Ever wondered where to find fast and easy small business loans? For example, you might need to source funding in a matter of days – where do you go? What if you’re tired of jargon-filled contracts? Or time-consuming paperwork? And what if you want a loan that works for you and your business, not the big banks? If this sounds like a familiar question, then look no further – here we run down some solutions to your fast business funding woes.
Whatever your reasons are for needing funding fast – whether it’s startup, growth, or cash flow – there are easy small business loans out there to suit you. However, it’s important to bear in mind that not all loans, grants, or funding are created equal. Each will come with their own set of unique conditions. For instance, some will require a stronger credit history than others; some will need more documentation; and some will have higher interest rates. Although in an ideal world we’d only recommend solutions with minimal paperwork, depending on your circumstances, it’s likely you are going to have to read some fine print.
Things to consider before applying
Before diving into our list, we’ll cover what you need to ask yourself when you’re considering your small business funding options. First off, you need to examine how much the cost of borrowing is going to affect your bottom line. To minimize risk, you can do an informal small business loan performance analysis with an online calculator. Alternatively, you can consult with an expert over the phone or face-to-face. These analyses will assess how the loan will impact your business financially. With this advice, you can make an informed decision about whether or not borrowing money is the best solution.
Furthermore, it’s important that you check your personal credit score before applying for SMB loans. If you’re a sole proprietor or startup, your personal credit history will be taken into account, so make sure there are no mistakes. It goes without saying, but the higher the score, the more affordable small business loans available. Plus, if you’re already in business, you need to check your business credit score through a reporting agency focussed on business, such as Experian, Equifax or Dun & Bradstreet.
In addition to these steps, you’ll also need to pull together all your documentation and your business plan. For further information about what you need to organize before you make your application, check out this article. Once you have all the relevant documentation, it’s time to start shopping around for the best small business loans for your company. We’ve pulled together a few suggestions for fast and easy small business loans below – some of which you might not have heard of before.
1. SBA Express Loan
God bless the Small Business Administration. Through an SBA-approved lender, business owners can access funds of up to $350,000 that are half guaranteed by the federal government. Furthermore, SBA Express Loans come with a speedy 36-hour response time and lighter paperwork requirements than banks that offer small business loans. As a result, an SBA Express Loan can be a good solution for a startup that might lack the credit history or collateral for a regular loan. Furthermore, the interest rate is capped and can’t exceed 4.5%–6.5% above the prime. You can use the funds for whatever you want and generally speaking, the repayment term is around ten years.
Depending on the lender, they may require you to provide collateral. For example, if you borrow between $25,000 and $350,000 the lender is likely to implement their regular collateral policy. Also, if you’re looking for super fast business funding, you might want to look elsewhere. Although the response time is fast, sometimes receiving the funds can be pretty slow – it can take up to 90 days for the funds to hit your account. That said, this is still faster than a traditional loan.
Here’s a quick breakdown of the other requirements:
• You must be fully registered and operate for profit.
• You have to be able to prove you are based in the U.S.
• SBA Express loans aren’t for starting a business – you must have been in operation for at least two years.
• The business must meet the SBA’s definition of a small business.
• You need to prove you need financing for qualified business purposes.
• You can’t have any delinquent government debt.
2. P2P financing
The P2P financing or peer-to-peer lending market is growing fast. This is mostly due to the fact that it cuts out the middleman, connecting borrowers with lenders direct using a notary business model. P2P programs are often split amongst several lenders, which is what enables them to offer less strict conditions, as the risk is distributed. Furthermore, the process is very straightforward compared to going to a bank as most P2P lenders conduct their application process entirely online.
However, there are a few caveats – many P2P companies will charge an origination fee. Generally, this ranges for 1–5%, depending on the borrower's risk grade. Furthermore, these loans tend to have higher interest rates and aren’t suitable for business who are looking to borrow more than $35,000. Therefore, P2P programs should be seen as short-term easy small business loans as opposed to a long-term cash flow solution. Each of these business financing companies will have their own conditions, so make sure you read the requirements carefully.
3. Revenue-based business funding
Next up in our run-down of fast and easy small business loans is revenue-based business funding. Although not technically a loan, these small business funding sources are a great way to get capital fast. For instance, the revenue-based business funding program offered by Fundomate has a fully-automated three-step online application process. Once approved, the capital will reach your account in one business day, or sometimes even less.
Moreover, these programs are a good option for applicants with lower credit scores. The minimum requirement is a FICO score of 480, but from there, we privilege your business performance over your credit history or tax returns. By using your business income over the last quarter as the deciding factor, we’re able to offer the most competitive and accessible funding.
Below is a rundown of the complete requirements:
• FICO credit score of at least 480
• Your business must have been operating for 3 months minimum
• You need to have a monthly revenue of at least $10,000
If you need a low interest, short-term small business loan, a microloan could be the answer. One of the reasons these business lending companies can offer such good deals is that they’re nonprofits. However, as you can imagine, this comes with some strings attached. Their aim is to offer business loan funding to disadvantaged communities, so you have to meet their conditions. For instance, LiftFund offers micro business funding in 13 states to companies who employ a large proportion of workers from low-income backgrounds.
To find out if your company qualifies, you need to identify an intermediary microlender in your state. The SBA operates several programs that run through nonprofits nationally, offering funding of up to $250,000, which is guaranteed by as much as 85%. Generally, the repayment term is up to 72 months, with the average repayment period sitting at around 40 months. You’ll also need to bear in mind these intermediaries will charge a fee of up to 7.75% on loans of over $10,000 and up to 8.5% for sums of less than $10,000.
5. Business line of credit
A business line of credit works a lot like a credit card. Basically, you can repeatedly use your funds without having to apply for a new loan every time. The obvious advantage here is the quick turnaround between approval to availability, which can be less than 24 hours. Furthermore, with a line of credit, your only charged interest on the funds you use, not the full amount. A line of credit is flexible in terms of how you spend the funds, so you can invest the money where you need it. In addition, programs with lower credit limits are generally unsecured, so you don’t need to provide any collateral.
Typically, a line of credit will range from $5,000 to $150,000. After the lender approves your application, they’ll set a maximum amount. You can access these funds for the whole term as long as you meet your monthly repayments and don’t exceed your limit. You can apply for a line of credit through a traditional financial institution or an online lender. Both come with their perks and downsides, but by and large, online lenders will have less stringent requirements but charge higher interest.
Furthermore, you need to demonstrate that you have a good credit history. Most lenders will require a score of at least 650 and a strong record on revenue. You’ll also need to provide comprehensive documentation, including personal and business tax returns, bank account details, and balance sheets.
Easy small business loans – take the hassle out of funding
Financing your small business doesn’t need to be a hassle – with the wide range of options out there, entrepreneurs have access to more funding sources than ever before. However, before applying for a small business loan or financing alternative, be sure to do your research. Although there are many ways you can get funding fast, it is important to put time and care into choosing a program that’s right for you and your business. Often, this might mean considering options other than a traditional loan. For instance, Fundomate offer a range of funding alternatives to suit every budget or background. Whatever your circumstances, there are a variety of easy small business loans that can help your enterprise thrive.