For businesses it can be tempting to take advantages of fast loans in order to cover unexpected expanses. Some lenders provide companies business loans as a sort of credit. They want repayment of the principal plus interest and fees in exchange for this 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 fast. Sometimes, this quick funding can be the only solution to your cash flow problems. And sometimes, you don’t want – or even have the time – to go through lengthy applications that some of the long term low-cost business loans have. In this article we answer the following question: what options do you have? Regardless of which type of business loan you apply for, it is important to obtain the right information about every type of fast business loans.
What Do I Pic?
If you need a small business loan fast, banks and credit unions are not going to be an option for you. They simply require too much documentation and their process general takes too long. The best way to find your fast business capital is by searching for lenders online. (But keep in mind: fast, quick and easy loans often mean they will cost more and have less favorable terms). If you want a fast business loan, remember that you do take your time on which lender you choose. Below, we discuss the multiple options that you have:
1. Short-Term Business Loans
Short term loans provide a fixed amount of money up front, that 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 indeed quite fast, they typically fund in 24 hours, or in some cases the same day. In order to qualify, you need at least 6 months of business revenue, $200,000 in annual sales, excellent credit scores, and a healthy bank statement cash flows.
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 costs on the amount you’re using. Similar to short-term business loans, they typically fund in 24 hours, or in some cases the same day. You need to be 1 year in business, good to excellent credit scores, $120,000 in annual gross sales, and a 3 months bank statement. (As there are fewer lenders that offer this loan, it can be harder to find and more difficult to get approved).
3. Merchant Cash Advance (or: Business Cash Advance)
By selling a portion of your future sales at a discount to a funder, you can get immediate cash for your business. This type of loan works fast and has higher approval rates, but tend to have shorter terms and higher costs. This lender also typically fund in 24 hours, or in some cases the same day. You don’t need to have 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 numbers can already help you qualify. (Typically the rates and costs are higher, as funders take on greater risks).
4. Business Credit Cards or Personal Credit Cards
Similar to the Business Line of Credit loan, credit cards only charge principal and interest based on the balance. A credit card is accepted by most retailers, online and offline, and can be used to purchase products or pay invoices. You can apply online and get, in most cases, instant approval. Just about anyone can get a business credit card, so for the approval, it shouldn’t be a problem in most cases.
5. Equipment Leasing
You must be purchasing new equipment to be able to use this loan. Here you can apply online and get, in most cases, instant approval. All you need are a one-page application sheet and the details of the new equipment you’re trying to purchase. Lease terms vary from 12 to 72 months, with monthly payments. (Costs are higher than that of business loans).
In short, there are multiple lending companies that are fast and may suit your business. Make sure that you make the right decision for your company by doing enough research before application. You don’t want surprises afterwards.