Navy Federal Business Loan Review
17.90% for checking line of credit; other rates are not disclosed
From $10,000 for business lines of credit; maximum amounts not specified
$100,000 for secured term loans and lines of credit; other minimums not disclosed
Pros and cons of Navy Federal Credit Union
| Pros | Cons |
|---|---|
| Offers some SBA-backed loans Full-service business banking Most loans can be used for refinancing | Doesn’t offer preapproval Lines of credit carry high fees Must be a business member to apply Not transparent with financing details Collateral required for most financing options, and insurance may be required for collateral |
Navy Federal Credit Union small business loans review
Navy Federal Credit Union specializes in helping military service members, veterans, Department of Defense personnel and their family members access quality banking services.
The institution has mixed customer reviews — its personal loans received extremely high marks in customer satisfaction on J.D. Power’s 2024 U.S. Consumer Lending Satisfaction Study, but some customers complain about loans being difficult to qualify for. And there’s not as much information available from former customers when it comes to business loans.
Navy Federal is remarkably tight-lipped about its small business loans, so if you’re not already a member, there are a lot of hoops to jump through just to get a quote. But it might be worth considering if you already belong to the credit union.
You’ll need to be a credit union member on the personal banking side before you can apply for business membership — and you’ll need to be a business member to qualify for a small business loan.
Who is Navy Federal best for?
- You’re already a Navy Federal business member. Navy Federal doesn’t offer business loan preapprovals, and you can’t apply unless you’re already a member. FYI, applying for business membership is an involved process.
- You’re not looking for fast funding. It can take a week or more to get a credit decision.
- You value good customer service. Little information is publicly available for Navy Federal’s business banking services, but its personal loan services have received strong ratings from independent reviewers like J.D. Power.
Navy Federal Credit Union small business financing at a glance
| Product | Loan amounts | Repayment term | Estimated APR range | Fees |
|---|---|---|---|---|
| Commercial real estate loans | Not disclosed | 120 months with 20-year amortization | Not disclosed | Title, appraisal, attorney fees and more may be required |
| Secured business line of credit | Starting from $10,000 | Not disclosed | Not disclosed |
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| Checking line of credit | $500, $1,000 or $5,000 | Varies | 17.90% | Annual fee: $50 |
| Term loans | Starting from $10,000 ($40,000 for commercial vehicle purchases) | Not disclosed | Not disclosed |
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Term loans
You can apply for a standard business term loan that can be used for a wide range of purposes, including equipment financing, company expansion or building improvements. You’ll be required to back your term loan with collateral — if you’re purchasing a vehicle or equipment, it’ll likely be used as your collateral.
Navy Federal allows you to borrow up to 75% of the cost of financing a new equipment purchase — which means you’ll need to come up with a down payment of at least 25%, plus any shipping or installation costs.
Unfortunately, Navy Federal doesn’t provide any information to the public on loan costs or terms until you actually apply for a loan. Having said that, you might be able to get an SBA loan through Navy Federal, which have maximum rates set by the Small Business Administration (SBA).
Line of credit
Navy Federal offers two types of lines of credit: a business line of credit (BLOC) that you can draw against as needed or a checking line of credit (CLOC) that will cover overdrafts from your Navy Federal business checking account. You’ll need to offer some sort of collateral for BLOCs, while CLOCs are collateral-free.
On top of interest, you’ll pay an annual $325 fee for a BLOC or $50 for a CLOC, whether you use it or not. Navy Federal might also impose a “clean-up period” for some BLOCs, requiring you to maintain a $0 balance for at least 30 consecutive calendar days. That means you can’t draw on your credit line during that period. Make sure you have a backup plan in place so this doesn’t affect your cash flow.
Commercial real estate loans
If you’re looking to buy, refinance or renovate a business location or investment property, Navy Federal may be able to help with a commercial real estate loan. There are no prepayment penalties, though other real estate fees may apply.
Unfortunately, you won’t find out how much these fees might be, or what Navy Federal rates are, until you apply for a loan. But you might be able to choose between a fixed or variable rate.
Navy Federal Credit Union borrower requirements
| Minimum annual revenue | $100,000 for secured term loans and lines of credit. Information is not disclosed for other financing types. |
| Minimum time in business | Not specified, but Navy Federal will require your two most recent years of personal tax returns to apply for a secured business line of credit; three years for a commercial loan. |
| Minimum credit score | Not disclosed |
Navy Federal Credit Union has extremely strict business loan application requirements, and you’ll need to be a business member before you can apply for financing.
To start, you’ll need a personal membership. The bank is only open to active-duty military, veterans, immediate family of military service members and Department of Defense employees.
Next, to become a business member, you’ll need to fill out an application, spend up to an hour on the phone with a banker, and put down a deposit of $250 to $255, depending on your business type. If you have business partners or co-owners, they’ll also need to be eligible and apply for membership.
You’ll need to be a Navy Federal business member for at least one year (or be in business for at least 24 to 36 months) before applying for financing.
Required documents
If you haven’t yet applied for a Navy Federal business loan, you might be in the dark about what it can offer you. But one thing the credit union is very upfront about is the documentation you’ll need to apply. The required documents vary depending on the type of loan you’re applying for, but you may have to provide the following:
- Completed loan application
- Business plan
- Personal guarantee
- Business and personal tax returns from the previous two to three years
- Certificate of insurance (for secured term loans and vehicle purchases)
- Current business financial statements, such as profit and loss statements, aging reports, balance sheets and more
Alternatives to Navy Federal Credit Union
| Navy Federal Credit Union | U.S. Bank | Bank of America | |
|---|---|---|---|
| Minimum credit score | Not disclosed | Not disclosed | 700 |
| Loan products offered |
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| Time to funding | Up to five business days to receive a lending decision; time to funding not disclosed | Not disclosed | About two weeks for SBA loans; not disclosed for other products |
| Starting rate |
| Not disclosed |
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| Maximum loan size |
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| Minimum annual revenue |
| Not disclosed |
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Navy Federal Credit Union vs. U.S. Bank
U.S. Bank offers more financing options than Navy Federal Credit Union, but it isn’t very transparent about the details. That could be frustrating if you’re trying to decide whether it’s worth applying for financing.
However, U.S. Bank does offer preapproval for some of its financing options — so it’s easier to get that information compared to the runaround you’ll need to do for Navy Federal. U.S. Bank also offers military benefits, but only on the personal banking side.
Read LendingTree’s U.S. Bank business loans review
Navy Federal Credit Union vs. Bank of America
Compared to Navy Federal, Bank of America offers more small business financing options and provides more information about their products. And you don’t need an existing account before applying for financing.
Bank of America also offers small business financing fee discounts for military veterans. If you’re a Bank of America Preferred Rewards member, you might also reduce your interest rate by 0.25% to 0.75% on certain types of financing.