A small business loan is typically the most sought-after financing solution for entrepreneurs looking for immediate financial assistance. Unfortunately, traditional bank loans usually take weeks to months of back-and-forth communication between the lender and the borrower before approval is granted. Also, small businesses seeking a bank loan have the additional burden of proving stable credit histories, offering collateral, and almost always giving personal guarantees. Because small business owners tend to run their businesses with little wiggle room, being able to find resources for an immediate small business loan or small business line of credit is especially crucial.
Does Your Business Need Immediate Cash?
There is a myriad of reasons a business owner may need to get their hands on immediate funding, such as a short-term loan or small business line of credit. The business may experience an unforeseen dip in sales, or an essential piece of equipment may break down.
Other needs for quick funding include:
- Operational expenses. Every day small business owners face numerous financial obligations such as vendor bills, utilities, and payroll.
- Inventory and supplies. You need merchandise to make sales, but you must pay for the stock upfront.
- Opportunities that are too good to pass up. You never know when a sought-after location will open up or when there’s an opportunity to buy the inventory you’ve been waiting for.
- Emergency disaster. When a pipe bursts or your building suffers another setback, you’ll need immediate cash to cover the cost of the damages.
Why Getting a Traditional Bank Loan Is Not Immediate
Several factors go into the lending process that can extend the approval time. Even when small business owners apply for a Small Business Administration (SBA) guaranteed loan, the number of steps can seem overwhelming. The SBA lending process is known for its massive list of application requirements.
Typically, traditional bank loans can take a few weeks to a few months to get approved. In addition to business and personal credit reports, required documents include:
- Personal background statements
- Criminal records
- Educational backgrounds
- Partner resumes
- Formal business plan
- Income tax statements
- Financial statements
- List of collateral
In addition, small business bank loans also require you to produce numerous business documents, such as licenses and permits, incorporation filings, supplier contracts, vehicle leases, and real estate paperwork.
So although small business owners may be in a hurry to get financing, depending on the loan amount, the bank often requires the loan to go through the underwriting process.
What About Short-Term Business Loans and Small Business Lines of Credit?
Short-term business loans are easier and faster because the requested funding amounts are usually smaller. Immediate business loans and small business lines of credit tend to be processed quickly because the loan is typically for a shorter time frame.
Asking the financial institution where you have your business accounts may seem like the best bank for your small business line of credit. However, it’s critical to do some research and look into other types of lenders and compare terms and rates. Small business lines of credit can be found at many financial institutions, such as banks, credit unions, and alternative lenders. As stated above, for small businesses, obtaining a small business line of credit from a traditional bank may be challenging as qualifications typically require an outstanding credit score, a long credit history, and substantial annual revenue.
How To Get a Small Business Line of Credit
A small business line of credit is considered a short-term loan—the fund amount is smaller, and the payback terms are quicker. Like a small business credit card, a small business line of credit is a “revolving” credit line that allows the borrower to draw money when necessary and pay the funds back over a predetermined time. The borrower is preapproved for a particular credit limit and pays interest on the amount drawn. Once the money is repaid, the borrower pays nothing until the next draw.
When looking for the best line of credit for your small business, be sure your company meets the lender requirements. Is there a minimum credit score? A monthly or annual revenue requirement? What about a minimum number of years in business?
You’ll also need to determine if you’re eligible for a secured or unsecured small business line of credit. With a secured line of credit, the borrower must secure the loan with collateral to make the loan less risky for the lender. Collateral includes real estate, business equipment, and accounts receivables.
An unsecured small business line of credit does not require collateral. But because these unsecured small business lines of credit are riskier, unsecured business lines of credit rates are typically higher.
The application process is more straightforward than a traditional bank loan. When applying for a small business line of credit, gather the following documentation:
- Recent business tax returns
- Recent personal tax returns
- Bank account information and bank statements
- Financial statements (balance sheet, income statement)
- Federal Tax Identification Number or Employer Identification Number (EIN)
- Social Security Number
- Business entity type (sole proprietorship, partnership, corporation, limited liability company)
- Past loan documentation
Once the small business line of credit is approved, the money is set aside in a separate account, ready to be accessed whenever you need it.
Which Financing Company Provides an Immediate Solution?
To get immediate small business funding, turn to a business lender like Financing Solutions.
The approval process is quick and easy. It only takes a 2-minute small business line of application with no documents required to obtain a same-day business funding answer from Financing Solutions. More than 90 percent of the businesses that apply get approved.
If you have been in business for at least two years and can demonstrate that your company is successful, you can apply for up to $100,000 dollars in quick business financing. The money can be used for any business expense, such as making payroll, purchasing supplies, or building your working capital.
Unlike a bank or a cash advance company, there is no long-term commitment or early repayment penalty. You can repay the money in a few weeks or months.
Fill Out Your Application for a Small Business Line of Credit!
Financing Solutions is a great provider of small business lines of credit, offering an easy, straightforward application process. It doesn’t require collateral or documentation to receive a written offer. Other alternative lenders have a much longer application process and can be relatively expensive.
Because the founders of Financing Solutions have started and grown several companies themselves, they understand how important it is to keep costs low. That’s why we don’t charge you to set up the credit line, and there are no maintenance fees. We don’t ask for personal guarantees, and applicants can receive a no-obligation offer letter the same day. We make approval decisions based on our decade of experience working with small businesses.
Find out today why we have five-star ratings from the Better Business Bureau and Google. Also:
- There are no costs to set up the line or keep it in place
- There’s an easy 2-minute application online application
- If approved, you’ll receive a same-day, no-obligation offer letter
- The fastest setup, 48-72 hours
- Once you have the line of credit, requests for funds are wired to your bank in minutes.
- You can use your line of credit whenever needed
- Inexpensive when used (low fees)
- There are no restrictions in place or collateral required
- No personal guarantee is required
- Financing Solutions is a leading provider of lines of credit
- We are a reputable company with an A+ & 5-star rating
- You can pay off the line whenever you are ready
- The credit line is easy to renew and renews yearly
- You have a secured account portal access 24 x 7
A small business line of credit is a good funding resource available whenever your company needs it, without the heavy burden of term loan requirements. If you want to see if your small business would be approved and for how much, please fill out the no-obligation, 2-minute line of credit application here.