What are the fastest loan options when my business needs cash quickly?

Instant gratification and results are a cornerstone of modern business with today’s consumers expecting products, services, and solutions to be delivered at lightning speed. A bank loan, though, was a very lengthy and tedious process that involved miles of paperwork and lots of waiting around.

Getting a loan has changed over the years. Today, there’s less paperwork, fewer government regulations and technology is doing much of the hard work. There are more financing options that process much more quickly than traditional loans from a bank, but it isn’t instant money.

Small Business Loan Options

While you’ll find the fastest way to get cash below, it may not be the best fit for your business. Different small business loan products will vary in their purpose, application process, and cost. To determine which fits best for your needs, be sure to review the small business loan options listed below.

Short-term loans are among the simplest available. In many ways, they are like a traditional bank loan. You borrow a lump sum from $2,500 to $250,000 and you are funded in as fast as two days. Then you repay it plus fees and interest over a set period of time.

Repayment periods are short. Payments can be daily or weekly depending on the terms and that means that you need to have the cash flow to meet your repayments. These loans can be quite expensive so make sure to know the total cost before signing on the dotted line.

Buying expensive equipment may be necessary for your growth. But how do you make that possible if you can’t afford it? An equipment loan just might be the solution.

Different from traditional term loans, equipment financing is a form of asset-based lending in which the equipment you buy serves as collateral. By using the value of the equipment, lenders are able to establish your creditworthiness.

Just how much you can borrow with an equipment loan depends on many different factors, and they all have to do with the equipment itself. New or used, expected lifespan, and so on - so many things matter. The type of equipment you want to finance will matter greatly, and for good reason. The lender wants to know that their collateral has value and that it’s in decent condition. Approval can happen in a matter of days, often covering the full cost of the equipment.

Rates are generally fixed and usually between 8% and 30%.

Most of the customers you invoice will pay on time, but there are always those who take longer. When they do, you might be left short for bills or payroll. But invoice financing can get you money in as little as one day so you can keep your business moving.

It’s also called accounts receivable financing. Like equipment financing, an invoice loan uses an asset as collateral but it isn’t just any asset, it’s your accounts receivable. The lender advances approximately 85 percent of the invoice amount up front.

You receive the rest of the funding as customers pay their bills. The lender takes a percentage of each payment as fees, though, so you do pay for it. For example, a processing fee of three percent plus another one percent a week until the customer has paid in full.

Merchant cash advances are among the easiest loans to get with bad or no credit. With minimal paperwork required and little time necessary for underwriting, you can be approved and funded in as few as two days.

With a merchant cash advance, you get a lump sum up front based on your monthly revenue. You then repay the loan plus fees through a percentage of your daily credit and debit card sales. Payments usually continue this way until the full amount is paid.

Proceed with caution. It may also be the most expensive of these options. One upside, however, is that payments are a set percentage of sales. That means they shrink when business is slow.

All four options can put money in your account in as little as a day or two. But quick money is expensive money, and you may not want it. If you aren’t in a rush, you can likely find cheaper financing by shopping around.

Good Budgeting

If your company is scrambling to find capital sources just to make payroll, you’re not alone. Fortunately, it is a symptom that doesn’t need to happen, as good budgeting and consistent funding cycles can ease much of the volatility a new business can experience.

Every time you receive or disburse money, make an entry in your general ledger. By tracking all of your company’s financial activity, you can estimate your burn rate and cash runway. Once you do, you can see if you have enough reserves in the bank. If you don’t, you can make up for a shortfall with a budget adjustment instead of scrambling for a high-interest loan.