funding products.

Here is your guide to finding a solid alternative to the former USAA business loan program.

See Your Loan Options

What is the USAA?

While some business owners want to know whether or not USAA small business loans exist specifically because they’re so familiar with the USAA, others might not be so sure of what it is.

So, first, we need to establish exactly what the USAA is. The USAA—which is short for the United States Automobile Association—began nearly a century ago. In 1922, 25 army officers decided to insure each other’s automobiles, and the rest is history.

Nowadays, the USAA has way more than 25 members. In fact, it has since grown to become a Fortune 500 company.

But as it has grown, it continues to serve the U.S. military, its veterans, their spouses, and their children in their financial pursuits like insuring their assets, banking, investing, and retiring. Plus, they even offer some of their services—like investments, financial planning, and life insurance—to the public.

All in all, the USAA provides multiple financial solutions to the military, their spouses, and even the public at large.


Do USAA Business Loans Exist?

So, does the USAA offer small business loans? Not anymore.

The USAA offers a myriad of financial services to its members. In October 2018, they launched a small business loan pilot program by partnering with StreetShares, a veteran-owned, operated, and funded loan provider.  USAA members were able to access lower origination fees on two of StreetShares’ products.

That said, the USAA business loan pilot program is no longer up and running, so there aren’t any business funding options available through the USAA. You should also be aware that the USAA doesn’t really have any small business banking solutions. This can be frustrating for veteran small business owners who prefer to handle their finances with veteran-specific institutions.

Though USAA business loans are no longer an option, you still have a wide variety of funding sources to choose from. And we’ll help you sift trough the top alternatives to USAA business loans here.


USAA Small Business Loans: The Top Alternatives

Because the USAA small business loan pilot program is no longer available, the most productive thing to do is to think next steps. Luckily, there are plenty of veteran small business loans out there to help you grow your small business.

Let’s cover all of types of small business loans that are the most useful for small businesses hoping to fund their business’s growth.

Merchant Cash Advances

Your first and arguably the most accessible alternative to USAA small business loans is a merchant cash advance.

A merchant cash advance, though often referred to as synonymous to small business loans, aren’t technically loans, they’re advances. This means that, through a merchant cash advance, a lender will buy your business’s future credit card sales, rather than simply lending your business money.

Your merchant cash advance will be repaid in the form of a daily percentage of your business’s credit card revenues until your advance, plus interest, is repaid in full. Because your daily payment will fluctuate with how much business you do each day, your merchant cash advance won’t come with a predetermined repayment term. As such, a merchant cash advance’s cost is expressed as a factor rate, rather than in an APR, which relies on a set repayment term length. To determine a merchant cash advance’s cost, multiply your loan amount by its factor rate, and you’ll have the amount that you’ll ultimately have to repay to your lender.

They sound nice and straightforward—and for what it’s worth, with their automatic payments and their transaction-based payment amounts, merchant cash advances can be pretty simple to use.

However, merchant cash advances aren’t quite as easy to afford. Their daily payments can stifle your small business’s cash flow pretty easily, and with no determined term length, there’s no telling how condensed your payments will end up being.

Let’s take a look at the details on what merchant cash advances can offer small businesses.

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Terms

For all they have to offer, merchant cash advances don’t necessarily offer up the most ideal loan terms. Generally speaking, even the very best merchant cash advance can offer up the following terms:

  • Loan amounts ranging from $2,500 to $250,000
  • Factor rates ranging from 1.14-1.18
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Requirements

Though merchant cash advances can’t offer up the best terms on the market, they can offer up accessible funding that’s open to small business owners with less-than-stellar qualifications.

You’ll just need to fulfill these minimum requirements in order to be eligible for a merchant cash advance:

  • At least 1 year in business
  • A personal credit score of 500+
  • At least $50,000 in annual revenue

If you and your business check off all 3 of those boxes, then your next step to getting a merchant cash advance will be getting the following required documents ready for your application:

  • Driver’s License
  • Voided Business Check
  • Bank Statements
  • Credit Score
  • Business Tax Returns
  • Credit Card Processing Statements
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Funding Speed

All that said, merchant cash advances typically aren’t able to fund small businesses as quickly as other funding options. Because they require a fair amount of set-up, merchant cash advances will typically take about a week to fund your business.

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Providers

If you’re considering funding your business with a merchant cash advance, then you’ll need to find a merchant cash advance company to apply to, as well.

Though most any merchant cash advance will come with similar terms, you can find the very best merchant cash advances through RapidAdvance.

Short-Term Loans

Next up on your list of possible alternatives to USAA small business loans is short-term loans.

These loans function a lot like a condensed version of traditional term loans that you’d get from a bank—you’ll still get a lump sum that you’ll pay off, plus interest, through a loan repayment schedule that the lender determines. However, with short-term loans, you’ll be paying your loan off over a much short repayment term. In turn, you’ll have to make more frequent payments, and your rates will often be much, much higher. In fact, some short-term loan options will carry factor rates instead of APR’s so that their rates aren’t misleading.

However, because you’ll repay a short-term loan over a much shorter amount of time, you’ll end up owing a lot less total interest to your lender. So, though your payments will be more frequent and higher amounts, your loan will ultimately cost you less overall with a short-term loan.

Not to mention, short-term loans are generally easily to qualify for than their longer-term counterparts.

Let’s take a look at the details on short-term loans and what they mean for your business funding options.

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Terms

As far as short-term funding goes, short-term loans can offer some of the best terms for quick funding.. With a short-term loan, you’ll be able to access the following loan terms for your business:

  • Loan amounts from $2,500 to $250,000
  • Repayment terms as short as 3 months or as long as 18 months
  • Interest rates starting at 10%
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Requirements

Just like any other small business loan, short-term loans will come with minimum requirements that you and your business will need to fulfill in order to be eligible to fund with this product:

  • At least 1 year in business
  • A personal credit score of 550+
  • At least $50,000 in annual revenue

If you and your business have those qualifications, you’ll need to find the paperwork to prove it in your short-term loan application. Get these documents at the ready, and you’re well on your way to funding with a short-term loan:

  • Driver’s License
  • Voided Business Check
  • Proof of Ownership
  • Bank Statements
  • Credit Score
  • Personal Tax Returns
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Funding Speed

Here’s another feature that make short-term loans stand out—you’ll be able to fund with one of them as quickly as one business day. This funding speed, of course, relies on your ability to move quickly with your paperwork and correspondence, but if you’re able to do that, your business will have the proceeds from a short-term loan in its account in no time.

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Lenders

If all of these facets of short-term loans sound like just what your business needs, then your next move is to find the short-term loan provider that will be the best fit for your business.

Luckily, there are more than a few stellar lenders out there that provide short-term loans to small businesses. Here are the lenders that we suggest you start with in your search for a short-term loan for your business:

Invoice Financing

Invoice financing is yet another kind of small business loan that’s a great alternative to USAA small business loans.

This financing option offers small business owners who are awaiting outstanding invoices to receive an advance of up to 90% of their invoice’s worth. Because the invoice works as a form of collateral for this type of business loan, invoice financing offers pretty stellar terms to business owners that might not be so keen to seek funding otherwise.

How does it work, exactly? Well, let’s figure that out by looking into the details of what invoice financing can offer your business.

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Terms

If you decide to fund your business through invoice financing, the you’ll be able to access the following range of terms:

  • Loan amounts of about 50% to 90% of your total invoice amount
  • Factor rates of 3% plus a percent for each week your invoice is outstanding
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Requirements

If you want to apply for invoice financing, you’ll first need to make sure that you and your business can cover these general minimum requirements for eligibility:

  • At least 6 months in business
  • At least $50,000 in annual revenue

One of the most notable perks about invoice financing is that providers often won’t take your personal credit score into account. Because it’s your customer who’s fulfilling the invoice and not you, lenders will mostly look to your invoiced customer to determine whether or not providing you with invoice financing will be too risky.

If you fit the bill for invoice financing and your want to move forward in the application process, then you’ll need to get your hands on the following documents to apply for invoice financing:

  • Driver’s License
  • Voided Business Check
  • Bank Statements
  • Credit Score
  • Outstanding Invoices
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Funding Speed

Another great feature that invoice financing typically boasts?

It funds quickly.

If you’re able to provide the necessary documentation and move quickly, then you could finance your outstanding invoices in as little a single business day.

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Lenders

If you want to pursue this alternative to USAA small business loans, then we suggest you start your search with the following top invoice financing providers:

Business Lines of Credit

Your next potential alternative to a USAA business loan is a business line of credit.

Much like a business credit card, this funding product will provide your business with a line of credit that it can tap into whenever it needs to.

What makes the business line of credit really stand out is that you’ll only have to repay whatever you end up spending, so you’ll be able to keep this product in your business’s proverbial back pocket and only tap into it when a time-sensitive expense pops up.

That’s the general idea, but let’s take a look into the details of what this type of small business loan can offer your business.

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Terms

When compared to business credit cards, business lines of credit can offer your business some pretty stellar rates and credit amounts. If you decide to go with a business line of credit, you’ll be able to access the following ranges of terms:

  • Credit limits of $10,000 to over $1 million
  • Loan repayment terms from 6 months to 5 years
  • Rates as low as 7% or as high as 25%
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Requirements

Sound like an ideal alternative to USAA business loans?

We thought it might.

Before you dive into the application process for a line of credit, though, you should make sure that you and your business are eligible for one. You’ll need:

  • At least 6 months in business
  • At least $50,000 in annual revenue

If you’re eligible, then you need to compile a stack of the following documents in order to apply for a business line of credit:

  • Driver’s License
  • Voided Business Check
  • Bank Statements
  • Balance Sheet
  • Profit & Loss Statements
  • Credit Score
  • Business Tax Returns
  • Personal Tax Returns
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Funding Speed

If you’re able to move quickly through the application process for a business line of credit, then the lender will be able to get you your funding in as little as one business day.

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Lenders

Ready to get to applying for a line of credit for your business?

We suggest you start your search with these top lenders that offer business lines of credit:

Term Loans

Our second-to-last suggestion for alternatives to USAA small business loans is the traditional term loan.

You’re likely already pretty familiar with the idea of a term loan. In fact, it’s probably what you picture when you think of a business loan—a lump sum of cash that you pay off, plus interest, through a repayment schedule that the lender will decide in the underwriting process.

Unlike a short-term loan, a term loan will always carry a repayment term that’s over a year, and, as a result, it will have less frequent, more affordable monthly payments. That said, because the repayment term for a term loan will be on the longer side, your loan will accumulate more interest as you pay it off gradually. As a result, your total cost of capital will be higher the longer your term is.

Let’s take a look at the details on what makes a term loan such an ideal alternative to USAA small business loans, even despite its high total cost of capital.

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Terms

To be sure, term loans are one of the most affordable options on the market for small businesses looking for capital. With less frequent monthly payments—rather than weekly or daily payments—term loans can seriously free up a small business’s cash flow.

Term loans will typically come with the following ranges of terms:

  • Loan amounts ranging from $25,000 to $500,000
  • Loan terms from 1 to 5 years
  • Interest rates as low as 7% and as high as 30%
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Requirements

If a term loan sounds like exactly what your business’s finances are needing, then you’ll need to make sure you check off a few minimum requirements before you dive into the application process:

  • At least 1 year in business
  • A personal credit score of 600+
  • At least $90,000 in annual revenue

Do you and your business adhere to these requirements? The next step to secure a term loan for your business is gathering all of the following paperwork for the underwriting process:

  • Driver’s License
  • Voided Business Check
  • Bank Statements
  • Balance Sheet
  • Profit & Loss Statements
  • Credit Score
  • Business Tax Returns
  • Personal Tax Returns
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Funding Speed

Admittedly, term loans won’t be able to fund your business as quickly as short-term small business loans. That said, you can still get funded with a term loan in as little as two business days, so this small business funding option could strike the perfect balance between affordable and timely for your business.

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Lenders

Ready to make the next move towards funding your business with a term loan?

Here’s a list of the very best alternative term loan lenders that can get your business ideal terms quickly:

SBA Loans

Last but certainly not least, an SBA loan is the alternative to USAA business loans that will offer your business the most ideal terms. The Small Business Administration also has created a variety of programs specifically designed for veterans, including VA SBA loans.

An SBA loan is a small business term loan that is partially back by the government entity them Small Business Administration, of the SBA for short. Through their 7(a) loan program, the SBA can provide a guarantee of up to 85% of a small business loan that one of its approved lenders provides.

Because this partial guarantee from the SBA will mitigate a lot of the risk that a lender will take on by lending to your business, this SBA loan will come with some of the most ideal loan terms out there.

However, because you’ll be dealing with a third party, and a third party that’s a government entity no less, SBA loans will involve a lengthy application process, and they’ll be difficult to qualify for.

Let’s zoom into the details on all the SBA loans can offer small businesses.

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Terms

As for the terms that SBA loans offer, this is where this funding option really shines.

If you qualify for an SBA loan, then your business will gain access to the following terms:

  • Loan amounts of $5,000 to $5 million
  • Loan terms ranging from 5 years to 25 years, with 10 year terms being standard
  • Interest rates starting at 6.5%

Be sure to note that these terms are ideal because of their low interest rates and their infrequent, affordable payments. However, if you look at total cost of capital, you’ll realize that the longer repayment terms that SBA loans come with will make them cost you a lot more in interest overall.

If you’re looking for an alternative to USAA small business loans that will cost you the least interest possible, then opt for a shorter-term option than an SBA loan.

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Requirements

In order to be eligible for an SBA loan, you’ll need the following qualifications:

  • At least 2 years in business
  • A personal credit score of 620+
  • At least $100,000 in annual revenue

As you’ve probably noticed, qualifying for an SBA loan will be harder than qualifying for pretty much any other funding options. And the documentation that the application process will require is certainly no exception:

  • Driver’s License
  • Voided Business Check
  • Bank Statements
  • Balance Sheet
  • Profit & Loss Statements
  • Business Tax Returns
  • Personal Tax Returns
  • Business Plan
  • Business Debt Schedule
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Funding Speed

Even more, because the application process for an SBA loan will require a lot of due diligence not only on your lender’s part, but also on the SBA’s, you’ll have to be patient if you want to fund your business with an SBA loan.

In fact, at their very quickest, SBA loans will take 3 weeks to get funded.

If your business needs cash for a time-sensitive expense, then an SBA loan is probably not the right fit for your needs.

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Lenders

Though SBA lenders can be found throughout the whole country, we suggest you start with the two best SBA loan providers out there:


USAA Small Business Loans: The Bottom Line

There you have it!

Though you might be disappointed that USAA business loans are no longer available, we hope you now realize all of the many kinds of alternatives out there for you. And even if the lenders we provided don’t necessarily have a familiar name, they’re ready to become your business’s go-to source of funding.

All you have to do is apply!