How Quickly Can You Get a Business Loan?
If it were 1975 and you wanted to start or expand your business with a business loan, your only feasible options would’ve been a bank. Why wouldn’t you want to go to a bank? They’re established, they’re trusted, and frankly, that’s what everyone did. Banks are the most traditional loan provider, and in some senses, they’re the gatekeepers. But the world is changing, and convenience is key. If you know what you need and need it quickly, a traditional bank loan isn’t going to be the best option.
If you don’t know where to go, getting the right funding can be a very, very long process. The internet changed everything, and in recent years it’s gotten much easier to get a business loan without going to a bank. This disruption of the industry is good for you, as a business, because now getting funded is a much easier process than in the past.
Not Your Grandfather’s Loans
For banks, time is not of the essence. They have long application processes that aren’t streamlined, and you often have to schedule meetings with a local branch to discuss your application and qualifications. Fundamentally, they’re slow. Getting a business loan with a bank takes anywhere from 14 to 21 days, so if you need to buy products as soon as possible, bank loans won’t cut it.
If you’re not really sure what’s best for your company, the process of getting a business loan will be even longer. If you’re purchasing equipment or goods that you need quickly – finding what you need to buy, figuring out how much it’s going to cost, and then getting the loan you need for it – this entire process could take days, even weeks. It’s our mission at FaaSfunds to figure out the type of funding you need, so you don’t need to wait around for your money.
If you don’t know about online lenders, you need to. They’re not just for mortgage loans or refinancing, they can also help you get a business loan. Online lenders take the place of a bank by way of giving you the money you need, but they specialize only on loans. Banks offer several different services, so they’re not as worried about securing your loan.
Online lenders like Clicklease or BlueVine have streamlined applications that you can connect straight to your business bank account and submit documents online. You often hear back on the same day you submit an application and can receive funds in about two to three days if you’re approved.
Whether you need to buy industrial equipment or you just need cash for general operation, there are certain types of loans from online lenders that will work better for specific needs. FaaSfunds will help you figure that out. If you need cash fast, however, you can get a working capital loan or take out a line of credit.
Working Capital Loans
Working capital loans do exactly what they say – they give you working capital. These “quick cash” loans often don’t require credit checks or waiting time. If you need cash quickly, this option will get you what you need usually within 24 hours. Working capital loans are good if you really, really need them – such as if you have an event approaching and you found out you’re short on funds to host it. If you know the event will bring in a large crowd and you can pay the quick-cash loan off with the funds earned from it, it can be a good idea.
Working capital loans are designed specifically for short term uses. If you have seasonal revenue or other such needs, they can be very useful. If you need a more long-term solution and won’t have the money needed to pay it back quickly, it’s not usually the best option. Working capital loans will loan you the money even if you don’t have good finances, but they usually require daily payments and have high interest rates. So, it’s best to use them as a last resort after you’ve really thought through your options. They do come in handy, they’re just not advised for many situations.
Lines of Credit
A more advisable option, although it requires a little bit of planning ahead, is a line of credit. You can get a line of credit at a traditional bank or at an online lender, but as we’ve talked about, online lenders will give you the quickest turnaround. Getting one is a little quicker than a traditional loan, and once you have it, you can save the funds to access at any time. Lines of credit, as their name implies, are credit lines with a set maximum very similar to a credit card. Your business will get a maximum, say around $30,000, and you draw from those funds for business expenses. They’re ideal because you only need to pay interest on the funds you use, and you only pay back what you use.
Lines of credit will take a little more information to get approved for, and better credit. They’re not as quick as working capital loans, but often lines of credit can be a quicker option because once you get one, the funds are open for use whenever you need them. Since you only pay interest on what you spend, they’re a more ideal option for emergency funds. If you’re able to plan ahead and take out a line of credit before you actually need the cash, you can use it when you get in a bind an avoid the high interest rates that come with working capital loans.
We know there’s a lot of options and information out there, and that’s why FaaSfunds offers advice for your financial questions and situations. Make sure you talk to your FaaSfunds financial advisor about lines of credit and working capital if you’re in need of quick funding. Our advisors will work with you to figure out the funding option that will fit your company.