Tips to Secure Quick Small Business Financing Online

Disclaimer: Information in the term loan articles is provided for general information only, does not constitute financial advice, and does not necessarily describe Biz2Credit commercial financing products. In fact, information in the term loan articles often covers financial products that Biz2Credit does not currently offer.

Using small business financing can solve a wide range of needs for a business operator. Sometimes, that funding is urgently needed, leading to a panic to get funding quickly.

Here’s what you need to know about securing a quick business loan.

When to Consider Small Business Financing for Your Business

There are several common times during the business cycle when using a quick business loan may be necessary.

Cash Flow Fluctuations

Businesses can experience cycles of low cash flow due to seasonal trends, economic shifts, or temporary dips in sales. Inconsistent cash flow can make it difficult to meet everyday business needs like payroll, rent, or inventory purchases. Using a quick business loan can help stabilize the cash flow of the larger business.

Large Purchases

Some business expenses require a large loan amount, such as purchasing new equipment, office space, or expensive software. Small business financing can bridge this gap without interrupting your business.

Financing Options for Small Business Owners

There are numerous online business loan options available to small business owners, ranging from traditional loans to more creative funding solutions. The best choice for your business depends on factors such as the amount of funding needed, the business’s financial health, and the purpose of the financing.

Small Business Loan Options

Small business loans are typically offered by traditional lenders like banks or credit unions, along with alternative online lenders. Each lender will have its own credit score requirements, origination fees and prepayment penalties, so be sure to compare options to find the best loan product for you.

Some small business loan types include:

• Business Term Loan: A term loan is an upfront lump sum of cash that is repaid over a set period. Term loans can be a short-term loan (1–3 years) or long-term (5–25 years). These loans can be secured (requiring collateral) or unsecured. Secured loans typically will have more competitive rates, while unsecured term loans can have higher interest rates. This type of loan can be used to fund a wide range of business needs.
• Equipment Financing: This type of loan is specifically for purchasing or repairing equipment. This reduces risk for the lender and can bring lending costs down.
• SBA Loans: The U.S. Small Business Administration (SBA) offers loan programs, like the SBA 7(a) loan, which are partially guaranteed by the government. This guarantee lowers the risk for lenders, resulting in lower interest rates and longer repayment terms for borrowers. However, SBA loans can take longer to underwrite and have stricter approval guidelines.
• Business Line of Credit: A business line of credit provides access to a pool of money, similar to a business credit card. You can withdraw up to the credit limit, and you only pay interest on the amount borrowed. This flexibility makes lines of credit a great fit for someone who doesn’t know much they need to borrow but wants immediate access to funds.
• Real Estate Financing: CRE loans can be a good option for business owners looking to buy land, build a new warehouse, or make renovations to their existing building.

How to Qualify for an Online Business Loan

Eligibility for a small business loan or other financing depends on several factors, including the lender, loan type, and the borrower’s financial situation. Lenders generally evaluate these criteria when reviewing loan applications:

Creditworthiness

Both personal and business credit scores are considered when applying for a small business loan. Each lender has its own lending standards, with many having a minimum credit score to be approved.

A high credit score shows lender that you have the ability to manage business debt, which increases the odds of being approved for better loan terms. However, even business owners with bad credit can still qualify for financing through alternative lenders. It may result in higher lending costs such as a higher interest rate or larger fees.

Financial Position

Lenders review a business’s financial health by looking at cash flow, annual revenues, and financial statements like income statements and balance sheets. A consistent cash flow shows lenders that the business can absorb a rigid repayment schedule with low risk of defaulting on the loan.

Time in Business

Time in business is a large factor that lenders consider. Businesses with more than two years of operations are considered lower risk. Newer businesses may have a harder time being approved, but there are lenders that specialize in funding newer businesses.

Tips to Get Fast Business Loan Approval

Here are a few tips to give yourself the best odds of a quick underwriting process and fast funding process:

Choose an Online Lender

Online lending companies can provide much faster approval and funding than traditional banks. As everything is done online, it can be the best way to have a fast business loan experience.

Gather Documents Ahead of Time

Being prepared with the required documentation can speed up the business funding process. Typical documents you will need to be approved for a small business loan include bank statements, tax returns, and balance sheets. The less time you spend finding these documents, the faster you can hopefully be approved.

Final Thoughts

Understanding the different types of financing options available and preparing them in advance can streamline the application process and get you a fast business loan. Online lenders can offer fast funding options, sometimes within 48 hours to get borrowers funding.

By following these tips, you can potentially secure a quick business loan for your business.

FAQs about Quick Business Loans

What is the best fast business loan?

The quickest way to get an online business loan is to apply online through a reputable lender or financial institution with an expedited underwriting process. Make sure you have all of your paperwork needed to speed up the approval process.

How do I get a small business loan?

Find a lender that fits your needs, prepare and submit the online application with the necessary documentation. Then, you can compare loan offers to find the one that works best for you.

Is it possible to refinance small business loans?

Yes, you can refinance small business loans. Many lenders offer the ability to refinance a business loan to get better terms, lower interest rates, or consolidate debts.