Most small companies leave business within 6 months due to lack of funding. Over 66% of entrepreneurs encounter financial challenges, and 43% face problems paying the operating costs. However, you can overcome these business constraints with USAA business loans.
USAA, short for United Services Automobile Association, offers effective financial solutions. The company provides insurance, banking, and investment services at the best rate. Many small enterprises take loans from the United Services Automobile Association to finance their business.
However, not everyone can apply for a small business loan in USAA. This company only grants loans to the family members of a U.S. military person. Did you recently join the U.S. military, and your brother wants to start a small business? You are eligible to take business loans from this U.S.-based company.
The United Services Automobile Association will check your credit score before giving you the loan. You won’t qualify for the USAA loans if you have a poor credit score. Reputed finance companies like USAA always consider the lender’s financial condition before providing business loans.
Who is the United Services Automobile Association?
You must know about this insurance company before taking small business loans. The United Services Automobile Association was established 11 years ago, on 1922 June 20, in San Antonio, with the assistance of 25 Army officers.
Wiliam Garrison was elected as the first president of this company. The first employee of this company was Harold Duntom, who later became a general manager. The prime goal of USAA is to offer financial security to U.S. military members.
USAA is one of the best companies that provide financial services like life insurance to veterans who have served the country. Moreover, the company has deployed experienced financial advisors. They will help you to choose the small business loan that fits your needs.
Eligibility Criteria to Get USAA Small Business Loan:
The United Services Automobile Association doesn’t provide business loans or financial services to every entrepreneur. They check certain factors before accepting small business loan requests. The applicant must be a member of USAA to apply for a business loan.
Not a member of USAA? Join the company easily if you are in the U.S. military. People in the U.S. Air Force, National Guard, Navy and Coast Guard can also apply for the business loan. You’re also eligible for business loans if you work for U.S. Marines and Reserves.
Besides, the United Services Automobile Association also offers loans to former military members. USAA members’ children and spouses can apply for a business loan. Here is the list of people who can apply for the United Service Automobile Association loans:
- Widows or former spouses of USAA members
- Cadets of U.S. Service Academies
- Midshipmen of the U.S. Naval Academy
- Officer candidates who have been commissioned within 2 years
How to Apply for the United Services Automobile Association Loans?
Once you check all the eligibility criteria to get USAA loans, access the USAA site. You can open their company website from any mobile device, such as a computer or phone. However, ensure to connect the device with a stable internet connection.
An unwanted network interference can hinder your loan application process. Hence, check the stability of the wireless or cellular network before opening the USAA site. Follow these step-by-step instructions to apply for the loan once you open the site:
Log In to Your USAA Account
Go to the “Log On” section and tap on it to log in to your account with the right online ID if you are a USAA member. Are you a new member? Select “Join USAA” after clicking the “Log On” option.
Choose “Get Started” and answer the questions that appear on your device’s screen. Write your name, date of birth, social security number, email address, country code and phone number on the next page. Remember these details, as you will need them later to log in to the USAA account.
Go to the Loan Section
Reload the USAA page after creating your account and enter the ID. Locate the three horizontal lines, click it and select “Banking” from the pop-up menu. You will notice different financing options on the Banking list. Select “Loans” and navigate to “Personal Loans”.
Apply for the Business Loan
You will get small business loans up to $100,000 from United Services Automobile Association. Click the Apply Now button and you will get the “Log On” window if you haven’t failed to log in to your USAA account.
Enter the required details and complete the loan application process. Remember that your credit score must be 690 or above to get personal loans from USAA. The more your credit score, the less interest you have to pay each month.
Suppose you have applied for a $10,000 loan for your small business. Then, you have to give 15.5% interest every month to USAA. However, you might have to pay %30-$40 of interest if you have a poor credit score.
Does the United Services Automobile Association Offer Any Business Loans?
USAA doesn’t provide any small business loans for the members of the U.S. military or their members. The company launched a small business loan pilot program back in October 2018. USAA collaborated with StreetShares – a leading small business funding marketplace for this program.
USAA members used to get business loans at a low interest rate. Unfortunately, the United Services Automobile Association doesn’t offer this loan anymore. They discontinued the small business pilot program for some reasons. However, you can still apply for personal loans for your small business needs.
Best Alternatives to USAA Small Business Loans:
There are several alternatives to USAA small business loans which you can apply for. Merchant Cash Advances is the best alternative to USAA’s business loans. What are Merchant Cash Advances? It doesn’t work like a loan; it provides cash to small business owners in advance.
A lender buys your latest products or avails your service and pays for it in Merchant Cash Advance. The only downside of this USAA small business loan alternative is it is its high APR. Besides, running a business for at least 1 year is required to qualify for Merchant Cash Advances.
Here are the USAA small business loan alternatives that are currently available:
Do you need a $2,500-$250,000 loan for your small business? Apply for short-term loans. It has a lower interest rate than Merchant Cash Advances. Debtors only need to pay a 10% APR for short-term loans. You get 3-18 months to repay the amount you borrow from the creditors.
Invoice Financing is another great alternative to USAA loans. The best part about this loan is that it offers small company owners 90% of their outstanding invoices in advance. However, you must run the business for 6 months, and your annual revenue should be $50,000 to qualify for this loan.
Other USAA Small Business Loans Alternatives in 2023:
You can apply for Business Lines of Credits; it works like a business credit card. It offers credit limits of $10,000-$1 million to small business owners. Based on your credit score, you might have to bear a 7%-25% interest rate.
Additionally, you can go for Term loans to cover all the necessary business expenses. The creditor will decide the repayment time for this type of loan. You might have to pay a large amount of interest rate on Term loans. So, check the interest rate and repayment schedule before applying for any USAA small business loan alternatives.