The Best Short-Term Loan Options for Quick Approval

Sometimes you need money, and you need it fast. This is true in life and in running a business. If you need small business financing quickly, there are a few different options. You should know what those options are, and the cost vs. the benefit of each.

Traditional Loans

A traditional short-term loan with fast approval is likely the first thing you will think of if you need fast funding. They are available, but be certain you can afford it before you apply. You will likely pay dearly for the fast approval. The interest rate will be much higher than what you would get in a typical approval process, and you may have to make payments twice a month or even weekly.

In addition, this type of loan often takes some pretty steep collateral. If you need the financing and you are out of options, just make you have a repayment plan in your budget.

Factoring

If you have accounts receivable on the books, you may have another option. Factoring receivables is not ideal in most situations, but if you need cash fast, you can often leverage the older accounts on your books.

You will get a percentage of what they are worth, not the full amount, but you will have the funds free and clear, and those accounts will no longer be on your books.

Merchant Cash Advance

Another option, if you take credit card payments, is a merchant cash advance. The lender will “advance” you funds from future credit card sales based on the average of your credit card sales over a certain amount of time.

Repayment terms and interest rates may still be somewhat less than desirable, but the security of the future sales helps mitigate the risk for lender, meaning your terms and rates will be better than if you took out a fast-approval traditional loan.

The Better Idea

If you looking for ideas because of a need you have right now, these are all viable options. If you are looking to get out of a merchant cash advance or other alternatives, here are a few better options.

Consider a small business line-of-credit. If you already have it in place, before you need it, it will be the quickest way to access funds when you need them, and the rates will be much better than a quick approval loan. Interest rates vary, but generally range from 9-15 percent.

Small Business Credit Cards are also an option. Though they typically have higher interest rates than a line-of-credit, the limit is often higher and there are sometimes other perks such as cash back and rewards.