Every small business owner needs to maintain a sufficient amount of cash flow in the business. And having access to capital from traditional way is great, but only when you can wait for months. Sometimes a situation arises when a business needs quick funding to cover the financial issues such as replenishing inventory, buying equipment, invest in advertising and marketing, and so on. Thanks to alternative lending for providing fast business loans.
What Are Fast Business Loans?
Fast business loans do exist in the form of short-term business funding solutions with high interest rates. A fast business loan is a type of business funding solution that are made to fulfill business purposes that has a short lead time between applying and funding being available to the small business borrower.
Fast Business loans are normally unsecured in nature and therefore the lending decision will be based on the owners’ personal and business creditworthiness.
How Fast Business Loans Work?
Fast business loans are especially designed to meet the short-term capital requirements of small businesses. These requirements include but are not limited to getting a large order, purchase additional supplies and hire more staff for new project. With a fast approval loan, you can get the funding you need in just one day.
Types of Fast Business Loans
Understanding which type of fast business loan is the best for your business can be a challenge. There is no one-size-fits-all funding program as the rates, terms and qualification criteria vary by each fast business loan type. Here is a breakdown of six main types of fast business loans available to small-business owners.
- Unsecured Business Loans
An unsecured loan is a common type of fast business funding that don’t require a borrower to provide collateral or other valuable assets to secure funding. Due to their unsecured nature, these types of loans are best for businesses who don’t collateral and personal guarantee to secure funding. Businesses experiencing bad credit problems can also get the benefit from unsecured business loans.
How it Works?
Unsecured business loan works the same way as any other business loans do. A lump sum amount of cash is provided by the lender that the business needs to pay back over a set period of time. The interest rates on unsecured business loans are fixed. This type of business loans can be acquired from banks, alternative lenders and through peer-to-peer lenders.
Most importantly, unsecured business loans get you approved on the same day of applying and funding can take 1-2 days.
Unsecured business loans are best for funding the new business project.
- Working Capital Loans
Working capital loans are also another type of fast business loans. Basically these loans can help fund day-to-day expenses of your business. These type of business loans are made to help small business owners to invest and strengthen their business cash flow cycle. There are many business owners that make the mistake of investing their personal assets into the business, which later can cause some serious problems. Working capital loans offer fast and flexible funding that gets them the cash they need for the growth and success of their small business.
How it Works?
As stated above small business owners rely on working capital just to strengthen their cash flow and to meet their daily operational expenses. Working capital loans are specifically for existing small businesses who need short-term funds for a particular need. The amount of working capital a business qualifies for highly depends on the income the business has generated over the last year of operation.
These loans are considered one of the fastest funding program and can be acquired in just a couple of days of applying.
Working capital loans can be used to pay your employees, manage overhead, taxes, and any other essential costs.
- Equipment Financing
There are many business out there that require the use of heavy machinery and equipment in order to perform the basic function of their job. These expensive equipment and machinery are expensive and the acquisition of these require lots of cash that some business owners don’t have or can’t afford to manage. With equipment financing, businesses can access the necessary capital to purchase the machinery needed to thrive in their industry.
How it Works?
The equipment loans are another type of business loans that offer quick funding to small businesses. The business can get an amount to purchase the equipment and in this setting the equipment serves as collateral against the borrowed amount. If a business defaults on repayments, the lender can take back the ownership of equipment.
This type of funding can be acquired in just a day or two.
This type of business loans are meant to purchase new or used equipment to improve business productivity.
- Merchant Cash Advance
Merchant Cash Advance is another type of fast business loans. Basically it’s a purchase and sale of future income. This type of business funding program is not ruled by regulatory bodies. Additionally there is no limit to the interest rates. Normally businesses such as restaurants, retail businesses and other service providing companies that have a large credit card sales, can acquire merchant cash advance. You don’t need to have a perfect credit score and collateral for a merchant cash advance.
How it Works?
Merchant cash advances or MCAs provide a lump sum amount to businesses in exchange of a percentage from their future credit/debit card sales. The repayment of a merchant cash advance is quite simple and unique. Normally as it relies on the daily sales from credit/debit card, the repayments on merchant cash advance are made on a daily basis. The lender can take a set percentage from the daily card sales.
Merchant cash advances involves same day approval and funding.
This type of funding can be used for almost any purpose. However merchant cash advance can be used for dealing with financial emergencies, such as for repairing a broken or damage equipment, tax payments, utility bill payments, as well as purchasing inventory for the season.
- Unsecured Business Lines Of Credit
This type of short-term funding is also a valuable financial tool for small business owners. It is basically a revolving loan that provide access to fixed amount of capital. These lines can be used to meet the short-term business requirements.
How it Works?
With unsecured business lines of credit you can draw an amount against the predetermined credit limit as and when you need it rather than getting the full loan amount. So basically it is a revolving credit line. It also provides you flexibility to pay interest only on the amount that you draw from your line.
You can acquire an unsecured business line of credit in just a couple of hours.
Unsecured business lines of credit can be used to cover operating expenses, purchase inventory, repair a critical equipment, marketing and advertising, and filling cash flow gaps.
If you are a small business owner and looking for business loans to fund your business immediately, these fast business loans can help you. For more details, please give us a call on our toll free number (833) 827-4412. Alternatively, get your free online quote by filling our online application form, if you’re ready to apply for fast business loans.