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Last Updated on December 27th, 2021 by

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No matter how much attention you pay to your budget, cash flow projections, and how closely you monitor actual results, life as a small business owner is unpredictable. There are times when your best efforts weren’t enough, or an opportunity arises you couldn’t have predicted, and you could need money in a hurry. 

Fast business loans are a great funding tool for small business owners. They can allow you to seize an opportunity, keep you in business, or gain a competitive edge. Receiving some type of quick business loan is in direct contrast to how banks and most lending institutions work which is what makes them so attractive. Most business loan options can take weeks or months before the funds are in your hands. This is why finding a lender that offers immediate funding can impact your success. Here are some examples how a fast business loan can make a difference. 

Seize a Last Minute Opportunity

When opportunity knocks, you want to answer. But what if you don’t have the cash reserves to open the door? A fast business loan could make it possible.

Even though you’ve prepared a budget based on expected sales, and ordered inventory to meet demand, you might get a last-minute large order. A customer could call and ask if you have the production capacity to double their last purchase order. If you’re a service provider, a wedding party’s caterer fell through and they need someone fast and will pay double your normal rates – but you need the money to pay your staff overtime, rent an additional delivery van, and pay for rush produce delivery. 

A fast business loan makes it possible for you to say “yes!” when you get that call. Not only will this helps your revenues, it could make you a customer for life.

Beat Out a Competitior

Last minute opportunities aren’t always customer-related, however. What if another manufacturer is going out of business and you have the chance to scoop up their machines at a discount? But another competitor is looking at them, too.

In many cases, quick access to capital helps you beat out a competitor. It could allow you to buy machines and expand, also capturing your failed competitor’s business from another business. If finished inventory is available at a discount, you could buy it, too. 

When an opportunity comes up to beat out a competitor, but you don’t have the cash reserves to seize it, a fast business loan could set you up to beat them out now and in the future. 

Cover a Working Capital Need

Working capital is the money that funds day-to-day operations. The term applies to rent, utilities, and payroll – business funding needs that aren’t always directly related to generating revenue, but keep the doors open. 

If you don’t pay your employees on time, they could start looking for a new job. Losing valuable employees’ talents and skills has the potential to negatively impact your business for months and years to come – especially if they take customers with them. Failing to make payroll isn’t an option, but sometimes cash flow doesn’t cooperate.

If a major customer didn’t pay their invoice on time, or credit card receipts were lower than expected, you could struggle to meet your working capital obligations. A fast business loan covers this temporary gap, keeping your employees or landlord happy.

Replace Broken Machinery

Let’s say a key piece of machinery breaks in the middle of processing a large, last-minute order. That last-minute opportunity could turn into a nightmare if you don’t act fast. But you don’t have time to apply for a large equipment loan and go through underwriting.

A fast business loan helps you get a replacement installed quickly. You can call up a large machine vendor without jumping through a bank’s hoops and minimize your shop’s idle time. By paying cash for the machine you don’t have to wait for a bank’s appraiser to assess its value or an underwriter to examine your credit history. A fast business loan puts that cash in your pocket. 

Characteristics of Fast Business Loans

If your business’ situation fits one of the scenarios above, you have a need for quick capital. But before you apply for a fast business loan you should know a few things. 

Fast business loans can be funded in as little as 24 hours or less, assuming you get the lender the required documentation quickly. You’ll need proof of your business’ revenues for the past few months, proof of credit card receivables if taking out a merchant cash advance, and copies of your driver’s license and business license. 

Because the lender is advancing money quickly, without examining two years of tax returns and bank statements or a full underwriting process, they’re taking a higher risk with your loan. Expect them to compensate for this risk with a higher interest rate. They could charge you between 12% to 45%, plus fees. 

Often, this is still less than a credit card’s cash advance rates. And since you can borrow between $5,000 to $2 million, you can take out a loan for much higher than a credit card’s limit. Make sure, however, that you have a repayment plan before you borrow. 

A fast business loan can be the right funding move for your small business.