Consider one of these types of business loans if you need cash fast:
Short term loan
Short-term loans allow borrowers to access a lump sum of cash and then make monthly payments for a set repayment period. In general, short-term loans have repayment terms of between three and 18 months. Rates can range from 3% to over 50%, and interest begins to accrue on the entire loan balance as soon as 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 line of credit
A commercial line of credit allows borrowers to access funds based on their needs, up to an established borrowing limit. Rates are usually between 10% and 99%, and interest only accrues on the portion of the credit line to which the borrower has had access.
Borrowers can also pay down their balance and reuse their funds for the duration of the drawdown period, usually between 12 and 24 months. This means that a business line of credit can cover ongoing costs without having to pay interest on more money than is actually needed.
Merchant Cash Advance
A merchant cash advance (MCA) is a type of financing that businesses can use to quickly access cash without meeting traditional qualification and application requirements. Under this type of financing, a business owner receives a cash lump sum that is secured by a portion of future sales receipts.
Factor rates typically range from 1.2 to 1.5, which equates to annual percentage rates (APR) between 40% and 350%, which is much higher than many other forms of business financing. Loans are repaid from the company’s daily credit card sales or through daily or weekly automatic clearing house (ACH) payments.
For this reason, MCAs may be suitable for businesses with a high volume of sales to cover payments.
Invoice financing allows borrowers to secure a business loan with a portion of the business’s outstanding invoices, typically between 80% and 90%. The business 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 APRs ranging between 10% and 79%. Invoice financing can be expensive, but it gives businesses access to cash quickly 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 costs, purchase office supplies and equipment, and solve other day-to-day cash flow issues. APRs range from around 13% to 35%, but borrowers with excellent credit may qualify for a card with an introductory rate of 0%.
This type of funding can also come with almost immediate approval, and borrowers may be able to use the account before they receive a physical card.
Best Business Credit Cards 2022
Find the best business card for you and identify the factors important to your business