Business loans

How to get an instant business loan

If your business runs into a sudden cash flow roadblock, you may need cash quickly from instant business loans.

Not next week, not when your bank has gone through its multi-stage approval process. Instantly. Or you won’t be able to pay your bills.

So how can you ensure that you get finance fast?

What’s the first step towards fast finance?

The first thing you need to do is approach the right kind of financial institution.

There’s no point in talking to a bank, as there will be plenty of time-consuming due diligence before they reach a decision. They’ll want to see your articles of incorporation, balance sheet, three years’ profit and loss statements, three years’ tax returns, and maybe even a business plan.

You could take days to get all this documentation together, after which the bank will take weeks to reach a decision.

Alternative lenders, however, have quite difference acceptance criteria and a much more streamlined decision-making process. Relying more on algorithms and technology than detailed scrutiny of documents, they will leap into action when you make your online application for an instant business loan and could reach a decision within minutes – or even seconds.

What can you use your emergency loan for?

This type of lending is obviously unsuitable to finance long-term growth – you’d be much wiser to shop around and take your time to find the lowest interest rate.

But if you can’t pay your employees or your bills, those niceties go out of the window and you need money fast or you’re in serious trouble.

There may also be times when you need fast cash to exploit an opportunity rather than avert an emergency. If a key piece of equipment fails and needs rapid replacement, you could use your instant loan to upgrade to a better solution that will make your life easier.

Alternatively, you might spot an investment opportunity with a time window that can be measured in days or even hours. Your fast business loan could mean the difference between missing out and taking your company to the next level.

What you need to do for instant business loan approval

Alternative lenders all have one thing in common: each one has a slightly different application and approval process. However, most will consider your credit history when making a decision.

Therefore, your credit score may be examined and you could be declined if it is found wanting. That said, a compromised credit score may not be a barrier to success, as some alternative lenders prefer to focus on other metrics, such as a company’s future prospects.

What are the options available for instant business loans?

When you need money fast, there are several possibilities open to you.

A short term business loan from an alternative lender is certainly an option. You borrow an agreed amount of money, then repay the capital plus interest over a set period. However, if this doesn’t suit your company’s needs there are several other options on the table.

A business line of credit allows you to borrow and repay at will against an agreed credit limit. Offering the same flexibility as an overdraft, it’s an excellent arrangement that can help you not only deal with a cash flow crisis today but also with similar shortfalls in the future.

The downsides? This kind of lending is risky for the financial institution, so you will need an excellent trading or credit history to be accepted. For the same reason, interest rates tend to be higher than for conventional loans (though, of course, you only pay interest when you’re actually using the facility).

A merchant cash advance allows you to borrow an agreed sum, then repay it via a fixed percentage of your daily credit card sales.

The advantage is obvious: with a conventional loan, you have to make fixed payments even if your business suffers a downturn and money becomes extremely tight.

With a merchant cash advance, your repayments are directly linked to your sales, so there can never be any unpleasant surprises. The drawback is that this is a notoriously expensive way to borrow, with fairly hefty charges and interest.

If you regularly suffer from late-paying customers, invoice factoring or discounting could permanently solve your problems. These innovative solutions allow you to borrow against the value of your invoices, the instant you issue them.  Meaning you get paid within minutes rather than months.

The proportion you can borrow will vary from lender to lender, but typically you’ll be looking at between 80% and 90%. As the word “discounting” suggests, the finance company will keep a proportion of the proceeds in return for providing the service. This isn’t the cheapest way to borrow, but for companies with ongoing cash flow difficulties it can be the most effective.

Which solution will work better for you will depend on your circumstances.

A cash flow disaster needn’t become a catastrophe

As you can see, there are plenty of options for instant business loans if you’re faced with financial commitments you simply can’t meet.

So, if disaster strikes, head online, make your application to an alternative lender. Then sit back and wait for the money to reach your account within 24 hours.

To apply for an instant business loan with Cashsolv, click here.

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