Where to Look for an Emergency Business Loan
MOST BUSINESSES NEEDING AN EMERGENCY BUSINESS LOANS START WITH A LOCAL BANK
Every business owner has been there, you need an emergency business loan and you go to your local bank and talk to the bank officer. It might be the branch you deal with now or it might a bank you have never been to. The loan officer listens to you politely, hands you a bank loan application to fill out and tells you to come back when you are ready. When you ask the loan officer how long it would take to get a business line of credit or a working capital loan, she says, “about 6-8 weeks”. You walk out the door knowing that you should have had this loan in place ages ago and that you will need to look elsewhere for the $20,000 or you are going to not make payroll.
OVER THE LAST 5 YEARS ALTERNATIVE LENDERS HAVE REPLACED BANKS FOR EMERGENCY BUSINESS LOAN SITUATIONS
You go back to your office and type in google quick business loan and to your surprise, the listing of companies that come up are not banks but alternative lenders. Alternative lenders are private companies that are loaning money where banks can’t. A bank is a good place to go to if you have time, if you have assets and if your business has been around for 3+ years. Other then that, a business bank loan will be extremely hard to get but with the new alternative financing companies, you can often find new options. There are now traditional factors, spot factors, asset-based lenders, quick business loan companies and a whole slew of other financing options.
WHAT IS A FACTOR, ABL, AND OTHERS?
Account Receivable Factoring has been around for thousands of years. A Factor is basically a company that is willing to give you money in exchange for your receivables ( the money someone owes you). A Spot Factor is a company that will not require a long term relationship with you and will often be good when you are in an emergency business loan situation. Asset-Based lenders (ABL) are financing companies that will look at all of your assets such as equipment, receivables, cash on hand, commercial property, etc. and will loan you money against those assets. A company that provides quick business loans are often looking at your personal credit history, your company financials and other data points to determine if you are creditworthy.
TIME IS OF THE ESSENCE
When you are in an emergency business loan situation time is important and the best start is to get the process going. Fill out a loan application and get the process going ( but not with a bank) and you will get the loan you need. Nowadays there are a lot of financing options and once you get this problem taken care of, it might be a good idea to go back and fill out that bank loan application so that you have a cheaper resource in the future.