6 Things Need to Know Before Getting a Fast Business Loan

Whether it’s a business emergency or a fantastic opportunity in front of you, you need access to capital now. Not later.

Many traditional loans can take a few days (or even weeks) to process. By the time you receive the funds, it’s already too late.

6 Things Need to Know Before Getting a Fast Business Loan

Whether it’s a business emergency or a fantastic opportunity in front of you, you need access to capital now. Not later.

Many traditional loans can take a few days (or even weeks) to process. By the time you receive the funds, it’s already too late.

Instead, you need a fast business loan. There are plenty of options out there, but no matter which one you pick, you can receive the funds in as little as 24 hours.

But it’s easy to overlook crucial details in your rush to get funds. You could get stuck with high interest rates, excessive fees, or unfavorable terms if you aren’t careful. 

To that end, we’ve created a list of things you need to know about getting a fast business loan. Remember, if you don’t have time to run through this list — which is likely the case, if you need funding fast — you can work with, BCCUSA and we’ll figure these out for you.

1. Why Do You Need a Fast Business Loan?

First and foremost, iron out the reason you need a fast business loan. Is it an emergency? Do you have an immediate lucrative opportunity in front of you? Are tough economic times coming, and you need to pad your emergency savings fast?

Lenders will want to know your reason for seeking a loan. More importantly, knowing why you need funding will help you pick a financing vehicle and a lender type.

2. Types of Fast Business Loans

 

  • Business credit line: Lets you borrow money on demand (up to a limit) and repay whenever, as long as you make the minimum payment. Operates like a credit card. Approval process takes 24-48 hours (although some may take less than 24), then you have funding immediately when you need it.
  • Invoice financing: Sell or loan your accounts receivables for capital. Funding occurs in as fast as 24 hours.

 

    • Merchant cash advance: It could take two days to see funds, but some providers hand you money within 24 hours.
    • SBA Express loan: A faster version of the 7(a) loan. Higher interest rates and lower borrowing limits. Turnaround time can be as little as 36 hours.

 

  • Term loans: Traditional loans with fixed repayment. Often require collateral. May be harder to find a fast term loan, although some can be had in as little as two days.

 

3. Types of Lenders

Banks

Banks provide term loans and lines of credit. You can find excellent rates and terms through bank products, but your credit and financials must be strong. Additionally, you’ll need collateral.

Also, keep in mind that not all banks lend fast. You’ll have to shop around to find banks that can get you a loan quickly, or work with a broker to do it for you.

Small Business Administration

You can get an SBA Express loan from the Small Business Administration. SBA loans are made by regular lenders but backed by the SBA, reducing the risk the lender takes. As a result, they offer reasonable interest rates and long repayment terms. You may need a high credit score and collateral to qualify.

Online Lenders

Is your business young? Online lenders might be your best bet. They’re known for being friendly to new businesses and getting cash in your hands quite fast.

The catch is that interest rates can be relatively high. They may have different repayment terms, too — some may require daily or twice-monthly repayments.

4. Qualifications

Credit Score

Credit score plays a substantial part in your ability to get loans. A higher credit score indicates a lower likelihood that you default. Banks tend to have the highest credit requirements, usually asking for at least a 680 score.

Lenders want to see both your business and personal credit score. You can get one free personal credit report per year from each of the three credit bureaus — Experian, Equifax, and TransUnion. 

You can obtain your business credit score as well from each bureau, but it will cost you. Experian, for example, offers business credit reports for $39.95 per report.

Financial Health

Lenders also want to see you have the capability to pay back your loan. 

Account for your cash flows as well. Your expenses may be too high to provide you the necessary cash flow for repayment, despite high revenues. Some lenders — mostly online lenders — require more frequent repayment, making cash flow vital. Aim for revenues to be at least 1.25x your expenses.

Time in Business

The longer you’ve been in business, the more likely you’ll continue to be in business. Lenders have more financial and credit history to evaluate when you’ve run your company for years. For most bank loans, you need two years of business history. Online lenders tend to be more lenient, requiring one year.

5. Documents to Bring

Different types of fast business loans will require different documentation. Merchant cash advance providers, for example, will care more about your credit card sales history than your personal finance history.

With that said, here are some common documents that lenders ask to see.

  • Bank statements (personal and business)
  • Business financial statements
  • Legal documents (such as your articles of incorporation)
  • Tax returns (personal and business)

6. Other Things to Keep in Mind

1. “Fast” is Arbitrary

Almost every lender claims they offer “fast business loans”, but it’s often more of a marketing ploy. “Fast” isn’t a standard governed by regulations or industry practices. 

This isn’t as much of a problem with merchant cash advances and invoice financing (although some of these lenders could be slow), but more so with term loans. Brokers like BCCUSA can help you find lenders that truly deliver fast loans.

2. Fast Business Loans Shouldn’t Have a Catch

Fast cash is more likely to come with a catch. For example, if you were to raise venture capital funds, the investor may want you to use their money for a narrow purpose — one that might not align with your business goals. Should you break your agreement, they’ll demand their money back.

Spending days researching the lending marketplace isn’t an option when you need funding now. BCCUSA is here to help. We help you through the entire process, from analyzing your financial situation to picking a financing vehicle to communicating with lenders and closing on the loan. Schedule your free 30-minute consultation today so we can evaluate your best possible sources of fast funding. 

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