If you need funding for your small business, several options are available, including fast business loans. These loans provide streamlined online applications along with fast approvals and funding. You may even be able to receive funds in as little as a day.

Fast business loans vary by lender and loan type. To find the right one for you, follow these steps when applying for a fast business loan.

Decide on the type of fast business loan

Fast business loans typically come from online lenders that specialize in offering quick decisions and funding. On the other hand, traditional loans from banks and credit unions can take days and weeks to get approved and receive funding.

Common types of fast business loans include:

  • Online term loans. These are lump sums of cash that are available through online lenders. You typically pay it back in equal monthly installments over a period of one to seven years.
  • SBA loans. These are backed by the Small Business Administration and come with affordable rates and terms. They are not the fastest loans around: Most SBA loans can take anywhere from 30 to 90 days to fund. But an SBA Express loan and an SBA Preferred Lender can speed up the process.
  • Lines of credit. You can withdraw funds from a revolving line of credit as needed during a preset draw period. Like a credit card, business lines of credit reset as you pay down the balance, and you only pay interest on the funds you use.
  • Merchant cash advances. The loan amount is determined by your credit card sales volume, and you’ll pay a factor rate instead of interest. Merchant cash advances come with short terms and may have incredibly high interest rates, but may be ideal for credit-challenged small business owners.
  • Invoice factoring and financing. You can borrow against unpaid invoices through invoice factoring and financing. These may also come with steep factor rates but could be an option if you need funds and can’t wait for clients to pay their invoices.
  • Equipment financing. These loans can only be used to purchase business equipment like office supplies, heavy machinery and semi trucks.

Figure out how much loan you can afford

Most lenders provide funding between 10 percent and 30 percent of your annual revenue. This limit helps ensure your company doesn’t get overextended by the loan payments, which could cause you to default on a loan.

Before you get a fast business loan, make sure you can afford the monthly payments, which will also include fees and interest rate. To help, use a business loan calculator to determine how much of a business loan you can afford.

Compare fast business loan lenders

The best fast business loans offer competitive interest rates, loan terms and minimal fees. A streamlined application process is also ideal, and the funding timeline should work for your company’s needs.

To find the right loan for your business, you’ll have to consider the lender and its eligibility guidelines. You’ll need to ensure your credit score, time in business and annual revenue match the lender’s requirements.

If you have bad credit, very little revenue or are just starting out in business, your options may be limited, but it’s still possible to find a lender offering a fast business loan. Just beware of any red flags, such as promises that seem too good to be true.

Gather required documents and information

When you apply for a fast business loan, you’ll need to provide information and documents. It helps to gather it all before applying to speed up the underwriting process. If you don’t have any of the requested material on hand, it will delay the process and keep you from getting the funds you need in the fastest time possible.

Here’s what you’ll generally need to apply for a fast business loan:

  • Intended loan use
  • Company name and fictitious name filing documents (if applicable)
  • Federal employer identification number (FEIN) or business tax ID
  • Business registration and license (if applicable)
  • Articles of incorporation (if applicable)
  • Most recent company bank statements
  • Most recent personal and business tax returns
  • Balance sheet, profit and loss statement, and financial projections
  • List of accounts receivable and accounts payable
  • List of current business debt (including other financial obligations)
  • Commercial insurance policy documents
  • Commercial lease agreement (if applicable)
  • Payroll records

Apply for a fast business loan

Once you have a shortlist of lenders, get prequalified if possible. Some lenders offer an online tool that will let you view potential loan offers and rates without impacting your credit score.

The next step is to formally apply for a fast business loan. Be sure to complete all parts of the application and review your entries for errors that could result in an accidental denial. Also, upload the requested documents when you apply to avoid processing delays.

If approved, read the entire loan agreement carefully, review the terms and ask the lender any questions you may have before signing on the dotted line. After that, you just need to wait for the funds to reach your account.

Bottom line

Fast business loans can be a good option for business owners that need immediate funds. But take time to understand the process and loan options before moving forward. Also, evaluate several lenders to find those offering funding opportunities that work best for your company.

Frequently asked questions

  • Some lenders will approve you for a fast business loan with a credit score as low as 500. But the borrowing costs will likely be steep, and you’ll also need to meet the lender’s other eligibility guidelines, including the minimum time in business and annual revenue thresholds (if applicable).
  • Fast business loans are typically offered by online lenders. You may find banks and credit unions providing small business loans with short funding times. Still, they may not be as lenient as alternative lenders.
  • Most lenders prefer businesses that have been established for at least 12 to 24 months. That said, some online lenders offer funding options to companies that have been operating for at least six months or are just starting out.