Getting fast business funding is especially easy these days. However, you shouldn’t choose a lender quickly just because they’ll give you a loan quickly. So, let’s go over your options for getting a business loan fast.
Your Fast Business Funding Options
Access to fast business funding is typically easiest online. Alternative lenders have a strong online presence, so they are the best place to look.
As for your loan options, you can access most forms of business financing rather quickly. Within a few days (sometimes just one day), you can access:
- A business line of credit
- Merchant cash advance
- Business term loan
- Working capital loan
You can find these options and other ones quickly. The key is which lender you choose, which is the hard part.
Some business lenders advertise their speed as a core component of their business. In fact, some lenders specialize in getting your fast business funding into your account within 24 hours. Regardless of which lender you choose, you can expect a few consistent experiences.
What To Expect With Fast Business Funding
First of all, you can expect alternative lenders to offer a wide range of terms on their loans. Some lenders offer bad loans across the board, while others only offer good loans. In any case, the specific terms you have access to will depend on:
- Your credit score
- Your business financials
- How long your business has been operating
When it comes to your business financials, most of these lenders will only care about your income. Some will want to look more closely into your actual profit, or even your income:debt ratio. However, your credit score will take priority when they assess the terms they can offer you.
When it comes to your time in business, there will usually be a minimum requirement. Most traditional banks will want to see at least two years’ experience in business before they consider you for a loan. Alternative lenders might not even have this requirement. However, for more serious alternative lenders, you might need 3-12 months of business experience to be eligible for a business loan.
How To Assess Your Offers
Shopping around for the right loan is an important step. It helps you avoid problems that have harmed, or even ruined, other businesses. Look at your offers and take some time to assess the terms you’re offered.
Interest Rates
Your interest rate will be the most important expense in any loan. Don’t take a loan with an interest rate that can cause you to have new cash flow problems. The larger your loan is, the more you should take the interest rate into account.
APRs
The Annual Percentage Rate (APR) on a loan is the rate you will be charged for borrowing. Lenders are required by law to include this rate in any offers they send you. Your APR includes the total interest costs for the life of the loan.
APRs can be a bit misleading because they can include a mix of different factors. They also don’t include the rates you will pay if you fail to make minimum payments. They are still a good reference for the amount you will have to spend when taking out a particular loan.
You should always try to go with the lowest APR you can find. If a set of loan offers otherwise meets all your needs, sort them by their APRs.
Extra Fees
All forms of fast business funding will carry some sort of fee. The fees you should look out for include:
- Processing fees
- Application fees
- Late payment fees
- Early repayment fees
While early repayment fees seem counterintuitive, they are often charged by lenders who don’t want you to pay off your loan too soon. They would rather have you keep the loan for its intended lifespan. That way, they get the most out of their interest charges.
These extra fees aren’t as important as interest rates and APRs. However, they must still be considered when you’re deciding on a business loan.
Repayment Terms
This factor is crucial to your cash flow. Different fast business funding options have widely different repayment terms. So, you’ll want to pay close attention to the repayment terms on any fast loans.
First of all, pay attention to the repayment schedule they lay out for you. Some loans can be paid off over a long period of time. Others must be paid back very quickly.
These factors are often hidden in the fine print, so pay attention to them. Of course, also look for any fees associated with repayment.
When you’re reading through the fine print, consider how the terms will affect your cash flow. The terms offered here have serious implications for your immediate cash flow, so they deserve the extra attention.
Need Fast Business Funding? Here Are Your Next Steps
Once you’ve laid out all your expenses, you’ll need to make a decision. It’s wise to create a spreadsheet to show you exactly which loans are best for you right now. The spreadsheet should include:
- APRs
- Interest rates
- Total costs of all fees
- Term lengths
- Repayment schedules
- Monthly expenses
The best loan for you can then be determined with some simple math.
