Consider one of these types of business loans if you need money fast:
Short-term loans allow borrowers access to a lump sum of cash and then make monthly payments for a set repayment period. Short-term loans usually have terms of between three and 18 months. Interest rates can range from 3% to more than 50%, and interest begins accruing on the entire loan balance once the funds are disbursed.
As with some other same-day loans, the combination of short repayment terms and high interest rates can result in high monthly payments.
Business Credit Line
A commercial line of credit allows borrowers to access funds as needed, up to a specified credit limit. Interest rates typically range from 10% to 99%, and interest accrues only on the portion of the line of credit that the borrower has accessed.
Borrowers can also withdraw their balance and reuse their funds for the duration of the drawing period – typically between 12 and 24 months. This means that a business loan can cover running costs without having to pay more money than is actually needed.
Merchant cash advance
A Merchant Cash Advance (MCA) is a type of funding that businesses can use to access cash quickly without meeting traditional qualification and application requirements. With this type of financing, a business owner receives a lump sum of cash backed by a portion of future sales proceeds.
Factor rates generally range from 1.2 to 1.5, which equates to annual percentage rates (APRs) of between 40% and 350% – much higher than many other forms of business financing. Loans are repaid from the company’s daily credit card sales or via daily or weekly automatic clearing house (ACH) payments.
Because of this, MCAs can be a good fit for high-volume businesses to cover payments.
Invoice financing allows borrowers to secure a business loan with a portion of the company’s outstanding invoices – generally between 80% and 90%. The company remains responsible for collection, and when the customer pays the bill, the borrower repays the loan plus fees and interest.
Interest typically accrues at a rate of 1% to 3% per month, with annual percentage rates ranging from 10% to 79%. Invoice financing can be expensive, but gives businesses quick access to cash and without meeting traditional qualification requirements.
business credit cards
Business credit cards give businesses access to a revolving line of credit that can be used to cover operating expenses, purchase office supplies and equipment, and deal with other day-to-day liquidity problems. The APR ranges from about 13% to 35%, but borrowers with excellent credit can qualify for a card with a 0% introductory rate.
This type of funding can also be approved almost instantly, and borrowers may be able to use the account before receiving a physical card.
The best business credit cards of 2022
Find the best business card for you and identify what factors are important to your business