Best Lenders for Quick Working Capital
How Can I Get Money for My Business Fast?
Traditional loans like those offered through the SBA and banks don’t tend to come quickly, so if you’re looking for fast working capital, you may want to explore other options.
Alternative lenders can quickly approve and fund your business loan, sometimes on the same day. If you need fast capital, look at the options we discuss below.
How Do Fast Business Loans Work?
Alternative lenders typically look at other criteria besides creditworthiness, such as annual revenues and assets. Because they don’t dive as deep into your business financials, they can make a decision on approval faster, sometimes instantly after you click “apply.”
If you’ve set up your business bank account with the lender, the funds will be deposited in as little as one business day, giving you the access you need to cash.
Common Reasons for Needing a Fast Business Loan
So why would you need a fast business loan? If you didn’t anticipate a cash shortage, you might be struggling to pay your bills. A quick loan can get you the cash you need to cover those expenses.
You might also have an opportunity to take advantage of an opportunity to purchase another company and don’t have time to wait, nor cash on hand. That’s another example of where a fast business loan could come in handy.
How to Qualify for a Fast Business Loan
Because alternative lenders don’t necessarily look at your credit scores, there may be other ways you can qualify for a fast business loan. First, your business needs to have been in business for at least a year or two. There may also be requirements for annual revenues.
The Best Lenders for Fast Business Loans
So what’s the best loan for you? Here are a few Nav partners we think have great business loan options to consider.
Line of Credit by Kabbage
Time for approval and funding: Funds deposited within 3 business days once approved
How much can you borrow: $2000 – $250,000
How long can you borrow it:
APRS and fees: o 2-9% for 6-month loans o 7.5-18% for 12-months loans o 15.75-27% for 18-month loans
Line of Credit by Kabbage
Kabbage Funding™ is a registered trademark of American Express and is a great solution for small business owners looking for a flexible line of credit option with an easy application process.
FUNDING AMOUNT
$2000 – $250,000
COST
o 2-9% for 6-month loans o 7.5-18% for 12-months loans o 15.75-27% for 18-month loans
REPAYMENT TERMS
N/A
FUNDING SPEED
Funds deposited within 3 business days once approved
More Details
OnDeck
OnDeck’s short-term business loan product allows business owners to quickly take advantage of opportunities or handle obstacles that they encounter.
Minimum requirements: qualifying applicants have a personal credit score of 500 or higher, at least 1 year in business, with a minimum of $100,000 in annual business revenue.
Time for approval and funding: OnDeck’s loan application process takes approximately 10 minutes. By applying online or over the phone, you can receive funding as quickly as within 1 business day after you’re approved. Being prepared—providing thorough information and having any necessary documents ready to go beforehand—can help speed up the process.
Required paperwork: Business tax ID, bank statements for the last three months, the SSN of business owner(s), merchant and credit card processing statements for the last three months (if applicable).
How much can you borrow: $5k to $250k. You will typically qualify for a loan that is 10% to 15% of your business’s annual gross revenues.
How long can you borrow it: The repayment term can be up to 24 months, with payments automatically debited from your bank account on a daily or weekly basis.
APRs and Fees: OnDeck loans range from around 20% to 40% APR, and the APR on their cash flow loans can be up to 100% APR.
Personal guarantee and collateral: OnDeck requires a personal guarantee and places a lien on general business assets.
Merchant Cash Advance (MCA)
If you accept credit cards and have a fairly consistent flow of credit card receipts flowing through your business, an MCA could be a viable option for your business. Although a merchant cash advance is not a loan, but rather an advance on your credit card sales, most providers are able to give you an answer to your application the day you apply and can have funds in your account within a day or two after that.
The cost of an MCA will likely exceed the costs of an unsecured loan from most online lenders—including the two we’ve mentioned above.
Other Financing Options
Finally, let’s take a quick look at a few more affordable options for fast business funding. While these approaches may not be as fast as going to lenders like OnDeck or Kabbage, depending on the business need you’re trying to meet, the extra effort might be worth it in the long run, given the amount of money you stand to save.
Credit Cards
Credit cards don’t always seem an obvious choice for people looking for fast business loans, but if used right they can be a quick and easy source of business capital. If you have reasonably good credit, you might want to consider getting a business credit card. The ideal way to use these cards is to pay the full balance every month. As you do so, you’ll keep the credit limit available for those times when you need access to a quick loan and build your business credit score at the same time. The average APR for a credit card is 16%, significantly lower than some of the options we’ve mentioned. And while it’s true that you’re limited to your credit line regarding what you can and can’t purchase, another advantage of credit cards is that many of them offer introductory 0% interest rates as well as rewards such as cash back with purchases, frequent flier miles, hotel stays, etc.
Capital One Spark Classic for Business
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Invoice Financing
Do you have irregular cash flow because you’re often waiting for your customers to pay you for services or products you’ve provided? Invoice financing (invoice factoring) can be a good option for B2B businesses with long invoice cycles. Invoice financing allows you to get paid immediately rather than waiting for your customers to pay you.
Real Estate Loans
If you want to buy commercial property, a real estate loan can get you long terms with low rates, since the real estate you’re buying can secure the loan as collateral.
Equipment Financing
If you need to purchase a piece of equipment, equipment loans are a great solution. The equipment you purchase acts as collateral for the loan amount you borrow, which can reduce the interest you pay.
SBA 7(a) Express Loan
If your credit is solid, and you can wait a week or two for the loan, SmartBiz specializes in issuing Small Business Administration loans in under 7 days. This only applies to SBA loans under $150K (larger loans still take 4 to 6 weeks on average). The nice thing about an SBA loan is that it will offer some of the lowest interest rates for which your business can qualify.
Family or Friends
No one likes doing this: it’s hard and feels embarrassing, with the potential for injured relationships down the road. But loans from friends or family remain an incredibly popular way for many businesses (of all sizes) to find capital. If you have someone you particularly trust, and who in turn has faith in you and in your small business, receiving this type of loan is not a bad way to go.
