How To Get a Navy Federal Business Loan
7 MIN READ
Published December 19, 2023 | Updated January 24, 2024
Businesses in need of financing solutions to expand their business, invest in real estate, or support their operations can choose from a wide range of Navy Federal business loans to support their goals.
While you need to be a part of their business member program to apply for a loan, the credit union has high customer rankings for its other offerings, like Navy Federal personal loans and banking products. Other than the credit union’s membership requirements, you’ll also need to provide specific documents to become a business member.
If you already have an account there, it may be worth exploring its business financing offerings to see if they’re right for you.
Navy Federal Credit Union (NFCU) specializes in serving military service members, Department of Defense personnel, veterans, and their family members through its banking services. It is the largest credit union in the country, serving 13.2 million members.
Other than its wide range of checking and savings accounts, Navy Federal also offers personal loans, small business loans, credit cards, auto loans, student loans, home equity loans, and more.
If you’re eligible for a membership, you may be able to benefit from attractive rates, low fees, and other perks.
Navy Federal offers three distinct lending options to business owners: commercial real estate loans, vehicle and term loans, and lines of credit. You’ll find a few different options within these three categories.
1. Commercial Real Estate Loans
You can get a commercial real estate loan from Navy Federal if you’re planning to buy or renovate your business location or purchase investment property. You can use the loan funds for property renovation, mixed-use property, residential investment property, and commercial real estate.
While Navy Federal doesn’t specify loan limits or interest rates, you can choose from variable and fixed-rate options. There are no prepayment penalties, but you may have to pay origination fees and fees for attorneys, appraisals, document preparation, title, and environmental fees.
Commercial real estate loans offer a standard 5-year term with 20-year amortization.
2. Business Lines of Credit
Navy Federal offers two options when it comes to its business lines of credit. Financial expert Teresa Dodson, founder of Greenbacks Consulting, agrees that this solution is an effective choice for service members. “This is a great option to pursue if you’re in the military,” Dodson shares. “Some of the benefits are better than traditional banks,” she adds.
You can use the secured business line of credit to draw against as you need. You’ll need to provide collateral since it’s a secured offering. The funds can be used for operational purposes, such as payroll, operating expenses, and working capital. Credit limits start at $35,000, and the interest rate is a variable rate tied to Prime.
Another option is the checking line of credit, which protects your business checking account from overdraft fees. It can also be used to offset short-term cash needs. There’s a $50 annual fee, and you can expect to pay an APR of 17.90%. There are assigned limits of $500, $1,000, or $5,000 with the checking line of credit.
3. Vehicle and Term Loans
Navy Federal also offers standard business term loans, which can be used for building improvements, expansions, equipment financing, and more.
The maximum loan amount for term loans is $10,000, and you can receive up to 75% of the loan to value. There’s no prepayment penalty, but you’ll have to pay a $150 origination fee. Other fees may apply, depending on your location.
Navy Federal also offers business vehicle loans, commercial vehicle loans, and refinance options of up to $40,000. Both of these loans come with no prepayment penalties and no fees.
You’ll need to be a business member at Navy Federal to apply for a business. All owners of the business must be individual members with accounts in good standing to apply for the loan.
Qualification criteria vary based on the type of loan you’re applying for. We’ve listed some of these requirements below:
- You must be in business for at least a year for most types of loans.
- For lines of credit and term loans, your business must have a minimum annual revenue of $100,000.
- You must provide a personal guarantee.
- You must agree to a personal credit check.
There’s no information on the minimum credit score required to be eligible for a Navy Federal business loan. However, we noticed that the website states a personal credit check will be required to determine your creditworthiness. The interest rates you qualify for will depend on your credit score.
When applying for a Navy Federal business loan, you’ll need to provide a number of documents depending on the loan product. Generally, these documents include:
- Business financial statements
- Certificate of insurance for equipment and vehicle purchases
- Personal and business tax returns
- Personal guarantee
- Business plan
- Purchase invoice/buyer order
- Payoff statement and mileage statement if refinancing
- Proof of collateral when applicable
- Completed business loan application
Before applying for any type of loan, it’s important to have a clear understanding of the interest rates, fees, and repayment terms. This will allow you to make an informed decision about whether to borrow the loan.
Navy Federal doesn’t provide clear APR ranges for most of its business loan options unless you apply for it first. It also doesn’t offer an online pre approval option.
The APR is 17.90% for checking lines for credit. You’ll need to apply for the loan for all other products to learn more about the interest rates.
Like interest rates, Navy Federal also doesn’t provide details about repayment terms on its website. The only exception is commercial real estate loans, which offer a standard 5-year term with 20-year amortization.
How To Apply for a Navy Federal Business Loan
The application process for Navy Federal business loans can be completed in person at a branch or online, depending on the type of loan.
For example, online applications are available for term or commercial vehicle loans and checking lines of credit. For other types of loans, you can visit a local branch or call 1-877-418-1462 to speak to a business lending representative.
Here are the general steps you’ll need to follow to apply for a loan at Navy Federal:
- Carefully read the list of documents required to apply for the loan and have them handy before you apply.
- Check Navy Federal’s website to see if you can apply for the loan online or in person.
- If applying online, fill out the application form.
- Print out the form and sign it. Digital signatures aren’t accepted.
- Scan the signed documents and submit them online along with the documents required.
- You can expect to receive an update on your application in 7-10 business days.
Navy Federal Credit Union consistently receives good ratings for its loan services from customers on websites like Trustpilot. It offers a good mix of business solutions for its customers, although you need to be a member to apply.
If you’re already a business member, Navy Federal’s lines of credit, term loans, and commercial real estate loans can be a good option to support your operations, investments, and expansion needs.