Navy Federal Business Loans

The Complete Guide to Navy Federal Business Loans

Find out about the variety, requirements, advantages, and alternatives to Navy Federal business loans.

As a nonprofit organization serving the armed forces, veterans, and their families since 1933, Navy Federal Credit Union is a devoted member of the community. Even today, its mission of serving the military and their families as the “most preferred and trusted financial institution” is still relevant.

Each Navy Federal business loan is described in detail in this guide. So let’s begin.

Types of Navy Federal business loans

What can a Navy Federal business loan be used for exactly?

You’ll need to know what Navy Federal business loan type you’re looking for in order to answer this question.

Small business loans at Navy Federal are available in five types, each with its own uses and restrictions.

We’ll explain how to use Navy Federal business loans for your business by reviewing the five types.

A term loan

You can finance one-time assets—commercial equipment, inventory, technology, etc.—or increase the working capital of your business with Navy Federal’s term loans.

There are two types of loans available: purchase loans and refinancing loans. If you repay your loan early, no prepayment penalty applies.

Commercial vehicle loans

Those seeking business auto loans can take advantage of Navy Federal’s competitive rates. Term loans from Navy Federal can provide the majority of the vehicle’s value if you need to buy a vehicle for your business. When you purchase a new business vehicle, you can get a loan up to 100%. If you purchase a used vehicle, you can get a loan up to 90%. A car, a light-duty truck, or a sport utility vehicle typically fall into this category. Trucks, vans, and heavy-duty trucks are among the commercial vehicles that qualify for 80% new loans and 75% used loans.

The prepayment penalty is waived, so you will not be penalized for paying ahead of time.

Business lines of credit

Business lines of credit are a vital part of any small business’ back pocket—they operate like a stronger and more versatile business credit card, allowing you to access fast capital when you need it, but they offer lower interest rates than credit cards. The lines of credit you open are revolving, which means that after you pay back the money you’ve spent, your line of credit resets to its original value.

In addition to providing short-term business lines of credit, Navy Federal also provides business loans for businesses to cover unexpected expenses, take advantage of growth opportunities, and manage cash flow gaps. Additional fees, such as annual or origination fees, may apply in addition to their rates based on your creditworthiness and the Market Prime Rate.

Commercial real estate loans

Business owners can borrow from Navy Federal to purchase a variety of commercial properties.

Navy Federal offers a variety of repayment terms for these loans so you can choose a repayment schedule that meets your business needs.

Furthermore, Navy Federal does not charge prepayment penalties on commercial real estate loans, so you will avoid paying extra interest by paying early.

Investment property loans

Navy Federal Bank also offers loan programs for small businesses that involve investment properties. This loan type is ideal if you’re planning to invest in real estate for the purpose of making a profit-think starting a rental business or flipping a house.

There is no prepayment penalty on these loans, and their APRs are competitive. The property will be titled in your name under Navy Federal’s standard mortgage practices.

The Navy Federal investment property loan can also be repaid on a schedule that works best for your business with a variety of payment terms.

Eligibility requirements

Navy Federal business loans are only available to Navy Federal members, so they are not available to everyone. Before submitting your membership application, make sure you qualify for membership if you are not already a member.

If you fall into one of these categories, you can become a Navy Federal member:

    1. Served or retired from the military (Army, Navy, Marine Corps, Air Force, Coast Guard, National Guard, Department of Defense).
    2. Served as a military reservist.
    3. The spouse of a Navy Federal member.
    4. Children of Navy and Federal members.
    5. A Navy Federal member’s parent.
    6. Sibling of a Navy Federal employee.
    7. A member of the family of a Navy Federal employee.
    8. The granddaughter of a member of the Navy Federal Reserve.
    9. Those who live with a Navy Federal member but are not Navy Federal members.

A member’s account can be funded by providing their social security number, their driver’s license or government ID, and the number of their credit card or bank account.

The 5 Cs of credit

Once your membership status is established, you’re almost ready to start applying for one of their business funding options.

The first step to qualifying for a Navy Federal business loan is finding out if your business meets the five Cs.

In other financial institutions, these criteria may not have the same name. However, they determine whether you are eligible for funding, how much funding you will receive, and the terms that will apply.

According to Navy Federal, there are five C’s to credit.

  1. Availability. Capacity is one of Navy Federal’s five Cs of credit, indicating how well your business can repay the money it borrows.
  2. Capital. Obtaining Navy Federal funding is not permitted by law, so it is necessary for your business to demonstrate sources of other capital. No matter what type of funding you need, Navy Federal will evaluate your access to capital to determine whether they can grant you the loan you request.
  3. Collateral. By providing collateral, you will be able to prove that your business is willing to repay your loan. By lending to your business, Navy Federal mitigates any risk by providing collateral as a guarantee. Consequently, you’re more likely to be able to secure funding at a lower annual percentage rate. The collateral you put up for a loan will, however, be at risk if you default on the loan.
  4. Conditions. As a result of “conditions,” Navy Federal means current market conditions. You will need to demonstrate to Navy Federal that the market is positive for your business before applying for a loan. Which product or service does S currently offer? Is there a big competitor who might prevent you from repaying your loan? Demand for the product or service your business provides? Can you predict an increase in demand for your business?
  5. Character. In addition to your leadership style, your education, and general impression, the fifth C of credit looks at your character. Most importantly, they’ll examine how you manage your own finances by checking your credit score. In addition to the business loan application, you will be required to submit a personal financial statement.

Advantages and disadvantages of Navy Federal business loans

  • Advantages

In comparison to other options for funding your small business, why should you choose Navy Federal?

Navy Federal business loans have a number of unique advantages, including no prepayment penalties that you don’t see elsewhere when it comes to business loans. There is a possibility that you and your business will save a lot of money by taking advantage of this benefit.

When you pay off your loan before its term ends, some lenders often charge you interest based on how much interest you have accrued. You would have lost out on interest payments if you weren’t able to pay early by doing this. If you anticipate an upward trajectory that will allow you to pay off your business loan sooner than expected, Navy Federal won’t penalize you for paying it off early.

Besides being more accepting of short business histories, Navy Federal business loans also have a number of other advantages. For members of this select business community, who may have only a short business history, this may be a key factor.

If you qualify and are looking for flexibility, Navy Federal business loans may appeal to you. This is because there are no prepayment penalties, higher accessibility levels, and the option to take out a loan in a variety of categories.

  • Disadvantages

Is there a catch to all of this? All of this sounds great, so what’s the catch?

Unfortunately, lenders aren’t perfect. Our normal explanation for this is that lenders who are for-profit have to make a profit from lending to you. There is one exception to this rule, however, and that is Navy Federal. Due to their nonprofit status, nonprofit lenders do not need to make as much profit as for-profit lenders. There are, however, some difficulties associated with this.

Navy Federal business loans might be more accessible than standard business loans for qualified applicants, but they are generally inaccessible. These small, nonprofit lenders are notorious for the symptoms that come along with getting a business loan from witht just because they’re exclusive to members of Navy Federal.

Choosing a small, nonprofit lender can have its perks as well as its pitfalls. Due to scarce resources, nonprofits may, in theory, prioritize consumers over profit, but they often end up dissatisfying some of their customers. As a result, Navy Federal receives a lot of negative reviews from customers. It is common for business owners to feel stressed and frustrated because resources are limited, resulting in poor customer service.

If you’re considering Navy Federal business loans, make sure to consider both of these factors.

Alternatives to Navy Federal business loans

Navy Federal business loans aren’t your only option for business financing. There are many other excellent options as well. Navy Federal business loans, for example, don’t charge prepayment penalties.

You should first explore traditional banks that might be able to provide you with financing before you start looking at alternative lenders. There are two top choices when it comes to business loans: Wells Fargo and SunTrust.


For veterans looking for a lender, StreetShares offers veteran business loans.

The StreetShares business funding search engine is where you should begin your search for business funding. In addition to helping veteran-owned small businesses obtain funding, this lending company was founded by a veteran.

StreetShare offers a number of loan products including term loans and contract financing.

Additionally, StreetShares business loans offer many perks similar to Navy Federal loans. Prepayment penalties are not applicable to any of them.

One notable downside to StreetShares’ loans is that you cannot choose the payment schedule, unlike Navy Federal business loans. You won’t have the same payment flexibility available with Navy Federal because StreetShares deducts your loan payments automatically from your bank account each week.

OnDeck Capital

There are great alternatives to Navy Federal’s term loans offered by OnDeck Capital.

A small business owner can get funding from OnDeck through both short-term loans and long-term loans with APRs ranging from 29.9% to 97.3% (based on loans originated in the half-year ending March 31, 2022).

In addition, OnDeck’s term loans are excellent options for funding your business’s real estate purchases, expansions, and renovations. However, they’re not specifically designed for property investments or commercial real estate.

Plus, OnDeck works with business owners who have had their businesses for at least one year and have a FICO score of 625. The term loans offered by OnDeck are less expensive than those offered by Navy Federal.


The Kabbage business credit line is the company’s sole focus.

Business lines of credit have been perfected by them, so their product is a great alternative to Navy Federal’s. Having an outstanding balance every month means Kabbage will charge you a monthly fee and it is as follows: 0.25% to 3.50%, 0.25% to 2.75%, and 0.25% to 2.50% for six-, 12-, and 18-month terms.

Your credit score needs to be at least 640. Your business must have been operating for at least one year, and your monthly revenue needs to be at least $3,000.

Funding Circle

Last but not least, Funding Circle, which offers outstanding equipment financing, is another option for Navy Federal’s commercial vehicle financing.

There is no minimum revenue requirement for them, which is kind of rare for a lender, and they offer loans at rates as low as 4.99% APR. For businesses with low revenue, this may be an option.

With Funding Circle’s equipment financing, you can finance a variety of equipment you might need to run your business, including computer systems and printers. It’s basically a broader version of Navy Federal’s commercial vehicle loan.


If you are looking for a business loan for your company, Navy Federal can be an excellent option. In this case, you will have to find another option if you are not a qualifying member.

Navy Federal offers small business loans with perks that can be found elsewhere, so there are a lot of options to choose from. Often, there are no downsides to Navy Federal business loans, so you can enjoy those benefits.

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