A traditional business term loan can be hard to get for small businesses. Even an SBA loan is not always possible to get. Small business funding approval will likely lean heavily on personal credit.
While secured business loans are easiest to get and have the best terms and rates, secured loans are not going to be fast. A loan that you get quickly and without security will usually have higher interest rates and less favorable terms.
The key is to look for small business financing programs from non-traditional lenders. Many of these operate online and you can get pretty fast business loans if you qualify.
1. Equipment Financing
If you need equipment, equipment financing is a good way for any business to get fast funding. It’s not hard to get because your equipment is the collateral for the loan.
Lenders will request details on the equipment you are getting when you apply for this business finance option.
After a quick credit review, you can get as much as $10,000,000 in equipment financing. It only takes two monthly payments as a down payment. Rates are typically affordable, and 100% of your interest is tax deductible.
2. The Best Online Lenders
In addition to traditional loans and lenders that offer Small Business Administration options, there are also alternative lenders that function almost exclusively online. They are often a great source for a quick small business loan.
There are a lot of these lenders out there. Some are great to work with, while others are closer to a scam.
Be careful and do your own research. Here are a few lenders to get you started if you decide to pursue the fast business loan option.
Fundbox is an alternative lender that offers a line of credit rather than a term loan. Still, it is a great funding option because the requirements for approval are much more manageable than those typical of a regular bank.
What Does Fundbox Offer?
Their process is automated and super-fast. Repayments are automatic. They draft them electronically on a weekly basis. One thing to remember is that you could have a repayment as high as 5 to 7% of the amount you have drawn currently, as the loan term is comparatively short.
You will have to pay attention and be certain to manage cash flow accordingly so you have enough funds in the account to cover your payment each week.
They want to see at least 3 months in business, $50,000 or more in annual revenue, and a business checking account with a minimum balance of $500.
Upstart is an online lender that uses a completely innovative platform for small business loans. The company itself thinks that financial information and FICO on their own may not give the whole picture when it comes to the risk of making a small business loan to a specific borrower.
That means if you need a bad credit business loan, this could be an option.
They opt instead to use a combination of artificial intelligence (AI) and machine learning to gather alternative data. Then, they use this data to help them make credit decisions related to small business loan applicants..
What Kind of “Alternative Data?”
This alternative data can include such things as mobile phone bills, rent, deposits, withdrawals, and even other information less directly tied to finances. The software they use learns and improves on its own.
You can use their online quote tool to play with different amounts and terms to see the various interest rate possibilities.
Note, this is a personal loan. But, if you need funding now and your personal credit is not great, it can be a good financing option. It’s a start at least.
While they do not technically have traditional options for small business loans, you can get business financing in the form of a line of credit or do invoice factoring with BlueVine. They include lines of credit and invoice factoring.
Obtaining financing from OnDeck is quick and easy. First, you apply online and receive your decision once application processing is complete.
If you receive approval, your loan funds will go directly to your bank account. The minimum is $5,000 and the maximum is $500,000. The required credit score is historically less than that required by traditional banks as well.
3. Retirement Plan Financing
This is an excellent way to get fast business funding without worrying about small business loans. If you have a retirement plan, it may be the best option even. First, it is not a loan. There is no early withdrawal fee or tax penalty.
This Credit Suite program offers a flexible and powerful way to leverage assets that are in a 401(k) plan or IRA.
It really is fast too. In fact, it may take as little as 3 weeks. So while it isn’t a loan, it certainly qualifies as fast business funding. The IRS calls this a Rollover for Business Startups (ROBS).
Tax Repercussions of a ROBs
The IRS considers a ROBS qualified plan to be a separate entity. It has its own set of requirements. Technically, the plan owns the business, not the individual. As a result, some filing exceptions for individuals might not apply to the plan. Still, always check with a tax expert when it comes to tax matters.
How to Qualify
Honestly, it’s not hard to qualify. There is no need to submit financials or have good credit to get approval. In fact, all the lender wants is a copy of your two most recent 401(k) statements. The plan must have a value of more than $35,000 to get approval. You can get up to the amount of your 401(k) that is “rollable.”
It cannot be a plan from a business where you work currently. It has to be from previous employment, and you can’t still be contributing to it.
How Does This Program Work?
It may sound complicated, but Credit Suite business credit experts will help every step of the way. They will help you set up a 401(k) plan in your company. Next, you’ll invest your 401(k) funds in it. Your business then has the cash flow it needs, but no debt. Despite how hard it sounds, your part is fast and easy. We handle the hard stuff.
ROBS vs. a 401K Loan?
First of all, not all plans allow for loans. If your plan does, the IRS will only let you borrow up to 50%, capped at a loan amount of $50,000, before you have to start paying taxes.
Also, with a 401K loan you will pay interest. Of course, you are paying interest to yourself. However, you will be making monthly payments, whereas with the 401K Rollover for Working Capital, there is no payment.
This unique program allows you to tap into your existing retirement account without penalties or taxable distributions. You also avoid loans, banks, or credit checks. There is no debt and no monthly payment.
More Types Of Fast Business Loans
Credit Line Hybrid
It functions much like a line-of-credit. You can draw the cash you need, and repay only what you use.
It allows you to fund your business without putting up collateral, and you only have to use what you need to cover a cash flow gap, purchase supplies, or anything else.
What Are The Qualifications?
You do need good personal credit. Your personal credit score should be at least 68o. In addition, there cannot be any liens, judgments, bankruptcies or late payments on your personal credit report.
If you do not meet all of the requirements, it’s not the end of the story. You can take on a credit partner that meets them. Some business owners work with a friend or relative to fund their business.
It’s really perfect for growing a side hustle, as you can get it without a ton of documents and it’s flexible.
What is crowdfunding? It’s actually a pretty common way for small business owners to try to take a side hustle to the next level. You can access tons of investors at once. And, you can test the market at the same time.
How Does It Work?
You market your business on the platform. Anyone who wants can invest in the company. Some platforms accept donations as low as $5 or $10 dollars, though most require more.
With rewards-based crowdfunding, you get some token of thanks for your donation. With equity-based crowdfunding, which almost always requires $500 or more, investors get shares of the company.
Will It Work for You?
It works well for some businesses, but not for every business. In fact, most find that they need to supplement their crowdfunding money with some other form of funding. Since it is debt free cash however, it may be worth considering.
Merchant Cash Advance
The Merchant Financing program at Credit Suite is perfect for business owners who accept credit cards and are looking for fast and easy funding! You can be approved for as much as $500,000 in financing with no collateral requirements and bad credit.
How Does It Work?
This program is designed to help you get funding based strictly on your cash flow as verifiable per your business bank statements. Lenders will not ask for financials, business plans, resumes, or any of the other documents that a traditional lender will usually request.
Will It Work for You?
To determine approval the lender will review 4-6 months of your bank and merchant account statements. All the lenders are looking for is consistent deposits showing your revenue is $50,000 or higher annually.
They will also verify that you have been in business for 6 months or more.
Lenders looking for Non-Sufficient-Funds showing on your bank statements as well as chargebacks on your merchant statements.
Too many of these can cause issues with this type of funding. They also look for more than 10 deposits in a month going into your bank account.
Essentially, all they want to see is that you manage your bank and merchant accounts responsibly and have a good, consistent number of credit card transaction deposits each month.
Credit Suite Can Help You Get Financing
The truth is, you may not really want a fast business loan right now. There are costs and other factors to consider. One of the other options may work better, and you may even get a higher credit limit.
In fact, a fast business loan that offers same business day cash in your account is one of the most expensive types available. Instead of quick business loans, it’s more useful to have flexible financing options in place to use as needed.
When that is the case, you can have access to funds on the same business day without having to worry about a fast business loan. You can bridge a cash flow gap, take advantage of business day payment discounts, and more.
The Credit Line Hybrid usually works really well too. It is a great, flexible business line option. Of course, if you have a retirement plan, it’s hard to beat a ROBS.
Find out how we can help you qualify for financing that will fit your business needs with the best rate and loan term possible for your situation, as well as the financing options we offer, now.