Business Guides

Quick Business Loans: How to Get a Business Loan Fast

Last updated on December 30, 2019

Jacques Famy Jr

Sometimes as a business owner, you need money fast. Whether your business is large or small, it’s very likely at some point; you will need to access capital for your business fast! When these situations occur, you don’t have time to go through the lengthy application process that some long term low-cost business loan options have.

Business loans that you can get in 24 hours or less may be your only solution to your cash flow problems. Many businesses need money fast for emergency cash flow needs to make payroll, supplement a client who’s not paying your business on time, or some great opportunity that you need cash for, and you have to make the purchase fast.

The following guide will prepare you for just such an occasion. We’ll breakdown the best types of quick business financing products, compare and contrast how fast, how they work, and the pros and cons of each fast funding option.

Best Types of Quick Business Loans

In your search for fast business funding, there are limited options to find that business capital. Terms and costs will differ product to product, and that will be a cost to the expedited speed to get the money fast for your business.

In today’s world, it will be best to go online to search for fast business capital. Banks and credit unions are probably not going to be an option because they require more documentation, and their process will take longer than and be too time-consuming. Fast, quick, and easy is not what banks do when it comes to business lending.

There will be a price to pay for speed, and you can expect, as a business owner, to pay for fast, quick, and easy meaning that they will cost more and be less favorable terms than long term business loans and business credit lines.

That being said, if you need money fast, it is what it is and can be a valuable resource to help your business in both the short term and long term health of the business.

Let’s explore the best types of fast business financing options available and breakdown how fast they are, how they work, and the reasons for picking that option.

Short-Term Business Loans

Pound for pound, short-term loans will be a great option if you need to address those business cash flow issues we discussed. They work fast and have higher approval rates than traditional loans.

How fast are they?

Short-Term business loans typically can fund in 24 hours or some cases the same day.

How do Short-Term Business Loans Work?

Qualifications for short-term business loans are usually at least six months of business revenue, $200,000 in annual sales, fair to excellent credit, and healthy bank statement cash flows.

Short-term business loans have fixed terms that are typically repaid within 6 to 18 months, factor rates between 18% to 38%, and monthly, weekly, or in some cases daily payments. Usually, you are only required to provide and a short application and three months’ bank statements to get terms to consider. A tax return may be required for higher loan amounts but not typically required for loans under $100,000.

Best Reason for Taking This Product Over Other Options

Short-term business loans are faster and have higher approval rates than traditional loans, lower fees, and costs than merchant cash advances and have lower documentation requirements than most traditional business loan products.

Short-Term Business Lines of Credit

Short-term business lines of credit are a great alternative business funding option when you want to access smaller amounts of money over a period of time while only paying interest costs on the amount you are using. This is compared to a fixed term, fixed amount product like a short-term business loan.

There are fewer alternative lenders that offer this product and can be harder to find as well as more difficult to get approved than some other short-term business loan products.

How fast are they?

Short-Term Business Lines of Credit can be as fast as short-term business loans with funding’s same day to 24 hours.

How Do Short-Term Business Lines of Credit Work?

This product usually has a principal amount and interest that accrues, unlike short-term business loans, which have fixed costs. However, you are only responsible for paying interest on the current balance once payments are due. These rates and costs vary depending on the borrower’s credit and qualifications but can be 12% to 28%.

Qualifications are 1 year in business (unlike short-term business loans), good to excellent credit scores, $120,000 or more in annual gross sales, with only an application and 3 months bank statements to get qualified.

Best Reason For Taking This Product Over Other Options

FLEXIBILITY. By far, the main reason to choose short-term business lines of credit is the ability only to take what you need for your immediate needs and only pay the cost for that money. Coupled with access to future money up to your credit limit without going through any additional application process, it’s a great option.

Merchant Cash Advance (also known as Business Cash Advance)

Merchant Cash Advance (also known as Business Cash Advance) is a Futures sales receivables purchase agreement. Small business owners can raise money quickly by selling a portion of their future sales at a discount to a funder in exchange for immediate cash for the business. They work fast and have higher approval rates than that of traditional loans or short-term business loans, but tend to have shorter terms and higher costs.

How fast are they?

Merchant Cash Advances from pre-qualification to funding has similar turn-around times of that of short-term business loans from the same day to 24 hours. 

How Do Merchant Cash Advances Work?

Unlike short-term business loans, merchant cash advances have flexible repayment options. Repayment is based on a fixed percentage of your future monthly sales, which is different than a fixed payment daily, weekly, or monthly that a short-term business loan. Rates and costs are typically more than short-term business loans because they take on greater risk with lower credit standards and flexible repayment.

Best Reason For Taking This Product Over Other Options

APPROVAL RATES. You have a greater likelihood of getting approval for a Merchant Cash Advance than that of traditional, short-term loans and business credit lines.

Business/Personal Credit Cards

Credit Cards work similarly to that of a business line of credit in that you are only charged principal and interest based on the balance of the credit line. A plastic or metal card is issued and is accepted by most retailers, both offline and online, to purchase products or pay invoices for vendors. Payments are monthly, and minimum payments are relatively low.

How fast are they?

Business/Personal credit cards, you can apply online and, in some cases, get instant approvals through an online portal with the use of a credit card for purchases and payments within hours.

How Do Credit Cards Work?

The amount you can get approved for is smaller than that of business loans and advances. However, unlike other loan products, all you have to supply is your name or business name credit card number, expiration date, and maybe a security code, and you are ready to purchase. Repayment is monthly, and you can choose the payment you want to make with a minimum required payment option. Credit requirements vary, but good credit or better are usually required, and all that’s needed to get an offer is an application in most cases.

Best Reason For Taking This Product Over Other Options

SIMPLICITY. Very easy to apply for and very easy to use.

Equipment Leasing

Equipment leasing, although pretty quick as well as other products mentioned are specific. You must be purchasing new equipment to be able to use this product. No cash out is permitted, so it has limited use.

How fast are they?

With equipment leasing, you can apply online and, in some cases, get instant approvals through an online portal with only an application and details about the equipment you are financing, anywhere from instant to within 24 hours.

How Does Equipment Leasing Work?

A simple one-page application and details of new equipment you are trying to purchase are all you need. Equipment lease terms vary from 12 months to 72 months with monthly payments. Costs are higher than that of business loans and charge a flat total factor cost.

Best Reason For Taking This Product Over Other Options

SIMPLICITY. Very easy to apply for and very easy to use.

 

Questions to Ask Yourself When Choosing Business Funding

As with most financing for the business, whether you need money fast or not, you should always ask the question what are you using the money for and how it will benefit you and your business.

Sometimes paying higher costs and less favorable terms is worth it because of either qualifications or speed. Some of the needs of the business, such as cash flow shortages, payroll funds, a default payment on money that is owed to the company, which is causing cash shortages, there can be no choice.

Always conduct a cost versus benefit analysis when making a decision to get money fast for your business. Once you agree to terms and receive your money, you and your business will be responsible for paying back, so make sure it’s worth pulling the trigger to get business funding for your business.

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* All loans made by either WebBank, an FDIC-insured Utah industrial bank, or Bank of the Internet Federal Bank, an FDIC-insured federally chartered thrift located in California. In connection with the loans, the Banks' underwriting conditions and terms apply.