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Emergency Business Loans That’ll Get You Fast Funding

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Emergency business loans such as short-term loans, business lines of credit and merchant cash advances can offer a lifeline if you need express business funding.

These types of loans can often be obtained within a few days, are available to those with poor credit and can come without many restrictions on their use. The drawback to fast business loans is that they can be expensive — and using them can compound ongoing financial problems.

Think about all this carefully before deciding to seek emergency business financing.

5 types of emergency business loans

Emergency business loans could help keep your operation afloat during the coronavirus pandemic, but be mindful of the current state of your company. Consider repayment schedules and costs when taking out emergency financing, as you may need to start making payments before the COVID-19 crisis ends.

Emergency Business Loans
Type of loan Lender option Time to funding
Short-term loan OnDeck As soon as the same day once approved
Medium-term loan LendingClub As little as a few days
Merchant cash advance Credibly As soon as the same day once approved
Business line of credit Bank of America As soon as possible once approved
SBA disaster loan SBA Decision often within 2 to 3 weeks

1. Short-term loan

Short-term business loans typically need to be paid back within a year, but you can find options that extend your terms to 18 or even 36 months. These are structured like traditional loans and are designed to help you get fast business funding to overcome a rough patch, meet payroll expenses or grab a business opportunity, among other things.

Short-term loans come with fixed payments and terms. While interest rates can run higher because of the quick repayment, you could owe less in overall interest compared to longer term loans. Your personal credit score will play a large role in the term and interest rate you receive.

While the application process may take longer than other emergency business loans, it may be possible to get funding as soon as the same day you’re approved.

Short-term loan to consider

OnDeck provides short-term business loans of $5,000 to $250,000 with loan terms of 3 to 24 months. APRs start at 29.90%, though the average is 62.1% based on loans originated in the half-year ending March 31, 2022. Borrowers may receive funds the same day that the loan is approved. To qualify, your business must have been open at least a year and have at least $100,000 in annual revenue. You must also have a personal credit score of at least 625.

2. Medium-term loan

Medium-term loans also must be paid back over a set term, typically between two and five years. These loans can typically be for amounts up to $500,000, which could be enough funding to help a small business out of most kinds of jams.

The application process for a medium-term loan is typically more rigorous than getting a short-term loan. A guarantee, collateral and solid credit history are often required. You’ll need to supply a good amount of personal and business information, such as your business plan, personal credit report (and business credit report, if you’re already established), personal and business tax returns for the last three years, business financial statements and business bank statements, among other things.

Medium-term loan to consider

LendingClub, a peer-to-peer lending platform, offers business loans of $5,000 to $500,000 with terms of 12 to 60 months. APRs range from 9.77% to 35.98%. To qualify, you’ll need to have been in business for at least a year, have at least $50,000 in annual sales, own at least 20% of your business and have at least fair personal credit or better. You also can’t have any recent bankruptcies or tax liens. Though collateral can often be required with medium-term loans, LendingClub doesn’t require this for loans of less than $100,000.

3. Merchant cash advance

Merchant cash advances aren’t loans — instead, you’re selling future sales revenue. Your business agrees to give back a set amount of money from future sales — plus fees — in exchange for a chunk of emergency business cash.

The lender receives a percentage of the company’s sales, deducted from the borrower’s account. These advances don’t always come with specific timing, since the borrower will pay the allotted percentage of sales until the obligation is repaid in full. The borrower often ends up repaying the cash advance in three to 18 months.

Merchant cash advances are generally very expensive. This is because credit requirements are often lax, so borrowers with poor credit can likely secure these fast business funds. Applicants typically aren’t expected to supply a large amount of information — common requests include a photo ID, business tax returns, bank account statements, credit card statements and authorization for a credit check — and approval can happen within minutes of applying.

Merchant cash advance lender to consider

Credibly offers merchant cash advances of up to $400,000 with factor rates starting at 1.15. A factor rate expresses the cost of borrowing using a decimal figure instead of a percentage. To figure out the total amount you’ll owe, multiply the amount you borrowed by the factor rate. So if you borrowed $10,000 at a factor rate of 1.3, multiply $10,000 by 1.3 — the total amount you’ll pay back is $13,000, which means the cost of borrowing the $10,000 is $3,000. Most borrowers will be able to pay back their advances within 3 to 18 months. To qualify, you need a credit score of at least 500 and average monthly bank deposits of at least $15,000. You’ll also need to have been in business for at least six months.

4. Business line of credit

Business lines of credit provide business owners access to a set amount of credit that they can borrow against. The line of credit is reviewed and is often renewed annually. Renewing the line of credit could provide a sense of security through ongoing access to fast business funds. However, this option is most readily available to those with good credit — getting a business line of credit can be difficult without excellent financials, robust cash flow and assets.

A business owner only begins to owe payments (plus interest on the funds used) when they start borrowing against their credit. In this way, a business line of credit is more like a credit card than a business loan. The credit is revolving, which means that your credit is restored as you pay down what you owe.

Business line of credit to consider

Bank of America offers credit lines starting at $25,000 with interest rates as low as 8.00%. To qualify, you’ll need to have been in business for at least two years and have at least $250,000 in annual revenue. U.S. veterans, active duty service members and those serving in the Reserves or National Guard get a 25% discount on loan administration or origination fees on new credit applications.

5. SBA disaster loan

If your business emergency is caused by a natural disaster, you may be a candidate for a disaster loan from the Small Business Administration (SBA). The SBA is also offering Economic Injury Disaster Loans specifically for small businesses impacted by the coronavirus pandemic. All SBA disaster loans are long-term, low-interest loans intended to help businesses repair or replace assets that have been damaged or destroyed in a declared disaster and are not fully covered by insurance. Eligible assets include real estate, equipment, inventory and other business assets.

SBA disaster loans can be borrowed for up to $2 million with repayment terms up to 30 years. The interest rate is 8% or less for those who are able to access credit elsewhere, or 4% or below for those who aren’t able to access credit elsewhere.

You can apply online, and you’re required to provide tax return information with that application. After you’ve applied, an SBA inspector will estimate damage costs, and the process can take several weeks. So while this could be helpful, it isn’t good for those looking for fast-funding business loans.

Can you get an emergency business loan with bad credit?

It’s possible to get an emergency loan with bad credit, though a poor credit score will likely force high interest rates and disqualify you from certain types of borrowing. You’ll be most likely to qualify for a merchant cash advance, invoice factoring or a short-term business loan with a high interest rate.

With bad credit, you may even be able to get access to same-day-funding business loans when you face an emergency. Just remember that you pay for that type of convenience — loans that are available that quickly are usually the most expensive.

When to consider fast business funding

You could consider an emergency business loan when you need to:

  • Meet payroll or pay bills because receivables are delayed
  • Pay operational expenses during slowdowns
  • Replace broken equipment
  • Repair property damaged in a disaster
  • Cover sudden, necessary changes in operations
  • Pursue an urgent business opportunity

What to ask yourself when considering fast business loans

  • How much money do I need?
  • If I get that much money, how will I pay it back — plus interest?
  • Do I need the funding right away or am I anticipating its need?
  • How fast do I need to receive the money after applying?
  • How much information am I willing to provide to apply?
  • Do I need one-time, recurring or ongoing funding?
  • What loan terms work best for me?
  • Will my credit make it difficult to qualify?
  • Do I have unpaid invoices I could leverage to get funding?
  • Is my need caused by a declared disaster?

2 emergency business loan alternatives

We’ll look at business credit cards and emergency personal loans as alternatives to emergency business loans.

Emergency Business Loan Alternatives
Alternatives Typical time to funding
Business credit card 7-10 days to receive card after approval; immediate access to funds once you have the card
Emergency personal loan As soon as one business day after approval

1. Business credit card

Business credit cards allow you to finance purchases up to an amount dictated by your credit line, but usually with average APRs at 15.37%. It’s best to have a business credit card in hand when disaster strikes to gain access to emergency business financing. You can usually obtain one within seven to 10 business days after approval.

In some cases, you can get a 0% introductory APR business credit card where you don’t owe interest for a certain period. Be sure you can pay off the card within that period, though, because you would likely owe deferred interest if not. Whether you can use this as low-cost emergency funding depends on whether you already have the card when disaster strikes — or if you have a few weeks to wait.

2. Emergency personal loan

Personal loans can often be used for business expenses. These loans typically come with average APRs ranging from 10% to 28, and they may also come with a range of fees, including application fees, origination fees, late payment fees and more. Online lenders may be able to supply you with unsecured personal loans within a few days — or even a day — of applying. It may be easier to get a personal loan than a business loan, especially if your business has not been established for long or if you haven’t built up the business’s credit separately.


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