Quick Business Loans
Quick Business Loans From a Lender You Can Trust
Expect the unexpected…the phrase is even more true if you’re a small business owner.
In a typical month you could face cash flow issues when a major customer doesn’t pay on time, supply chain headaches if increases in produce prices double your grocery bill, or an unexpected jump in payroll if a manager doesn’t send idle staff home. When things go wrong, you could need money fast.
But it’s not always negative – maybe you need a quick capital infusion to jump on a business expansion opportunity, or to buy machinery at a discount from a competitor who’s going out of business. When challenges and opportunities arise, getting a loan approved quickly could help you grow and move your business forward.
There are times when having to complete a lengthy loan application process, go through underwriting, and wait weeks to months to receive funding could mean watching a great opportunity pass you by. That’s when a quick business loan could help.
What is a Quick Business Loan?
A quick business loan is a loan that funds in a few days or even as fast as the same day. It may have a reduced underwriting process, or the underwriters request fewer documents for approval. As collateral, you could pledge credit card receivables or allow the lender to take a percentage of future sales.
These flexible loans fund much quicker than traditional small business loans, and are designed to help business owners out in a crunch. They have shorter repayment periods – typically a few months to at most two years. Because of reduced underwriting requirements or no-collateral requirements, you may pay a higher interest rate than at a bank.
If you need quick results, alternative lenders are your best option. Alternative and online lenders have built robust underwriting tools and algorithms that allow them to approve loans faster than traditional banks.
How Easy is it to Get a Quick Business Loan From a Bank?
Most banks take a conservative and slow approach to lending. Their underwriters often request substantial documentation to approve a loan, and can come back with additional requests several times throughout the loan application process. There is no such thing as a “quick” business loan with a bank.
As an example, they could request: two years of tax returns, six months bank statements, financial statements prepared by an accountant, credit card receivables and sales data for over a year, a credit report and/or business credit report, and more. Gathering this information could take you time that you don’t have if you need money quickly.
What’s more, you have to supply all this information and wait while the underwriter reviews it. Banks have a long and thorough underwriting process because of federal regulations. Even the quickest bank loans can take months to get approved. You could go to all this trouble without even knowing if they will approve the loan until the very end. It’s a slow and lengthy process that could end in frustration.
Quickest Business Loan Options Available
Luckily, you have several options to help you get the financing you need quickly.
Merchant Cash Advance
With a merchant cash advance, funds could appear in your bank account in as little as 24 hours. Lenders extend an advance on future credit card receivables, so all they need to see is your past few months credit card sales. Once they fund the advance, it’s repaid automatically when they take a small percentage of each future credit card sale.
Merchant cash advances require just two months in business, a minimum credit score of 500, and minimum monthly revenues of $8,000. You can borrow up to $250,000, with a repayment period of two months to a year. Rates range from 24% to 49%, which reflects the lender’s risk in extending credit without having higher loan requirements.
It’s super easy and fast to apply for a merchant cash advance since the lender doesn’t care about years of tax returns or financial statements.
Working Capital Loans
The term working capital refers to the funds you need to meet the day-to-day obligations of running your business. Rent, payroll, and utility bills all fall under working capital requirements. If you’ve been struggling to meet these obligations, a working capital loan could be the best solution.
Designed to help with cash flow issues, a working capital loan can fund in just a few days. It requires a minimum credit score of 650, two months in business, and $10,000 minimum monthly revenues. You can take anywhere from one to three years to pay it off.
These loans are easy to pay off. The lender debits your bank account daily or weekly so you don’t have to budget for a large monthly payment.
Bad Credit Business Loans
If you have bad credit, and have been turned down at traditional banks, you can still get funding quickly with a bad credit business loan. These loans can be underwritten and funded in 24-48 hours. An alternative lender will extend credit to small business owners with a credit score as low as 500 as long as you have minimum monthly revenues of $8,000.
Because you have bad credit, the lender is taking on more risk in funding a loan. Interest rates range from 12% to 45%, which helps them cover their risk.
Short-Term Business Loans
Short-term business loans could take a little longer to fund, but you can borrow up to $1 million. Repayment terms range from one to three years. These loans are best suited for longer-term projects because you can plan for how you’ll use the capital.
These loans require that you have been in business for over two years and have a minimum credit score of 650, but because they have higher loan requirements than other quick business loan options you’ll pay a lower interest rate. Your interest rate could be 9% to 45%, some of the lowest on this list.
Deciding Which Option is Right For You
As some of the examples above indicate, one quick loan product could jump out as your option.
If you need to meet payroll or pay rent – apply for a working capital loan. If you anticipate more long-term capital needs and want to take longer to repay the loan – apply for a short-term business loan. Where you need to use the funding can often point you towards the best quick business loan option.
Establishing the time frame that you need funds available and plan on using those funds helps you determine the best quick business loan option. Looking at your business’ history – both time in business but also your credit score – could narrow your options.
If you’re borrowing to fund a larger project such as an expansion, do you have a back-up plan if there are project delays or things don’t go as planned? It’s important to consider all variables and how you would respond to them before borrowing.
Lastly, ask yourself what you can afford. It’s never a good idea to take out a loan if the payments would put your business in jeopardy. Make a budget and be realistic about how the loan would impact future cash flows. If you can’t come up with a reasonable plan to repay the loan, think twice about borrowing.
How Quick Business Loans Can Have an Impact
If you won’t have the cash on hand for payroll on Friday, getting a working capital loan on Wednesday could keep your employees from quitting. If buying machinery from a competitor who is closing their doors could save you thousands of dollars, with a small business loan you could jump on the opportunity. Knowing about quick business loans and how to get one can make an important difference in your business.
Quick business loans are an excellent tool for small business owners to rely upon at various points in their business’ lifecycle. Establishing a relationship with a trusted lender like Shield Funding means that you can work together successfully for long-term success. Go here to find out more or apply today.