But if you’re interested in the fastest small business loans on the market, you should consider a short term loan, merchant cash advance, equipment financing, or a startup loan. These financing options are blazing fast, with the money becoming available in as little as 24 hours.
Here’s a closer look at how these 4 loans deliver:
1. Business term loan
These are the warhorses of the financing world, built for both speed and size. You can obtain as much as $2,000,000 with a business term loan, with interest rates as low as 6%. This low rate is notable because fast-funding loans usually come at a premium rate.
This type of financing can be used for business needs as varied as remodeling your office, hiring seasonal employees, or updating your fleet.
The repayment term usually falls somewhere between 1 and 5 years. And with the fixed interest rate or fixed flat fee, you can easily forecast your payments and know ahead of time exactly how much you can afford to borrow.
2. Short term loan
These loans are like smaller, more nimble versions of a business term loan. They can be used for all kinds of business-related needs and provide up to $500,000 to borrowers. The terms usually fall between 1 and 3 years, with interest rates begin around 8%.
Qualifying for a short term loan isn’t too difficult. In most cases, if you’ve been in business for more than a couple of years and have a solid credit score, you’re a prime candidate. Just know that you may be required to secure the loan with collateral.
3. Merchant cash advance
This option is one of the easiest forms of financing available. You can borrow up to $200,000, with repayment terms lasting about 2 years. As with most expedited financing, the cost is higher than average. In fact, don’t be surprised if the interest rates start around 18%.
The reason merchant cash advances are so easy to qualify for is that they’re more reliant on your future sales than your credit history. This dependency is because the repayment comes directly out of your daily credit card deposits.
As long as your business is healthy, you should be able to qualify for a merchant cash advance without the lender doing a deep dive into your past. You won’t need to submit as much paperwork as with other types of loans (just the past 6 months of receivables or bank statements), and there might not even be a pull on your credit.
4. Equipment financing
With amounts up to $5,000,000, equipment financing definitely bucks a trend among expedited forms of financing. Most fast loans have lower amounts, allowing for faster approval and repayment. But equipment financing provides access to substantial amounts, making it possible to purchase some of the most expensive pieces of machinery on the market.
You can expect interest rates to start around 7.5%, with repayment terms of 1-5 years. The money can be used for all kinds of equipment, from an excavator for your worksite to state-of-the-art software for your office. Whatever equipment you decide to purchase will then serve as the collateral for the loan, meaning you won’t need to offer up personal property such as a home, boat, vehicle, or real estate.
To qualify for equipment financing, you’ll need a credit score at or above 650. Also, your business will need to bring in at least $50,000 a year and have been established for at least a couple of years.
If any of these 4 loan products seem like a possible match for your business needs, be sure to take the time to do your due diligence before you make a decision. Because many of the fast-funding loan products out there are more expensive than those with typical funding timelines, the benefits of the financing will definitely need to outweigh the cost.
The only way to make that assessment is to carefully study each loan’s disclosures so there won’t be any surprises down the road. Using a loan calculator helps you identify the true cost, so you can develop a repayment plan that doesn’t stretch you beyond your safety zone. Using this careful approach, you’ll get the cash you require while also keeping your business healthy and primed for success.