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For small business owners, few things are as vital to success as a positive cash flow. Ideally, the business has enough money coming in to cover operational expenses or unexpected costs.
Unfortunately, that’s not always the case. Sometimes, seasonality may leave a significant dent in weekly or monthly revenue, making it impossible to meet regularly occurring requirements like payroll obligations. Or, an equipment malfunction may halt the sales you need to purchase a replacement or make repairs.
Finding the funds you need to keep your business running can be exasperating. The traditional small business loan may not be fast enough to meet your immediate financial needs. Other financing options, like borrowing or invoice payments, may not be an option. For many, the only remedy for this situation is a “fast business loan.”
Where do you go for a fast business loan? There are a variety of lenders that provide quick business loans, two of them are Kabbage and OnDeck.
On this page:
Compare Fast Business Loans
|Rates (APR)||7.00% – 69.00%||14.00% – 40.00%|
|Loan Amounts||$2,000 – $150,000||$5,000 – $500,000|
|Time to Funding After Approval||1 – 3 days||1 – 3 days|
|Origination Fees||1.50% – 10.00%||1.25% – 3.99%|
Fast Business Loans for Quick Cash
Though typically marketed as a business loan solution, Kabbage’s lending structure is actually more like a line of credit. Borrowers are approved for a specific amount of money but only to pull from those funds as they need. Borrowers repay 1/6 or 1/12 of the loan each month, depending on the loan’s term, plus an additional fee of 1.5% to 10%.
Kabbage financing provides between $2,000 and $150,000, and typically comes with a term of either six or 12 months. The application process can take a matter of minutes, and after approval, funds are typically available within 48 hours
To apply, you’ll need to have your personal information (contact, email, SSN, etc.), business information (name, address, industry, legal structure, revenue, etc.), and your business banking information.
For faster access to your approved funds, have your banking information on hand, including your bank’s routing number and your login credentials. The Kabbage application process requires either access to the accounts via online login, or physical copies of your business bank statement as well as a voided check, which you will need to send in.
OnDeck offers borrowers the opportunity to take out a single loan or access a line of credit. Like Kabbage, the online application process is quick. They state that it takes on 7.2 mins on average, with decisions made within minutes. Of course, like with many other lenders, it could take longer.
OnDeck business loans go up to $500,000, or you can take out a line of credit up to $100,000. That gives the borrower an additional option when compared with Kabbage’s line of credit. Term loans are available for three- to 36-month terms.
To apply, you’ll need to have your business information such as tax ID and address, your social security number, estimated annual gross revenue, and your average bank balance. In some cases, you will also need to submit your last three monthly business bank statements.
The loan processing typically takes 48 hours, and once complete, a specialist will contact you to further discuss your options. From there, funds are usually available within 24 to 48 hours.
To make sure you receive your business loans fast, make sure all your financial information is complete and be available to discuss your options once the loan specialist contacts you.
Though OnDeck and Kabbage provide some of the best fast business loans or line of credit options, there are many others, including LendingClub, Credibility Capital, and Street Shares. Many of these lenders have similar application processes and turn-around times – but shop around before committing.
Are There Faster Alternatives to Small Business Loans Out There?
What if you can’t qualify for fast business loans, or you need instant access to funds? Several options provide quicker access, but they typically come with a higher price.
Merchant Cash Advances (MCAs)
Like a loan, a merchant cash advance can provide quick cash when you need it the most. However, unlike a fast business loan, the borrower receives a lump sum up front in exchange for a percentage of future sales.
Repayment is fixed and typically occurs daily or weekly. It’s often based on credit and debit card sales. Unfortunately, with the hefty fees, borrowers can end up paying significant interest, up to triple digits, in some cases.
If you offer your customers extended payment options (for example, one to three months), and you need cash quick, you can work with an invoice financing company. They will typically lend up to 85% of the invoice value.
The amount you borrow is repaid monthly based on invoice repayment, plus an additional fee determined by the financing company. When financing invoices, the business remains in control of the accounts, and customers are unaware of the arrangement.
Invoice factoring is similar to invoice financing, but instead of maintaining control of the invoices, the business borrowing the funds sells the accounts to the invoice factoring company. This is typically a less equitable solution for businesses, but long-term contracts can cut costs.
Additionally, since the business is selling the invoice, all future collection efforts will be made on behalf of the financing company, meaning your clients and customers will no longer deal with you to pay the outstanding invoice.
Final Thoughts on Fast Business Loans
Owning a small business comes with plenty of perks, but sometimes owners struggle to meet financial obligations, both expected and not expected. If you don’t have time for a traditional bank loan, there are options available. Fast business loans can help you stay on track and provide you with the capital you need when you need it.
Author: Jeff Gitlen