Key takeaways

  • Fast business loans can potentially be approved and funded within 24 hours
  • Several types of fast business loans exist, including term loans, equipment financing, invoice factoring and business lines of credit
  • Both online and traditional lenders offer fast business loans

If you’re thinking about getting a small business loan, it helps to be prepared. To apply and get approved for one can take time and research. And finding the right option for your business depends on a number of factors, like how fast you want to receive funds.

It is not unheard of for small business loans from traditional lenders, like banks and credit unions, to take weeks or months to be approved and funded.

But fast business loans could offer funding in as little as 24 hours. Read on to learn how to secure fast funding for your small business.

What is a fast business loan?

A fast business loan is a type of financing designed to provide quick access to capital for businesses facing urgent financial needs or opportunities. These loans are typically obtained from online lenders or financial technology companies, with streamlined application processes and rapid approval times of one to three business days.

How do you get a quick business loan?

Fast business loans are accessible to businesses with varying credit profiles, but prior to submitting the loan application, there are a few steps businesses can take to improve their odds of approval.

1. Know how much you can afford

To determine borrowing eligibility, lenders take into account annual revenue, business plan, collateral, loan type and intended use.

They also assess affordability using your debt service coverage ratio (DSCR), which compares your yearly revenue to annual debt repayments, including both loan principal and interest. Your debt-to-income ratio (DTI) is also considered, which compares monthly debt repayments to monthly gross revenue. Note that a DSCR of 1.25 and up and a DTI of 36 percent or lower are ideal if you want to get approved for a loan.

Since loans from online lenders can be expensive and repayment periods shorter, it’s important to know what you can afford before signing a loan agreement.

2. Find the type of fast business loan you need

Some types of business loans offer much faster funds than other types. While some traditional banks and credit unions may offer quick financing, fast business loans are usually found with alternative lenders. Here’s a look at a few common types of fast business loans and their advantages and disadvantages.

Online term loans

Online lenders often focus on fast funding more than larger, traditional banks can. For example, Credibly business loans can be approved in as little as four hours, with funds possibly arriving in less than 24 hours. Another benefit is that these lenders are often more accessible to a broad range of borrowers, even business owners looking for bad credit business loans.

A potential drawback is that faster online funding may come in smaller amounts. Additionally, many online term loans marketed as fast tend to be short-term, with max terms of 24 months. Certain lenders may offer extended terms with faster processing compared to traditional banks, but these loans also tend to have higher interest rates.

Lender Loan type Funding speed Loan amount
Credibly Working capital 1 business day $5,000 to $400,000
Bluevine Line of credit 1 business day Up to $250,000
Fora Financial Term loans 1 business day $5,000 to $1.4 million
OnDeck Term loan 1 business day $5,000 to $250,000
Triton Capital Equipment loan 1 business day $10,000 to $500,000
SMB Compass Line of credit 1 business day $25,000 to $5 million
Funding Circle Term loan 2 business days $25,000 to $500,000
QuickBridge Working capital 1 business day $10,000 to $500,000
Lendzi Line of credit 1 business day $5,000 to $5 million
Creditfy Equipment loan 1 business day $10,000 to $10 million

Business lines of credit

Business lines of credit offer flexible credit that you can borrow up to a certain amount and only pay interest on what you use. Online lenders tend to offer fast approval and funding time and have relaxed requirements like lower credit scores.

A potential drawback is that lines of credit tend to have smaller loan amounts and shorter payback periods. With a term loan, you pay back the lump sum you borrowed over the course of the term, often up to 24 months. Repayment terms for lines of credit, especially with online lenders, might run as short as six, 12 or 18 months.

Invoice financing and invoice factoring

With invoice factoring, you sell your invoices to a factoring company and receive a percentage of the invoice upfront right away. On the other hand, invoice financing allows you to borrow directly against unpaid invoices.

Both of these have the potential to be good short-term options when you need fast funding that can be paid back quickly. And since invoice financing and factoring lenders are more concerned with the payment history of invoiced clients, they’re considered a type of bad credit business loan open to startup businesses and business owners with poor credit.

The downside to invoice financing and factoring is that you lose out on getting the full value of your invoices since you’ll have to pay fees.

Equipment financing

Equipment financing typically can only be used to purchase equipment, such as office equipment or semi trucks. Many lenders won’t require you to put up anything you already own as collateral for this type of loan since the equipment you purchase secures the loan.

Depending on the lender, you may be able to secure financing within days compared to weeks with traditional lenders.

Merchant cash advances

A merchant cash advance (MCA) allows you to borrow against future debit or credit card sales. You can find this option through online lenders as well, with one-day applications and funds available in as little as 48 hours in some cases. It can open up quicker and more stable cash flow for business expenses.

The biggest drawbacks of MCAs are the high interest rates and often short repayment periods. Lenders may charge factor rates for this type of financing. Not only does this make it harder to understand the true cost of the loan, but rates can soar upwards of 80 percent and higher.

Bankrate insight
The 2023 Small Business Credit Survey by the Federal Reserve Banks found that merchant cash advances made up 8 percent of financing applications submitted by employer firms. Of those who applied, 35 percent were fully approved, and 47 percent were partially approved.

3. Find the right lender

Once you decide how much you want to borrow and the type of loan that works for you, it’s time to find a lender. You can look at our list of the best fast business loans, search for yourself or ask around in your industry.

Next, compare any listed eligibility requirements. Lenders often list how much time you need to be in business, annual revenue requirements and minimum credit scores.

Also, assess approval times and funding speeds. Online lenders especially tend to list how long the application process takes and how long funds take to hit your business bank account.

4. Compare rates and terms

Moving forward with a fast business loan without comparing rates, terms and fees from lenders isn’t wise. Pay close attention to the following as you shop around:

  • APR: Represents the annual percentage rate for interest. APR is calculated as the overall loan cost, including interest and fees.
  • Factor rates: Common for loans like merchant cash advances, these rates are expressed as decimals.
  • Loan amount: Most lenders specify maximum amounts, though the amount you qualify for may vary.
  • Penalty fees: Review loan agreements for charges related to missed payments or early repayment.
  • Repayment terms: These loans tend to have shorter repayment terms, so ensure you understand the loan duration and payment frequency. Repayments are often daily, weekly or monthly.

Alternatives to fast business loans

If you aren’t sure a fast business loan is a good fit, or you don’t need funds urgently, consider these alternatives:

  • Business credit cards: This funding option provides on-demand access to funds when through a pre-determined credit. Though approval may take longer than a day, it offers perks like rewards programs and expense tracking.
  • Business loans: Instead of an online fast business loan, you could consider a more traditional small business loan from a bank.
  • Crowdfunding: Approval times vary, but with access to a broad pool of potential investors, you can build customer engagement for your business and possibly avoid having to repay the funds you receive.
  • Business grants: Grants offer free capital with no repayment required; however, they are competitive and may require a lengthy, in-depth application process.
  • SBA loans: SBA loans offer favorable rates and terms but have an extended wait for funds, typically 30 to 90 days.
  • Bootstrapping: You have the option to self-fund your company through personal savings in its initial stages, later reinvesting customer revenue and eventually seeking a loan for further growth, though this process doesn’t guarantee swift funding from lenders.
  • Peer-to-peer lending: Peer-to-peer lending offers flexibility to businesses unable to qualify for traditional funding. However, investors may not readily fund your loan or do so promptly, potentially prolonging the process compared to other financing options.
  • Microloans: Microloans range from a few thousand dollars to $50,000, offering reasonable approval times, low interest rates and flexible repayment terms.

Bottom line

Fast business loans offer speedy access to capital, making them appealing if business owners need financial assistance to seize opportunities or address emergencies. While lending requirements are lenient, when considering a fast business loan, it’s important to carefully review your loan options to ensure alignment with financial needs, qualifications and long-term goals.

Frequently asked questions

  • Plenty of online lending options advertise that you can get approved in minutes and receive funds within hours if you qualify. Other options may take up to days to approve, and you may see funds within 48 hours. These options are preferable for some business owners since traditional lenders may take weeks to approve a business loan.
  • The easiest business loan to get can depend on your background and what you are looking for in a loan. Most business loans can be easy to get if you have excellent credit, have been in business for years and have high annual revenue. Other loan types, like equipment financing, invoice factoring and merchant cash advances, may be your best option if you have bad credit or a new business. SBA microloans are also an option for business owners with poor credit and startups.
  • The SBA Express and Export Express loans are considered some of the fastest SBA loans. These allow lenders to process and close SBA loans without SBA approval, which can speed up the approval and funding timeline.