Navy Federal Small Business Loan Review

What is Navy Federal Credit Union?

Navy Federal Credit Union is the world’s largest credit union committed to serving the financial needs of its members of the Department of Defense. Organized in 1933, Navy Federal Credit Union started with seven members and now has 7.5 million members and $90 billion in assets.

Navy Federal has 312 branches and more than 30,000 free ATM networks. Membership is limited to service members and veterans of all branches of the service, and Department of Defense civilians. Immediate family members of those who are eligible also can join.

Benefits of Navy Federal business loans

Nonprofit. As a credit union, Navy Federal is a nonprofit company. That means any profits are returned to the credit union members in the form of dividends, reduced loan interest and service improvements.

No prepayment penalties. Navy Federal does not charge prepayment penalties on any of its loans, which can save you a lot of money in interest and penalties.

SBA loans for startups. Startup businesses have the hardest time securing a small business loan or line of credit from a traditional lender. Navy Federal will consider loans for new businesses and startups for some of its SBA loans.

Membership required. It’s important to note that you must be a member of both Navy Federal Credit Union and a Business Member, which is a required by all primary business owners. Business Membership benefits include insurance solutions, merchant card processing solutions and access to other small business professionals.

What Navy Federal Credit Union offers?

Navy Federal Credit Union offers term loans, business lines of credit, investment property loans, commercial property loans and commercial vehicle loans to its members.

To apply for a term loan for the purchase of an item or for a vehicle loan, you’ll need to include either a purchase order, a bill of sale or an invoice. Term loans can be secured (collateral provided) or unsecured (no collateral).

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Eligibility requirements

Applicants and all primary business owners must have an existing Business Membership in good standing to be considered for eligibility. Membership is available to active duty members of the Army, Marine Corps, Navy, Air Force and Coast Guard; Army and Air National Guard; Delayed Entry Program; Department of Defense (DoD) officer candidate/ROTC; DoD reservists; veterans, retirees and annuitants; DoD civilian employees; DoD civilian retirees and annuitants; immediate family members (grandparents, spouses, siblings, children, adopted children, step-children, grandchildren and household members) of current members and those who would be eligible for membership.

Businesses that are not eligible for Navy Federal loans:

Anyone who does not have a connection to the U.S. military is ineligible to apply for a loan with Navy Federal.

How to apply for Navy Federal financing

Applications for loans up to $50,000 can be completed online, by phone or at a local branch. However, you will need to call Navy Federal’s Business Development Team at 877-418-1462, to apply for a business loan above $50,000.

To be eligible for a business loan, you must have an individual Navy Federal membership and all business owners must have a Business Membership. A $100 deposit is required when you open a Business Membership. If your business is a partnership, Corporation or Limited Liability Company, you must complete the Certification Regarding Beneficial Owner of Legal Entity Customers form.

Once you have met the above requirements, simply print, sign and save the Small Business Application Form (and Beneficial Owner Form if required) as a PDF or JPEG file. Applications may take two to three business days to process once all forms and supporting documents have been submitted through the Business Loan Application Submission Link.

Documents required for application:

  • Social security number
  • Drivers license or government ID
  • Credit card or bank account and routing number to fund your account
  • Federal tax ID number (TIN)
  • Business license (sole proprietorship)
  • Partnership agreement (if applicable)
  • Fictitious name certificate (if applicable)
  • Beneficial Owner Form (partnership, corporation, single member LLC, multi-member LLC)
  • Articles of incorporation (corporation)
  • Corporate bylaws (corporation)
  • Certificate of Good Standing (corporation, single member LLC, multi-member LLC)
  • Articles of organization (single member LLC, multi-member LLC)
  • Operating agreement (single member LLC, multi-member LLC)

Who is the best fit?

Getting a business loan or line of credit with Navy Federal is definitely worth considering if you are a service member and veteran; Department of Defense civilian; or immediate family member of eligible members.

Depending on your location, Navy Federal likely won’t have a physical bank branch nearby, but they have a large network of free ATMs.

The bottom line: How Navy Federal stacks up

As a nonprofit that’s committed to serving its members, Navy Federal returns all profits back to its members, which could turn into savings in the form of reduced fees, increased dividends and lower loan rates.

Navy Federal also has less drawbacks then smaller credit unions and banks, such as reduced services and technology. However, you may want to consider alternative options if you don’t live near one of their 312 Navy Federal branches.

As always, do your research before committing to a loan agreement by checking rates and terms.

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