How to Get a Quick Small Business Loan

Conventional business loans tend to take a long time to process, but not every small business has the time to wait for money. Whether you need to increase cash flow to navigate short-term challenges, you want to take advantage of a business opportunity, or you’re just ready to grow, there may come a time when you need a business loan quick.

Traditional lenders like banks and credit unions often struggle to underwrite loans quickly, but alternative lenders can offer quick business financing options. That way, you can meet business challenges as soon as they arise and take advantage of opportunities quickly. If you’re in need of a fast business loan, we break down the process here.

In this article:

• Learn how to get small business loans quick and explore some of the best fast business loan
• Understand why many small businesses can benefit from quick business funding.
• Learn how to apply for a fast business loan.

How to Get a Business Loan Quickly

Many traditional business loans may take weeks or even months for underwriting and processing. The application process is demanding, and small business owners must show significant financial documentation and a business plan that covers how they’ll use the money.

But markets change fast, especially in the thin-margin world of small business. That’s one major advantage that fast business loans have over traditional loans. Depending on your business’s needs and use of the funding, you may be able to get an instant business loan that infuses cash into your company.

There are many online lenders that offer fast funding to small businesses with flexible terms and competitive interest rates. Generally, the qualification requirements are less rigorous, too, depending on the amount of funding you’re looking for. If you have bad personal credit or your business is just starting out, quick business loans offer access to the cash you need to grow your business.

Why a Small Business May Need a Quick Business Loan

There are many reasons why a small business may need a quick business loan. There are also a wide variety of quick business funding options, available in a couple of business days or even the same day you apply. Some common uses for fast business loans include:

• Meeting short-term expenses: Contract- or invoice-based businesses like construction companies or consulting firms may occasionally have delays in payments, which complicates covering essential operating expenses like payroll and equipment loans. Quick business funding solutions like invoice factoring, merchant cash advances (MCAs), or working capital loans can help avoid the negative consequences of missing payments to employees or business lenders.
• Navigating seasonal challenges: Seasonal businesses like restaurants or retail outlets in vacation towns tend to make much less money in the offseason. Short-term business loans can give them the working capital they need to stay open through the offseason, with repayment terms that allow them to pay off the loan in the busy season.
• Working capital: Every business needs working capital to cover day-to-day expenses and stay prepared for surprises. Fast working capital loans resolve cash flow shortages and allow businesses to stay liquid through business lulls or temporary cost increases.
• Equipment financing: Equipment like a commercial oven in a restaurant or an industrial sewing machine at a tailor can make a huge difference for a business. With a fast equipment loan, you can get the equipment now and pay it off later.
• Emergencies: A piece of manufacturing equipment breaks down, an employee unexpectedly quits, or a misprint on a label — these are all examples of costly mistakes that may cause a financial emergency. These are all instances in which you could use a business loan quick.
• Startup loans: Most traditional lenders need borrowers to have at least two years in business, which makes them a poor choice for startups. Online lenders, however, are more willing to work with new entrepreneurs and get them the money they need to start operations quickly — especially if they have a good credit history and offer a personal guarantee.

How to Choose the Right Quick Business Loan

The right quick business loan for you isn’t necessarily the right one for another business. The right one now might not be the right one later. Depending on the lender, you may be able to find several same-day business loan options as well as some larger loan options that may take a few days to process. To help you choose, we break down some of the most common types of business loans below.

Term Loans

Traditional loans tend to be business term loans, but they don’t have to be long-term loans. Multi-million dollar loans often have seven to 25-year repayment schedules, but you can also get short-term loans with terms of two years or fewer.

If your business needs a large lump-sum payment but expects to drive significant profit from this loan, a short-term business loan is a good way to get fast funding with competitive rates, without taking on long-term debt.

Pros:

• Typically larger maximum loan amounts
• Fast funding times, sometimes same-day funding available depending on the loan amount
• You can use the funds for many business needs, from equipment to real estate

Cons:

• Interest rates vary significantly between lenders
• Slightly more difficult to qualify for than other loan types
• May have prepayment penalties and high origination fees

Working Capital Loans

Working capital loans are a type of short-term loan that offers flexible repayment schedules to fit your business’s needs. They offer quick access to cash for your business that you can use to cover operational expenses, consolidate debt, or use to help finance growth-minded purchases like equipment or raw materials.

Working capital loans may have daily, weekly, or monthly repayment schedules depending on the loan terms. They’re generally used by businesses that have immediate funding needs to handle specific business or financial issues

Pros:

• Same-day funding is usually available
• Help you navigate specific challenges and get out of debt quickly
• Good credit may secure lower interest rates

Cons:

• May have higher interest rates
• May have frequent repayments that can become burdensome

Business Lines of Credit

Part loan, part business credit card, business lines of credit are excellent resources for any business. With a business line of credit, you’re approved for a maximum credit limit that you can draw on whenever you need. You only pay interest on what you draw, giving you the flexibility to use the credit line when you’re short on cash or want to make a major business purchase.

Business lines of credit are useful for any business, especially because they are usually very easy to qualify for and have a fast approval process. Whenever your business is short on cash, it can always fall back on a line of credit, provided you repay it quickly.

Pros:

• Only pay interest on what you use
• Easy to qualify for
• Can use credit for virtually any business purpose

Cons:

• High interest rates

Merchant Cash Advances

An MCA is when a lender gives a business a lump sum of money in exchange for a percentage of the business’s future sales for a prenegotiated amount of time. They’re commonly used by entrepreneurs with bad credit or new small business owners who can’t get approved for a bank loan or line of credit.

An MCA can be useful to get out of a financial emergency, but they’re not an ideal solution as they’ll limit future profit.

Pros:

• Instant business loan to get out of an emergency
• Easy to qualify for

Cons:

• High interest rates
• The better your business does, the more you’ll pay the lender
• Often have frequent repayment terms, like daily or weekly payments

Invoice Factoring/Financing

Invoice factoring and financing are two types of quick business loans that leverage your company’s unpaid invoices.

In a factoring arrangement, a business sells unpaid invoices to a third-party in exchange for cash upfront. The third-party collects on the invoices and charges a factor rate, which is an additional amount necessary to pay off the loan. In an invoice financing arrangement, a business uses unpaid invoices as collateral for a cash advance. Then, the business repays the cash advance, plus a percentage of the invoices once they’re paid.

Both of these solutions can help your business out of an immediate cash crunch.

Pros:

• Instant business loan to get out of an emergency
• Easy to qualify for

Cons:

• Cut into your future profit margin
• Requires significant outstanding unpaid balances

How to Apply for a Quick Business Loan

Applying for a quick business loan is often easier than applying for a traditional bank loan. The process typically looks like this:

1. Determine your business needs: Understand why you need a loan and how you’ll use the money. This will help you determine the best loan type for your business.
2. Shop lenders: Different lenders offer a variety of loan products, not to mention different interest rates, repayment terms, and qualification requirements. You must find a lender that meets your business needs.
3. Gather paperwork: Online lenders tend to need less information than banks or credit unions. You’ll often only need general information about the business owners and business, like a social security number (SSN) and employee identification number (EIN) to pull a personal credit score and business credit score, if available. You might also need monthly or annual revenue reports, too.
4. Get approved and funded: The whole point is to get a business loan quick, and many lenders offer same-day business loans to get you funded fast.

While most quick business loans have lower eligibility requirements than traditional bank loans, that doesn’t mean they’re guaranteed. Every lender has different minimum credit score requirements, business revenue requirements, maximum loan amounts, and other loan terms. Depending on your business situation, you may not qualify for the most favorable interest rates or terms.

To increase your chances of getting approved:

• Take the time to improve your credit score if necessary.
• Create and show a strong business plan that indicates how you’ll use the money to increase profits.
• Show financial documents like bank statements, income statements, and asset and liability statements that can strengthen your case.

Conclusion

Most small businesses eventually reach a moment when they need cash fast. When that happens, securing a business loan quick can help cover immediate costs and take advantage of business opportunities. This guide will help you secure a quick small business loan when you need one.

FAQs

What are the best quick business loans?

The best quick business loans are ones that offer fast funding and favorable terms for your business. Whether it’s a term loan, working capital loan, or something else, you must ensure that you’re getting the money quickly and can repay it in a reasonable timeframe, with reasonable interest.

How do I get a business loan quickly?

There are many ways to get a business loan quickly. Shop and compare lenders to find the best loan offers for your needs, and then fill out an online application to get fast funding.

How do small business loans work?

Small business loans work just like personal loans, except they provide funding for businesses. Like a personal loan, you’ll apply, get approved, and receive a lump sum payment that you’ll have to repay with interest over a repayment schedule.

How can I qualify for a small business loan?

To qualify for a small business loan, you’ll often need a FICO score of at least 600 and strong monthly or annual revenues. Traditional lenders like banks and credit unions often have higher eligibility requirements, including at least two years of business operations. Loans backed by the U.S. Small Business Administration (SBA) may have even higher requirements.

How can I get a fast business loan?

Getting a fast business loan may be as easy as applying online with Biz2Credit and submitting to a credit check. We’ll review your application and, in many cases, can deliver funding to your business bank account on the same day you apply.