Business loan

Quick business loans: how to get a business loan quickly

Nowhere is the saying “you need money to make money” truer than in the crowded, competitive and fast-paced world of small business. As you seek to establish and grow your business, access to capital (or lack thereof) will be one of your biggest hurdles.

For small-business owners facing expenses that simply can’t wait, traditional approaches — SBA loans from banks, for example — can be cumbersome, inconvenient, and ultimately disappointing. There is a correlation between access and cost of small business loans that every small business owner should be aware of. The interest rate (or cost of capital) will often be lower with a traditional lender like a bank or credit union, but their qualification criteria can be much stricter, and it can take weeks or months to complete. to qualify.

Alternative lenders not only tend to rate creditworthiness differently, but they are also able to respond to a loan request much faster than their more traditional counterparts. If you are looking for a quick business loan to meet an urgent business need or opportunity, an online lender is often able to respond to your loan request today and maybe even fund your loan tomorrow. .

That being said, if you have bad credit it will be more difficult to find a loan, but there are still options for a business borrower with a less than perfect credit history. You should also expect that small business financing costs are likely to be higher for the convenience of quick response and quick lending. Still, depending on your business needs, the increased cost might be worth the expense if it helps you meet a critical business need or increase the ROI of an ongoing business initiative. Let’s take a closer look some commercial lenders and see what they have to offer as a fast small business loans.

How can I get fast money for my business?

Traditional loans like those offered by the SBA and banks don’t tend to come in quickly, so if you’re looking for quick working capital, you might want to explore other options.

Alternative lenders can quickly approve and fund your business loan, sometimes the same day. If you need quick capital, look at the options we discuss below.

How do fast business loans work?

Alternative lenders generally look at criteria other than creditworthiness, such as annual income and assets. Because they don’t dig as deep into your company’s finances, they can make a decision on approval faster, sometimes instantly after clicking “apply”.

If you have opened your business bank account with the lender, funds will be deposited in as little as one business day, giving you the access you need to cash out.

Common reasons for needing a fast business loan

So why would you need a fast business loan? If you didn’t plan for a cash crunch, you might have trouble paying your bills. A quick loan can get you the money you need to cover these expenses.

You might also have the opportunity to take advantage of an opportunity to buy another business and don’t have the time to wait, or the cash. This is another example where a quick business loan could come in handy.

How to qualify for a fast business loan

Because alternative lenders don’t necessarily look at your credit scores, there may be other ways to qualify for a fast business loan. First, your business must have been in operation for at least a year or two. There may also be annual income requirements.

The best lenders for fast business loans

So what is the best loan for you? Here are a few Nav partners we think have great business loan options to consider.

Line of credit by Kabbage

Time to approval and funding: Funds deposited within 3 business days once approved

How much can you borrow: $1,000 – $150,000

How long can you borrow it: Monthly payments for 6, 12 or 18 months

After and fresh: 9% – 36% APR

On the bridge

OnDeck’s short-term business loan product allows business owners to quickly take advantage of opportunities or manage any obstacles they encounter.

Minimum requirements: qualified applicants have a personal credit score of 500 or higher, at least 1 year in business, with a minimum of $100,000 in annual business income.

Time to approval and funding: OnDeck’s loan application process takes about 10 minutes. By applying online or by phone, you can receive funding as quickly as one business day after your approval. Being prepared – providing complete information and having all necessary documents ready in advance – can help speed up the process.

Required documents : Business tax identification number, bank statements for the last three months, social security number of business owner(s), merchant processing and credit card records for the last three months (if applicable).

How much can you borrow: $5,000 to $250,000. You will generally be eligible for a loan representing 10% to 15% of your business’ annual gross revenue.

How long can you borrow it: The repayment term can be up to 24 months, with payments automatically debited from your bank account on a daily or weekly basis.

APR and fees: OnDeck loans range from around 20% to 40% APR, and the APR on their cash loans can go up to 100% APR.

Personal Guarantee and Guarantee: OnDeck requires a personal guarantee and places a lien on general business assets.

Merchant Cash Advance (MCA)

If you accept credit cards and have a fairly steady stream of credit card receipts circulating through your business, a MCA could be a viable option for your business. Although a merchant cash advance is not a loan, but rather an advance on your credit card sales, most vendors are able to respond to your request on the day of your request and may have funds in your account within a day or two after that. .

The cost of an MCA will likely exceed the costs of an unsecured loan from most online lenders, including the two we mentioned above.

Other financing options

Finally, let’s take a look at some more affordable options for quick business financing. While these approaches may not be as quick as going to lenders like OnDeck or Kabbage, depending on the business need you’re trying to address, the extra effort may be worth it in the long run, given the amount of money you can save. .

Credit card

Credit cards may not always seem like an obvious choice for people looking for quick business loans, but if used correctly they can be a quick and easy source of business capital. If you have reasonably good credit, you may want to consider getting a business credit card. The ideal way to use these cards is to pay off the full balance each month. By doing so, you’ll keep the credit limit available for those times when you need access to a quick loan, and you’ll boost your business credit rating at the same time. The average APR for a credit card is 16%, significantly lower than some of the options we’ve mentioned. And while it’s true that you’re limited to your line of credit on what you can and can’t buy, another advantage of credit cards is that many of them offer introductory interest rates of 0. % as well as rewards such as cashback with purchases, frequent flyer miles, hotel stays, etc.

Invoice financing

Do you have erratic cash flow because you often wait for your customers to pay you for the services or products you have provided? Invoice financing (invoice factoring) can be a good option for B2B companies with long billing cycles. Invoice financing allows you to get paid immediately rather than waiting for your customers to pay you.

Home loans

If you want to buy a commercial property, a home loan can allow you to obtain long-term loans with low rates because the property you buy can secure the loan as collateral.

Equipment financing

If you need to buy a piece of equipment, equipment loans are a great solution. The equipment you buy serves as collateral for the loan amount you borrow, which can reduce the interest you pay.

SBA 7(a) Express Loan

If your credit is strong and you can wait a week or two for the loan, SmartBiz specializes in issuing Small Business Administration loans in less than 7 days. This only applies to SBA loans under $150,000 (larger loans still take 4-6 weeks on average). The good thing about a SBA loan is that it will offer some of the lowest interest rates your business can qualify for.

Family or friends

Nobody likes to do that: it’s difficult and embarrassing, with the potential for hurt relationships later. But loans from friends or family remain an incredibly popular way for many businesses (of all sizes) to raise capital. If you have someone you particularly trust, and who in turn trusts you and your small business, receiving this type of loan is not a bad way to go.

Nav’s Verdict: Quick Business Loans

With so many types of business loan programs to choose from, which one will you choose? Imagine what your business could do with working capital loans like the ones we’ve discussed here.

Want to know more about business loans and flexible financing? Read our articles »How do business loans work?” Where “Can you use a personal business loan?

This article was originally written on June 15, 2020 and updated on February 28, 2022.

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