Something has come up that you would like to take care of it. Maybe it’s an investment opportunity or a broken piece of equipment. In any case, you want to act quickly, but what if you don’t have the capital to cover it?
Procuring a loan can be a lengthy process. It can take weeks, even months, to get approved for a loan through a big bank. As we know, businesses don’t usually have much time on their hands to wait around for a loan approval. If your business needs capital for something impromptu and time-sensitive, it’s critical that you’re able to secure funding as soon as possible. Fortunately, private lenders can offer quick and reasonable loans to businesses in situations like these.
Can alternative lenders provide funding quicker than traditional lenders?
In short, yes. Alternative lenders are able to offer these quick funding options for various reasons. They boast faster application and approval processes than banks and other traditional lenders. There’s usually less paperwork involved for the applicant, which means you don’t have to spend as much time collecting documents that you might not already have. Also, alternative lenders offer tools on their websites and mobile applications which make it fast and easy to browse options, get quotes and even apply. The underwriting process at most private lending firms is efficient and enables quick communication between underwriters and lending specialists. This allows businesses to receive a decision on their application in a shorter amount of time.
It should be noted that, while you get quick funding with these options, there can be some monetary tradeoff. So, it’s important to consider this before applying for a quick business loan. That being said, many lenders provide quick funding options while also being willing to customize a business’s plan, especially if they have good credit.
Types of Quick Business Financing
Business Line of Credit
This is a form of short-term lending and one of several that we’ll cover in this article. A business line of credit is a revolving line of credit that one can draw against whenever you need it. It's usually used for short-term working capital to help improve cash flow or to finance the costs of surprise expenses. A small business line of credit is also revolving. Also, you repay only the amount you withdrew, with interest. Business lines of credit are available on an as-needed basis, so you can use it to handle gaps in cash flow, get more working capital, or address almost any other emergency or opportunity. Overall, it’s a flexible, quick solution to capital shortages that businesses need to cover promptly.
Merchant Cash Advance
Sometimes, businesses need fast cash. Going through the process of procuring a traditional loan can often take a long time and the requirements can be inhibitory. In these cases, merchant cash advances (MCA’s) can come in handy.
As we’ve mentioned before, an MCA isn’t technically a loan; it’s an advance. With this funding option, the lender advances your business’s future credit and debit card revenues that you will repay in a predetermined daily percentage of your business’s credit and debit card revenues. In a nutshell, you will receive an upfront sum of cash in exchange for a percentage of your future sales. If you need funding quick, this is an excellent option to consider, as it’s one of the easiest and quickest types of loans to acquire.
Invoice financing is a convenient, accessible option for most businesses. This form of funding allows businesses to borrow money against the amounts due from its customers. The business lender can advance your company up to 90 percent of an outstanding invoice’s value. The catch is that the lender will not lend you this cash advance for free. For every week that the invoice is outstanding, the lender will charge you interest. Invoice financing is a self-secured form of business funding, so the qualifications aren’t rigorous. That, among other reasons previously discussed, is why invoice financing is a quick business loan.
Equipment is essential for every single business. Everything from software to heavy machinery allows the gears of the business to turn. However, some pieces of equipment can be quite expensive. Making these significant expenditures can cost your business valuable working capital. Fortunately, there are equipment loans. Otherwise referred to as equipment financing, these types of loans are a way for your business to get the equipment it needs while avoiding significant upfront expenses. They’re also some of the most common loans, and qualifying is both quicker and easier than you might think.
Most business loans require a borrower to have an asset of value to be used as collateral to secure the loan. With equipment loans, the equipment itself is used as collateral, so in most cases, the borrower is not required to provide anything else. This lends itself to a quicker and more simplified application process. Your business’s credit score is a lesser factor; therefore, lenders are virtually just as likely to approve a younger company as they would be to approve an older one with more experience. Fortunately, the paperwork involved in the equipment loan application and approval processes is minimal, so your business can get the equipment it needs fast.
Equipment financing allows you to own the equipment at the end of the term; however, with equipment leasing, you make monthly payments for the ability to use the equipment for a limited amount of time. This set amount of time makes leasing a more cost-effective option for equipment that you only need to borrow temporarily, and although not technically a loan, makes it another good choice for quick financing.
Unsecured Working Capital
Unsecured working capital helps businesses with their daily costs. Sometimes, businesses experience a lapse in working capital which affects their ability to maintain day-to-day operations. Unsecured working capital is a method of financing that can keep things running. It is a loan that can be provided rather quickly by private lenders. Once you receive your funding, it leaves you free to do what you’d really like to be doing, running your business.
All of the previously mentioned forms of business financing are great options for quickly acquiring funding for your business. It’s important to note that you will have to pay slightly more for some of these funding options as a trade off for getting your financing faster. That being said, private lenders can provide custom, flexible options for each client. In addition to this, private lenders are not bound by the longer and more painstaking application and approval processes like those of traditional lenders. Private lenders also have the advantage of having online applications through websites and apps, in addition to phone applications and less paperwork to complete. Many boast a streamlined underwriting process so that qualified businesses can be approved fast.
Crestmont Capital offers all of the aforementioned quick funding options, plus many more. Our application process is simple, and we can have funding for our clients in as little as a day. If you are interested in acquiring a loan with us, or just learning more, feel free to fill out a quick quote or contact us today!