For businesses, it can be tempting to take advantage of quick loans to cover unexpected expenses. Some lenders offer business loans as a form of credit to businesses. They require repayment of principal plus interest and fees in exchange for the money. Working capital loans often require the borrower to make regular payments according to a set schedule, but repayment terms and interest rates vary widely depending on the lender and your credentials.
Sometimes you may need a business loan quickly. Sometimes this quick financing may be the only solution to your cash flow problems. And sometimes, you don’t want – or even have the time – to go through the lengthy application process that some long-term, low-cost business loans require. In this article, we answer the question: what options do you have? Regardless of the type of business loan you apply for, it’s important to get the right information about each type of fast business loan.
What should I do?
If you need a quick loan for your small business, banks and credit unions will not be an option for you. They simply require too much documentation and their process is usually too long. The best way to find your fast business capital is to look for lenders online. (But keep in mind that quick and easy loans are often more expensive and come with less favorable terms.) If you’re looking to get a quick business loan, remember that you need to take your time when choosing the lender. Below we look at the multiple options available to you:
1. Short Term Business Loans
Short-term loans provide a fixed amount of money up front, which is repaid in installments over a set period of time – usually repaid in monthly installments, but there may be options to repay more frequently. A short-term business loan is actually quite fast, usually being funded within 24 hours, or even the same day in some cases. To qualify, you must have at least 6 months of sales, $200,000 in annual sales, excellent credit scores and healthy cash flow on your bank statement.
2. Short-term business lines of credit
If you want to access smaller amounts of money over a period of time, while only paying interest on the amount used. Like short-term business loans, they are usually funded within 24 hours, or even the same day in some cases. You must be in business for one year, have a good to excellent credit score, $120,000 in annual gross sales, and a three-month bank statement. (Because there are fewer lenders offering this type of loan, it can be more difficult to find and get approved.)
3. Merchant Cash Advance (or: Business Cash Advance)
By selling a lender a portion of your future sales at a discount, you can get immediate cash for your business. This type of loan works quickly and has higher approval rates, but it tends to have shorter terms and higher costs. In addition, this lender typically funds within 24 hours, or even the same day in some cases. You don’t have to have several years in business to qualify, unlike other business financing options. Repayment is based on a fixed percentage of your future monthly sales, and solid sales figures can already help you qualify. (Generally, rates and costs are higher, as lenders take on more risk).
4. Commercial or personal credit cards
Similar to the business line of credit loan, credit cards charge only principal and interest based on the balance. A credit card is accepted by most retailers, both online and offline, and can be used to purchase products or pay bills. You can apply online and get instant approval in most cases. Almost anyone can get a business credit card, so approval should not be a problem in most cases.
5. Equipment Leasing
You need to purchase new equipment in order to use this loan. You can apply online and get approved immediately in most cases. All you need is a one-page application sheet and details about the new equipment you are trying to purchase. Leasing terms range from 12 to 72 months, with monthly payments. (Costs are higher than business loans).
In summary, there are many loan companies that are fast and can work for your business. Make sure you make the right decision for your business by doing enough research before you apply. You don’t want to have any surprises later on.