What are Fast Business Loans?
While there’s no standard definition of a fast small business loan, online lenders can typically approve and fund loans within 1-3 days. Some lenders might take 3-10 business which is still faster than most traditional loans.
Online lenders are the primary source of expedited business loans, although a few banks and credit unions may offer fast funding programs. One of the ways online lenders expedite the loan process is through streamlined applications.
Many online lenders use fintech tools, including AI, to quickly connect to your business bank accounts and analyze your finances. This allows online lenders to circumvent traditional lending institutions’ tedious and time-consuming manual underwriting process.
Streamlined applications take much of the stress away for small business owners, as they can usually apply within 5-15 minutes. Most online business loan applications require minimal documentation.
Some lenders can provide approval as quickly as 4 hours after applying, and many can approve online loan applications within 24 hours. Once approved, alternative lenders can use wire transfers or ACH transfers to quickly send the funds to your account.
The tradeoff for the convenience and brevity of online applications and fast funding times are increased costs. Most quick business loans will have higher interest rates and fees than traditional ones.
The increased expense may be worth it if you need a sudden influx of capital, but you should take every precaution to minimize the financing costs. Some quick business loans carry higher rates than others.
What Fast Business Loans are available?
Expedited business loans basically mean any financing option where you can receive your funds within 3-10 business days. Here are some of the best fast business loans to consider.
Business Term Loans
Term loans are the most common form of business financing. With a term loan, the small business receives a large sum upfront, which it then repays, plus interest and fees, in fixed payments.
Businesses can use term loan proceeds for various business purposes, including working capital, purchasing commercial real estate or equipment, expanding locations, acquiring another company, or refinancing business debt. Some lenders may restrict the use, but it varies.
Many online lenders only offer short-term loans, which must be repaid within 18 months. However, several alternative lenders provide medium- and long-term loans as well. A term loan through United Capital Source offers the following ranges:
- Amount: $10k – $5 million.
- Rates: Start at 8%.
- Term: 3 months – 10 years.
- Speed: 1-3 business days.
Business Lines of Credit
A business line of credit provides a credit limit from which you can draw funds as needed. You then only repay what you borrowed plus interest and fees. Most credit lines are revolving, meaning your credit limit replenishes when you repay.
Alternative lenders offer different amounts, rates, and terms for a line of credit. Business credit lines through United Capital Source have the following features:
- Amount: $1k – $450k.
- Rates: starting at 8%.
- Term: up to 18 months.
- Speed: 1-3 business days.
Equipment Financing
An equipment loan is like a term loan, except it’s specifically for purchasing business equipment. You can use the loan to buy most equipment, from commercial kitchen appliances to construction equipment to computers and office furniture.
The equipment you’re financing becomes the collateral for the loan. If you default, the lender claims the equipment to cover its loss. This is known as a self-collateralizing loan. You might be familiar with other self-collateralized loans, such as mortgages or car loans.
Equipment loans through United Capital source offer the following:
- Amount: Up to $5 million per piece of equipment.
- Factor rates: Starting at 3.5 %.
- Term: 1-6 years.
- Speed: 3-10 business days.
Invoice Factoring
Invoice factoring, also called invoice financing, allows you to turn unpaid invoices into immediate working capital. The process requires working with a third-party financial institution called a factoring company. When you factor your invoices, you essentially sell ownership to the factoring company, which issues an advance based on the invoice value, called an advance rate.
Your customers pay their invoices directly to the factoring company, which then sends the remainder to you minus its fees. Invoice factoring through UCS offers:
- Funding amount: $10k – $10 million.
- Factor rates: starting at 1% p/mo.
- Term: Up to 24 months.
- Speed: 1-2 weeks.
Merchant Cash Advance
With a merchant cash advance (MCA), borrowers receive a large sum of cash upfront, which is then repaid from a percentage of daily debit and credit card sales. Some lenders use a fixed percentage, while others use flexible terms so borrowers only repay what they can afford. A merchant cash advance from United Capital Source offers:
- Funding amount: $5k – $1 million.
- Factor rates: starting at 1.09.
- Term: 3-18 months.
- Speed: 1-2 business days.
What are the best Fast Business Loan lenders?
As a small business owner, you have many lender options for quick business loans. Selecting the best lender depends on your unique needs.
That being said, here are four of the best lender options for fast business loans.
OnDeck
OnDeck is an online business lender with two products: business term loans and business lines of credit. The company launched in 2006 and has extended over $13 billion to small businesses.
The online lender specializes in quick funding for short-term financing. OnDeck is also known for approving businesses that can’t qualify for a traditional business loan.
To qualify, you will need the following:
- A minimum credit score of 625.
- At least one year in business.
- Minimum annual revenue of $100,000.
Fundbox
Fundbox is an online lending platform that offers term loans and business lines of credit. Their main product is the revolving line of credit, which provides credit limits of up to $150,000. Repayment terms are 12 or 24 weeks. Interest rates begin at 4.66% for 12-week terms and 8.99% for 24-week terms.
You must meet the following to qualify:
- Minimum Credit Score: 600.
- Time in Business: 6 months.
- Annual Revenue: $100,000.
Bluevine
Bluevine is a financial technology company specializing in small business financing and lightning-fast funding times. Its main product is a revolving line of credit for up to $250,000. In addition, it offers an online-only business checking account.
You must meet the following to qualify:
- At least six months in business.
- At least $100,000 in annual revenue.
- A minimum credit score of 600.
Funding Circle
Funding Circle is a peer-to-peer lending platform for business loans. The fintech company provides a combination of direct lending to businesses and investment opportunities to financial institutions.
It offers business term loans ranging from $50k to $500k, a business line of credit between $5k and $25k, and SBA loans. The company doesn’t list an annual revenue requirement, but applicants must meet the following qualifications:
- At least two years in business.
- A minimum credit score of 660.
Am I eligible for a Fast Business Loan?
Each lender and business loan carries different qualification requirements. Here’s what you need to qualify for alternative business loans through United Capital source.
Business Term Loans:
- Credit score: 550+.
- Annual revenue: $75k+.
- Time in business: 6+ months.
Business Lines of Credit:
- Credit score: 550+.
- Annual revenue: $75k+.
- Time in business: 6+ months.
Equipment Financing:
- Credit score: 600+.
- Annual revenue: $250k+.
- Time in business: 1+ years.
Invoice Factoring:
- Credit score: 550+.
- Annual revenue: $255k+.
- Time in business: 1 year.
Merchant Cash Advance:
- Credit score: 550+.
- Annual revenue: $120k+.
- Time in business: 4+ months.
How to apply for a Fast Business Loan:
Follow these steps to apply for expedited business lending.
Step 1: Consider Your Needs
Before you begin the application process, take some time to make sure this is the right product for your individual needs. Will you be able to use the capital for your desired purpose? Is the repayment structure conducive to your cash flow? Do you know exactly how much funding to request? Does the funding speed work for your needs?
Answering these questions ahead of time will make the rest of this process much smoother.
Step 2: Gather Your Documents
Documentation requirements vary depending on the loan you’re requesting. For example, invoice financing will require your A/R and A/P aging reports. A merchant cash advance requires bank statements showing card payments.
Regardless of the loan, expect to provide these basic documents during the application:
- Driver’s license.
- Voided business check.
- Bank statements from the past three months.
- Financial statements.
Step 3: Fill Out the Application
You can begin the application process by calling us or filling out our one-page online application. Either way, you’ll be asked to supply the information from the previous section along with your desired loan amount.
Step 4: Speak to Representative
Once you apply, a representative will contact you to explain the repayment terms, interest rates, and terms you qualify for. This will ensure that there are no surprises or hidden fees during repayment.
Step 5: Receive Approval
If approved, funds should appear in your bank account in 1-10 business days, depending on your loan type.
What are the advantages of Fast Business Loans?
As their name implies, the most significant benefit of fast business loans is the quick funding time. These small business loans are an excellent option for urgent working capital needs.
In order to facilitate fast funding, online lenders offer quick and easy applications as well. In most cases, you can complete an online application in 5-10 minutes, and they require minimal documentation.
Most fast business loan lenders use fintech tools to connect to your business bank account and analyze your finances. This not only reduces the amount of required documentation but also helps lenders approve loans faster.
Many online lenders can approve business loans within 24 hours, and some offer same-day approvals. Lenders also use fintech tools to send the funds electronically so that you can receive the money within 1-3 business days after approval.
Since fast business loan lenders base approval more on your business’s finances than your personal credit score, business owners with less-than-perfect credit can get approved. Online lenders typically have more lenient qualifications than traditional lenders.
Fast business loans also entail several different financing options. You can find a business loan to meet just about any purpose and repayment structures that make sense for your business. These business loans are usually available as secured or unsecured loans.
What are the disadvantages of Fast Business Loans?
The primary drawback to fast business loans is the cost. Higher interest rates and increased fees are the tradeoffs for the convenience and speed of funding.
Some fast business loan options, like merchant cash advances, carry higher costs than others. It’s up to you to determine the best loan and repayment structure. While these loans do typically have lower qualification requirements, it generally goes that the easier it is to qualify for a loan, the more expensive it will be.
Many fast business loans carry shorter repayment terms than traditional business loan options. Short-term loans typically mean loans repaid within 18 months, and repaying the total amount in that timeframe can be difficult.
Several loan structures also require daily or weekly repayment. The frequent repayments and short repayment terms could mean higher payments that strain your cash flow.
While it’s not always the case, fast business loans tend to have lower borrowing amounts. You will likely need a more traditional loan option for amounts over $250,000.
Some online business loans will require collateral or a down payment. Most require a personal guarantee, meaning you’re responsible for the loan.
Fast Business Loan pros & cons
Here is a quick summary of the benefits and drawbacks of fast business loans.
Pros:
- Quick access to funding for your small business.
- Fast and easy loan applications with minimal documentation.
- Most online lenders can provide an answer on loan approval within 24 hours.
- There are multiple loan options available to meet different business needs.
- Lenders use fintech tools to quickly transfer loan funds to your bank account.
- Less stringent qualifications than traditional business loans.
- Secured and unsecured loans are available.
Cons:
- More expensive than traditional business loans.
- It can be challenging to identify the best loan option for your business.
- The loans tend to have shorter repayment terms.
- Most loan structures require frequent payments, which can strain your cash flow.
- Fast business loans tend to have lower borrowing amounts than traditional loans.
- It might require collateral or a down payment.
- Most loans require a personal guarantee.
Frequently Asked Questions
Here are the most common questions about fast business loans.
How long do business loans generally take?
In traditional financing, getting the funds from a business loan would take several weeks. Many traditional lenders, like commercial banks, still use a manual underwriting process, which can take anywhere from 10 business days to a month to complete.
With the expansion of fintech over the last two decades, online lenders can significantly cut that funding time down. Some can even offer same-day funding.
Can I get a Fast Business Loan with bad credit?
Yes, getting a quick business loan with bad credit may be possible. Many online lenders base underwriting on your company’s financials more than your personal credit score.
However, you should be aware that lenders view lower credit scores as riskier options, even when your business financials are strong. As such, you will usually get a higher interest rate.
So, you want to ensure that the cost of financing doesn’t become prohibitive or force your business to lose money. With higher payments due, it could also be possible to get caught in a cycle of debt that’s difficult to escape.
One way to think of bad credit business loans is a sort of bridge financing. You can use it as a temporary stopgap to meet working capital needs while repairing your credit until you qualify for more beneficial loan options.
When is a Fast Business Loan right for my business?
Quick business loans are primarily a situational need, and several business needs could necessitate a fast business loan.
Here are some common reasons small business owners pay extra for expedited funding.
Unexpected Expenses
Even the best-made budgets can’t anticipate all the expenses your business may incur. Ideally, you’d only spend what your business planned on spending, but in the real world, new and unanticipated expenses can crop up at any time.
Some examples of unexpected expenses could include hiring new employees to meet new business needs, making repairs to buildings, equipment, etc., or exceeding your sales projections and needing new inventory. Whatever the reason, fast business loans can help you manage unexpected expenses.
Time-Sensitive Opportunities
Sometimes, a business might see an opportunity to grow or expand and must act quickly. For example, a competitor might be ready to retire and looking for a quick sale on a business. Or perhaps an ideal new location just went on the market, and you need to get your offer in close before others do. Quick funding can be a great ally when you must take immediate action on a new opportunity.
Covering Cash Flow Gaps
Sometimes your revenue isn’t coming in fast enough to cover all your cash flow needs. This can be a significant problem for businesses that sell on credit and wait for customers to pay their invoices. Fast funding for your business can help you cover cash flow gaps while you wait for your revenue to hit your business bank account.
What’s the fastest SBA loan I can get?
SBA loans are often considered the gold standard of small business financing. The US Small Business Administration oversees the program and partially guarantees up to 85% of the loans.
The guarantee provides security for lenders, who can then offer high borrowing amounts at competitive interest rates and extended repayment terms. The most significant drawbacks of SBA loans are the high qualification requirements and lengthy application and funding times.
The quickest SBA loan is the Express Loan. The SBA makes a determination on Express Loans within 36 hours, but lenders still take a while to finish the underwriting process. Most SBA loans take a few weeks to 120 days to approve and fund.
SBA Express Loans can take anywhere from 10 business days to several weeks. Consider another loan option if you have an urgent funding need.
Fast Business Loans – Final Thoughts
Quick business financing is a viable option for businesses that need urgent funding and are willing to pay more to get it. Business owners have a wide range of fast business loan options, including term loans, lines of credit, equipment financing, invoice factoring, and merchant cash advances.
Deciding on the right loan program largely depends on what you need the funds for and how you prefer to repay the borrowed money. It would be best if you also looked into the rates and fees, as some lending structures are more expensive than others. While it’s not always the case, MCAs are generally considered the most expensive form of business financing.
Established businesses with excellent credit and high annual revenue usually qualify for less expensive financing. Although, even then, the fast funding times might make alternative business loans worth the extra cost.
Contact us if you have more questions on fast business loans or are ready to apply. Our loan executives can help you find a quick small business loan option that works for your business.
