How To Get A Business Loan In 5 Steps

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For businesses, it can be tempting to take advantage of quick loans to cover unexpected expenses. Some lenders offer business loans as a form of a credit to businesses. They require repayment of principal plus interest and fees in exchange for the money. Working capital loans often require the borrower to make regular payments according to a schedule. Still, repayment terms and interest rates vary widely depending on the lender and your credentials.

Sometimes you may need a business loan quickly. Sometimes this quick financing may be the only solution to your cash flow problems. And sometimes, you don't want – or even have the time – to go through the lengthy application process that some long-term, low-cost business loans require. 

In this article, we answer the question: what options do you have? Regardless of the type of business loan you apply for, it's important to get the correct information about every kind of fast business loan.

What should I do?

If you need a quick loan for your small business, banks and credit unions will not be an option. They require too much documentation, and their process is usually too long. The best way to find your fast business capital is to look for lenders online. (But keep in mind that quick and easy loans are often more expensive and come with less favorable terms.) If you're looking to get a fast business loan, remember that you need to take your time when choosing the lender. Below we look at the multiple options available to you:

1. Short Term Business Loans

Short-term loans provide a fixed amount of money upfront, which is repaid in installments over a set period – usually repaid in monthly installments. Still, there may be options to repay more frequently. A short-term business loan is quite fast, usually being funded within 24 hours or even the same day in some cases. You must have at least six months of sales, $200,000 in annual sales, excellent credit scores, and healthy cash flow on your bank statement to qualify.

2. Short-term business lines of credit

Suppose you want to access smaller amounts of money over some time while only paying interest on the amount used. Like short-term business loans, they are usually funded within 24 hours or even the same day in some cases. You must be in business for one year, have a good to excellent credit score, $120,000 in annual gross sales, and a three-month bank statement. (Because fewer lenders offer this type of loan, it can be more difficult to find and get approved.)

3. Merchant Cash Advance (or: Business Cash Advance)

By selling a lender a portion of your future sales at a discount, you can get immediate cash for your business. This type of loan works quickly and has higher approval rates, but it tends to have shorter terms and higher costs. In addition, this lender typically funds within 24 hours, or even the same day in some cases. Unlike other business financing options, you don't have to have several years in business to qualify. Repayment is based on a fixed percentage of your future monthly sales, and solid sales figures can already help you qualify. (Generally, rates and costs are higher as lenders take on more risk).

4. Commercial or personal credit cards

Like the business line of credit loans, credit cards charge only principal and interest based on the balance. A credit card is accepted by most retailers, both online and offline, and can be used to purchase products or pay bills. You can apply online and get instant approval in most cases. Almost anyone can get a business credit card, so approval should not be a problem in most cases.

5. Equipment Leasing

You need to purchase new equipment to use this loan. You can apply online and get approved immediately in most cases. You need a one-page application sheet and details about the new equipment you are trying to purchase. Leasing terms range from 12 to 72 months, with monthly payments. (Costs are higher than business loans).

Many loan companies are fast and can work for your business. Make sure you make the right decision for your business by doing enough research before you apply. You don't want to have any surprises later on.