Fast business loans are loans that provide quick approval and funding. Depending on the lender and its requirements, fast business loans can often provide funds within five days, while traditional business loans can take weeks or months to receive funding.

Business owners may consider a fast small business loan if they need to jump on a growth opportunity, are at risk of losing their business or have unexpected expenses. Understanding the different types of fast business loans, the pros and cons, where to get them and the eligibility requirements can help you determine which quick loan is best for your business.

Types of fast business loans

Type of fast business loan Description Best for
Term loans (unsecured / secured) A term loan typically has a fixed interest rate with equal monthly payments payable from one to five years. A secured term loan requires collateral, a business asset such as real estate, that the lender can seize if the business fails to make payments. An unsecured term loan doesn’t require collateral. Operational needs, inventory and specific purchases or projects.
Lines of credit Similar to a business credit card or revolving debt. The lender approves a lump sum amount, which the business can draw from when they need funds. As the amount is repaid, the line of credit replenishes and can be used again. The business only pays interest on the amount they use. Emergency funds, operational needs or any other need for credit.
Equipment financing A term loan that helps businesses purchase the equipment they need. Lender requirements can vary and may require a down payment, but offers equal monthly payments that include principal and interest. Available for business purchases of large-scale equipment like trucks and machinery. Some businesses may be eligible for loans larger than the equipment purchase price for soft costs, such as delivery, equipment and installation fees.
Invoice factoring and financing While invoice financing uses outstanding client invoices as collateral for businesses needing fast funding, invoice factoring is the selling of invoices to a factoring company, which then pays out a percentage of the invoice. After the client pays the invoice to the factoring company, the company provides the remaining funds minus any fees. Seasonal expenses and working cash flow.
Merchant cash advance A merchant cash advance (MCA) uses future credit and debit sales as collateral for a lump sum. The lender then recoups their money by taking a percentage of the daily or weekly card sales, plus fees. This option can be the most expensive as it comes with high fees and interest rates, and loan amounts can be low, depending on the business card sales amount. Emergency or seasonal expenses and cash gaps.

Pros and cons of fast business loans

Before deciding between a fast or a regular business loan, weigh the pros and cons of fast business loans.

Pros

  • Provides fast funding for emergency expenses
  • Subprime borrowers are eligible
  • Speedy application process
  • Fast funding

Cons

  • Borrowing amounts may be low
  • Fees and interest rates can be high
  • Full repayment is usually required within 24 months or less
  • Personal or business asset seizure can occur from defaulting

Where to get a fast business loan

If you need to get business loans fast, multiple options are available. Traditional lenders, like Bank of America, offer term loans and lines of credit but have stricter eligibility requirements. You may also be eligible for SBA Express Loans if your business meets the qualifications.

There are also online lenders with a wide range of eligibility guidelines that offer fast business loans. Triton Capital, for example, offers fast equipment loans, while Bluevine may be a good fit for an unsecured business line of credit. Business owners needing large loans for working capital expenses may consider direct lender Fora Financial.

Determining your fast funding needs and whether you can provide capital along with reviewing multiple lenders can help you find the best fast business loan.

Requirements for a fast business loan

Being prepared can help you get small business loans fast. To ensure the application process goes smoothly, make sure you understand how to apply for a fast business loan.

1. Determine how much you can afford to borrow

Determining your borrowing limits can help minimize the risk of defaulting on loan payments. Many lenders use your annual revenue to determine what you can afford, usually between 10 percent and 30 percent of your business’s revenue.

A business loan calculator can help you determine which loan amount, including interest and fees, best fits your budget.

2. Decide which type of loan is best

There are several types of fast business loans to choose from. Banks, credit unions and online lenders offer loans with various requirements and approval and funding timelines. After determining how much you can afford, compare lending types to decide which works best.

3. Compare lenders

Once you determine your loan type and budget, it’s time to compare lenders. Besides loan type, look at the lenders’:

  • Eligibility requirements
  • Application process
  • Funding timeline
  • Interest rate and fees

Online lenders typically have more flexible guidelines and can be better for businesses with bad credit or startups. While some lenders may not require collateral, you might have to provide a personal guarantee, which means the company can come after your personal assets if you default on the loan.

4. Gather your documents

The documents you need to qualify for a fast business loan depend on the lender and type of loan you choose. Verifying lender requirements and having everything ready before you apply can speed up the application process, which means you’ll get faster funding.

Although documentation can vary, lenders may require the following:

  • A photo ID
  • Business owner’s Social Security number
  • Proof of personal and business address
  • Employer identification number (EIN)
  • Business formation documents
  • Business plan
  • Bank account statements
  • Tax returns
  • Financial forecasts
  • Profit and loss (P&L) statement
  • Proof collateral or a personal guarantee
  • Insurance and lease documents

5. Apply for a fast small business loan

Applying is the last step to receiving a fast small business loan. Be sure to fill out the entire application correctly to avoid denial. Uploading all the documents the lender requires with the application can also help prevent delays in processing.

If you are approved, carefully read the loan agreement in full and review the loan terms, asking any questions of the lender before signing and submitting the completed contract. Once done, the lender will release funds according to its timeline.

Alternatives to fast business loans

If you don’t require fast funding, you may want to consider alternatives to fast business loans. These alternative options may be better suited for your business, sometimes offering more favorable terms, lower interest rates or extended repayment periods.

Alternatives to fast business loans include:

  • Traditional loans: Although they often have more robust eligibility guidelines, they usually come with more flexible repayment terms and better interest rates. Banks and credit unions can generally offer higher loan amounts than fast business lenders.
  • Business credit cards: Business credit cards can be ideal for day-to-day purchases. If you diligently pay the balance in full, there is no interest to pay. Other perks could include 0 percent APR periods and cash back or points rewards.
  • SBA loan: The Small Business Administration offers loans through credit unions, online lenders and banks, but must meet SBA guidelines to qualify. While funding can take up to 90 days, terms are usually the most favorable compared to other alternatives with multiple loan types.
  • Microloan: A microloan usually comes from local governments, the SBA or community groups for funding up to $50,000. Terms can vary but often have long repayment periods and lower interest rates than other alternatives.

Frequently asked questions about fast business loans

  • The quickest way to get a business loan is to use a fast short-term lender. To get small business loans fast, determine which type of loan best meets your financing needs and what documents you need to qualify. Then compare rates and terms to determine which lender is the best choice. Have everything ready when you apply so you can complete the application fast and get approved quickly.

  • It’s possible to receive funding for a fast business loan within one to five days, depending on your capital needs, eligibility and lender choice. Some online lenders could even fund a fast small business loan the same day. Comparing lenders, terms and funding timelines can help you determine which lender will offer the quickest funding.

  • The easiest loan to be approved for depends on the loan type and funding needs. Established businesses with good business credit scores have a better chance of approval for different kinds of loans than those with bad credit scores or newer businesses. Reviewing all your options before applying for a loan can ensure you find the correct financing for your needs, making the application and approval process easier.