How To Secure a Quick Loan for Your Business

Did you know that 48% of small businesses in the United States don’t have enough financing to meet their needs, and 70% of businesses have outstanding debt?

As a result, many businesses look at a quick loan to take care of equipment costs or to cover cash flow gaps. If you’re looking to secure a quick loan for your business, the process can be overwhelming.

The good news is that preparing ahead of time by educating yourself on the specifics of securing a quick loan will make the process much more efficient. 

In this guide, you’ll learn everything you need to know about securing a quick loan for your business!

Overview of Quick Loans for Businesses

Your first step to securing a quick loan is understanding more about online quick loans.

A quick loan for a business is a specific type of financing where you can receive funds within 1 to 3 business days. Quick loans are usually offered by non-bank lenders, also known as alternative lenders.

Quick loans also have a simple and efficient application process. This is because online loans have speed and convenience that traditional bank loans don’t have.

Quick loans also typically offer more flexible qualification requirements. They’re an excellent alternative for people with bad credit or working with business startups.

Types of Business Quick Loans

You can use different types of quick loans to fund your business, so it’s essential to be familiar with your options. The most common options include the following:

Business Lines of Credit

A business line of credit is a set limit of funds you can draw from when you need to. You’ll only pay interest on the money you actually borrow. You’ll repay these funds over a specific time period, usually on a weekly or monthly payment schedule.

Business Term Loans

Business term loans give you a lump sum of cash that you’ll have to repay with interest over a fixed period. You’ll find some lenders offer short-term loans where you’ll have to pay the loan back within 12 months, while other lenders have longer repayment terms.

Business term loans are a good choice if you need a loan for long-term growth or a significant investment since you have more time to pay it back.

Equipment Financing

Equipment financing is a small business loan intended specifically for people who need to finance business equipment or machinery.

Usually, equipment loans are more structured and based on how long the equipment you want to buy should last. For equipment financing, the equipment you purchase services as loan collateral.

As a result, you won’t need as much of a financial history or a high credit score to qualify.

Personal Loans

You can also use a personal loan to fund your business needs. Many people turn to personal loans to fund startup costs for a new business.

Personal loans are a good option if your business is brand new and won’t qualify for a traditional business loan. Unsecured personal quick loans are usually easier to qualify for than a business loan since your business doesn’t need to meet any specific requirements.

If you have a good credit score and income source, you’ll be able to find personal loans with lower interest rates. You’ll also get funding on the same business day or within a few days after you apply. 

Remember that personal loans allow people to borrow less than business loans, typically up to $50,000. Also, if you don’t repay a personal loan, it will affect your credit, making it difficult to obtain financing for your business in the future.

When Should You Get a Quick Business Loan?

A quick business loan is a good option if you need money to cover emergency costs. Quick business loans are also helpful if you need cash flow quickly or have an unexpected business opportunity. 

Many business owners also turn to business loans to cover advertising fees for a marketing campaign or to hire new employees to grow their businesses.

Finally, quick loans are a good option for financing if you don’t qualify for a Small Business Administration loan or a bank loan. 

How Do You Choose the Right Quick Loan for Your Business?

Determining your funding needs and business qualifications is your next step in securing funding. You’ll also need to research and compare lenders, loan terms, and interest rates. This way, you’ll be able to apply for quick loans you’ll most likely qualify for.

Get an Understanding of Your Financing Needs

First, you’ll need to figure out how much capital you’ll need, how you’ll use it, and what loan is your best option. Remember, fast loans typically have shorter repayment terms, so you’ll need to budget to be sure you can afford the payments.

Evaluate Your Business and Personal Qualifications

Next, you’ll need to get an idea of your personal credit score, so you know where your credit stands before you apply. A good credit score typically ranges from 661 to 780. However, if you have a score of 700 or more, you won’t have a problem qualifying for a loan.

If your credit score is lower, it’s best to improve it as much as possible before applying. The first step to doing this is to ensure you’re paying all your debts on time every month and at least making the minimum payments.

Research Lenders

It’s best to make a list of between 3 to 5 lenders so you can compare funding options, costs, and loan terms. Don’t forget to also compare fees and monthly payment amounts. You can learn more here about comparing loan terms and rates to get the best loan for your needs.

Ideally, you’ll want to find lenders that offer competitive interest rates and can provide the funding and timeline you need.

Make columns to include information, such as:

• Repayment terms
• Fees
• Interest rates
• Loan types
• Qualifying credit score and other requirements
• The length of time it takes to get the funds

Reading online reviews for each lender you’re considering is also essential. Be sure to focus on customer support reviews and how straightforward the application process is. You’ll also need to be careful of lenders that promise guaranteed approval or that pressure you during the loan process.

Applying for a Business Quick Loan

Once you’ve compared lenders and narrowed your list to your top three choices, you’ll need to work on the application process.

Before you apply, you’ll need to understand how applying for loans can affect your credit.

You’ll also need to be familiar with the documents you’ll need for your loan application. Having this information available allows for a smooth application process all around.

Loan Applications and Your Credit Score

While you can apply for multiple loans at once, it’s important to understand the impact it can have on your credit score. This is because credit inquiries can hurt your credit score, which affects your ability to apply for loans in the future.

Typically when you apply for a loan, the company will do what’s known as a hard check on your credit. On the other hand, soft inquiries result from you checking your credit or a company pre-approving a credit card offer for you. Also, if you’re applying for mortgage loans, they’ll typically make a soft inquiry to pre-approve you for a specific amount.

Hard inquiries can impact your credit score long-term, while soft inquiries don’t affect your credit. The good news is hard inquiries won’t affect your credit score for at least 30 days since many people need to apply for multiple loans while rate shopping.

In addition, after 30 days, your applications within that specific period are usually treated as one inquiry on your credit report.

Get Your Application Documents 

Each lender has a different type of application for the quick loan process. The initial online application is typically basic, asking for information like your name, address, and date of birth. 

However, many lenders will require you to provide additional information.

Depending on the type of loan you’re applying for, you’ll need to ensure you have the documentation you need. These documents typically include the following:

Business Loans

For a business loan, you’ll need documents that have information about your business. These documents include the business’s name, address, and tax ID. Lenders might also require a proposal or business plan outlining how you plan to use the loan.

Next, you’ll need financial statements for your business and yourself. This includes documentation that shows your total annual revenue and profit and loss statements. Tax returns and bank account statements for yourself and your company may also be necessary.

Lenders will also require personal details like your name and social security number. They’ll also need to know the name of your business and the details of anyone else that owns a specific percentage of your company.

Finally, many lenders will require a personal guarantee. A personal guarantee is a type of agreement you sign that states you’ll pay back the loan with personal assets if your business runs into financial trouble.

Even though quick loans have fewer requirements, checking the SBA loan application requirements is best. Doing this allows you to be prepared for any business loan.

Personal Loans

You must also provide certain documents to get approved for a personal loan. You’ll need to verify your identity, that you’re at least 18, and a US citizen or a permanent resident. Lenders might also require confirmation that you have a valid bank account. 

Typically you’ll need two forms of identification, which can include:

• Driver’s license
• Birth certificate
• Passport
• Military ID
• Social security card
• State-issued ID card

For quick online loans, you’ll be able to scan the two forms of ID, make copies, or take pictures to upload. 

There are different types of personal loans you can apply for. If you’re applying for an unsecured personal loan, you won’t need any collateral to back the loan. As a result, this will increase the risk for the lender, so you’ll be asked to verify you have a steady income source.

If you own your own business, you’ll need to supply documents like bank statements, 1099s, and income tax returns to verify your income.

In addition, lenders need proof of address to verify that you have a stable home or rental property. You’ll need a lease or rental agreement, a mortgage statement, or a utility bill. Most lenders will also accept bank statements or property tax receipts.

Other Information

For both business and personal loans, lenders may ask you about the purpose of your loan. This is because some lenders offer loans for specific reasons, like debt consolidation.

You might also need to provide an itemized list of your monthly expenses. These expenses include rent or mortgage payments, credit card payments, and other loan payments.

What to Do if You Don’t Get Approved

If you don’t get approved for a quick loan, there are some options to consider.

First, you can get a cosigner for the loan. This may be the best step to take if you have a trustworthy family member or friend with good credit. Cosigners need to have good or excellent credit and provide the same documents as you do during the loan application.

You can also choose to apply for a secured personal loan. Unlike unsecured personal loans, secured personal loans require collateral like your home or a vehicle you own outright.

The good news is that secured personal loans are often easier to qualify for since the collateral reduces the lender’s risk. The bad news is if you don’t pay the loan back, the lender can seize your collateral.

So, analyze your budget carefully to ensure you can make your loan payments if you choose a secured personal loan.

Apply for a Quick Loan Today

Now that you know more about securing a quick loan, you’ll know exactly what to expect during the process. Following these tips will help you successfully secure the financing you need for your business.

If you’re looking for reliable online loan options, you can turn to FastLoanDirect for all your personal loan needs. All you need to do is fill out a form to receive offers from a variety of lenders. You can find loans up to $35,000 with interest rates that start at 5.99%.

In most cases, once approved, the funds will be deposited into your account the next business day. Make sure to visit FastLoanDirect today to start the process!