When to consider a fast business loan

The main points

Businesses that want quick funds to pay bills or capitalize on an opportunity should look into fast business loans.

Fast Business Loans can be approved in less than 24 hours.

Fast business loans may not have the best terms, so it is important to consider all of your options.

An emergency, limited-time growth opportunity or unexpected business expense may create an urgent need for working capital. Many businesses loans take weeks to months to approve and finance, but with quick business loans, which are typically available through internet lenders, you may obtain the money you need in as short as five days. And you can get it in less time.

In return for faster financing, you'll often pay higher interest, so it may not be suitable for all situations.

When to consider a fast business loan

Quick financing is the main draw of fast business loans. A situation may arise where you need cash urgently, and waiting a week or more for a loan approval may not be an option.

1. The business is in danger of closing.

Rents, utilities, salaries, and other business expenses are going up, and income isn't always keeping pace. You need funds for your fixed expenses to keep doors open and give you a chance to improve your situation. A fast business loan can buy time for business income growth.

2. Chance to advance in a limited time

If an opportunity to grow your business arises unexpectedly, you don't want to miss it. You may want to take advantage of discounted professional marketing services or purchase new office space in an area of the city you want.

3. Unexpected expenses

Business operating costs can be unpredictable. Small businesses often face a variety of unexpected expenses, such as utility increases, supply costs, or equipment downtime. You may need to address these expenses immediately to avoid impacting daily business operations. If you are short on cash, a quick loan can save the day.

4. Other kinds of business finance are not available

The lending criteria for traditional business loans may not be as favorable as you will find for fast business loans, which are often offered by alternative lenders. Since credit score, operating time, and annual income are major factors that affect approval, someone with bad credit or just starting a business may not qualify for a traditional business loan.

When to consider fast loans alternatives

A quick business loan can be a solution to some financial situations but don't rush to sign up for an expensive option. You want to take the time to look at your situation and make sure that there is no better alternative to your situation. A quick loan may not be suitable if:

• Your need for capital is not urgent.

• You need to get more loan money than a quick loan can provide.

• You may qualify for other types of business financing, such as a business line of credit or business credit card.

Listick Tip

While fast business loans give businesses quick access to money, they also come with risks. Review all of your options, including alternatives, before signing a loan agreement and receiving financing.

Quick loan alternatives

When you require quick access to working money, a fast loan is not your only alternative. Instead, consider:

Business lines of credit: They provide business owners with credit up to a specified amount to cover various business expenses. Like a credit card, a line of credit only requires interest payments on the amount borrowed, but may incur fees, including withdrawal fees and maintenance fees.

Business credit cards: They work like personal credit cards but are designed specifically for business purchases. You spend up to your credit limit and pay off your bill in full, or the card company will impose interest on any remaining balance. The credit limit is usually lower than the business credit limit, but companies often get incentives and rewards for using their cards. Note that with this option, a personal guarantee may be required from the employer.

SBA Express Loan: Small Business Administration loan approval usually takes at least 30 days. But Express Loans, which has a maximum loan limit of $500,000, offers a fast-track process that ensures loan applications will be reviewed within 36 hours. However, financing takes additional time.

Bottom Line

When you need quick access to working capital, a fast loan could be the answer. You could have cash on your hands in as little as five days, but you still want to consider the pros and cons before applying for a fast business loan. Other financing options may be better for your situation.