There are countless fast business loans that you can use, but you will quickly find that some loans are far different from fast small business loans. Not only do interest rates and repayment terms greatly vary, but you will soon find that the eligibility requirements can also vary, especially for quick business loans. Fast business loans inject the cash you need into your business to overcome financial hurdles or even to expand by taking advantage of an important opportunity. We used our proprietary scoring system, SimpleScore, to vet the best fast business loans by reviewing APRs, loan amounts, terms, fees and product variety.
The 4 best fast business loans of 2020
- Best fast business loan: OnDeck
- Best for bad credit businessest: Kabbage
- Best for established businesses: Fundation
- Best for SBA loans: SmartBiz
The best fast business loans at a glance
|APR Range||Loan Amount||Minimum Credit Score||Funding Time|
Best fast business loan
OnDeck will pair you with the right match for your business loan or line of credit.
Eligibility requirements are as follows:
- Minimum of three years in operation
- Minimum of $250,000 in annual revenue
- Active business bank account
Our Two Cents — OnDeck is a solid loan provider featuring a revolving line of credit and a simple application process. Its wide availability is an added benefit, servicing all states except South Dakota.
Best for Bad Credit Businesses
Get your money fast with quick processing and simple repayment terms from Kabbage.
To apply, you must:
- Be in business for at least one year
- Have a $50,000 minimum for annual revenue
It makes an already attractive lender even better with greater accessibility for the growing business that’s strapped for cash.
Our Two Cents — With loans up to $250,000 and a revolving line of credit, Kabbage is a great choice when you need serious funding for your business.
Best for Established Businesses
Fundation isn’t designed for budding small businesses, but it offers great flexibility for larger companies that need cash flow.
Fundation has great APRs but is undoubtedly designed for larger businesses. To qualify, you must have a minimum of $200,000 in annual sales and at least three employees on the payroll. Your record also shouldn’t show late payments in the last year or any bankruptcies or foreclosures in the previous three.
Our Two Cents — Fundation is not for everyone, given its very stringent eligibility requirements. It requires a great credit history and established business operations to qualify, but if you do, you could benefit from excellent APRs.
Best for SBA Loans
Especially known for real estate needs, an SBA 7(a) loan from SmartBiz carries up to an 85% approval rate and impressive APR rates.
The eligibility requirements for a small business loan are extensive, requiring a clean financial record and a FICO SBSS LiquidCredit score requirement of 150 in addition to traditional credit reporting.
Our Two Cents — There are a ton of hoops to jump through to get this loan, so not everyone can apply. However, the high approval rate and flexible terms make these APR rates well worth it.
What is a fast business loan?
As a business owner, there are times when you need cash quickly. It could be for a number of reasons: perhaps you need some extra money to float payroll this month, or maybe the building sprung a leak, and there are replacements that need to be made. A fast business loan can also serve as the final financing you need to make that push into bigger and better growth.
Whatever the reason, a fast business loan can get you funding quickly, and, unlike a traditional loan, it can still offer you extra time and flexible terms to pay it back.
How fast business loans work
You will quickly find that there are two different kinds of APRs for your fast business loan. While it’s tempting to go with the lowest rate, a fixed rate could cost you more in the long run if a variable rate drops during the life of your loan. Because a fixed-rate doesn’t change, it provides more stability and peace of mind than a variable APR, but you risk paying more if the market changes.
The coronavirus pandemic is a perfect example of how market changes can disrupt the APR‘s for a fast business loan. When the world ground to a halt, markets plummeted. Those borrowers with variable APR‘s benefited from these changes, while those with fixed rate loans were stuck repaying the same pre-COVID-19 rates that they had committed to before the pandemic.
Before you commit to a fast business loan, it’s important to understand the terms of your provider’s loan.
Your loan is configured based on a specific calculation of the amount that you were borrowing, the amount of time you have to pay it back and the amount of interest that you will pay with your APR. The higher your APR and the longer your loan, the more interest you will pay on top of the amount that you actually borrow.
Even if one provider may have a slightly lower APR for your fast business loan, a longer term could end up costing you more than another provider’s loan that offers a shorter repayment term with a slightly higher APR. That’s why it’s critical to carefully calculate your options to see which fast business loan is best for you.
Secured vs. unsecured business loan
There are two types of loans that you can choose from when you need a fast business loan: a secured loan and an unsecured loan.
A secured loan is one that offers backing through some form of collateral. This means that if you fail to meet the terms of your loan’s repayment, you risk forfeiting your collateral in payment. This can include your home, your car or any other assets the lender can liquidate to settle your debt.
An unsecured loan does not include collateral, so these loans are often harder to get and come with more stringent terms, including higher APRs.
Types of business loans
A fast business loan can be further defined as any of these specific loans.
Working capital loans
A working capital loan is designed to cover the everyday operations of your business and can help when you need an extra boost in overall cash flow.
These are not loans meant to grow or improve your business but rather sustain it. A working capital loan injects new capital that helps you maintain your daily operations when cash is tight.
This is a common type of loan that many businesses are using today in light of the coronavirus pandemic. The temporary funding that a working capital loan provides allows companies to get through a rough patch when business is down.
Equipment financing loan
Your equipment is a vital part of your business, and it may be impossible to operate without it. It can also be hard to keep up with emerging technology while fighting to keep your finances out of the red.
An equipment financing loan can be the quick financial boost that you need to jumpstart your business. This is a great way to invest in your company’s equipment now for better success and easier repayment down the road. Even if sales are great, you could still benefit from a fast business loan in lieu of an outright purchase or direct financing through a manufacturer or retailer.
Invoice factoring loans
Though commonly known as a loan, an invoice factoring loan is actually something different.
When you have a bunch of outstanding invoices that you just can’t seem to get customers to pay, you have the option of using an invoice factoring loan which sells your invoices at a bulk discount to a third-party provider. You are paid a lump sum, and the provider then moves to settle and collect those debts themselves.
While not ideal for all businesses, this is a beneficial fast business loan for some companies to receive the cash they need upfront to complete a project before the customer’s payment actually comes due.
When to use a business loan
A fast business loan is a popular way for cash-strapped businesses to infuse new life into their operations, buying more opportunities for growth.
When you take out a loan, interest always makes sure that you walk away at a loss. That’s why it’s important to make sure that you really need this loan because it will cost you.
However, when leveraged appropriately, a fast business loan can give you the cash you need to significantly grow your profits so that the loan promotes cash flow rather than detracting it.
Popular uses for a fast business loan include emergency repairs, additional funds for payroll or just extra cash for your everyday expenses. Just be sure that whatever amount you borrow, you can pay it back and meet the terms of your loan so you don’t do more harm than good. A fast business loan has been an invaluable help to countless businesses all over the country, but if you aren’t careful, it could cost you your entire business.
When not to use a business loan
While fast business loans can provide much-needed help, there are also times when it can be more harmful to your business than it is helpful. Before you commit to any business loan, it’s vital that you fully understand the APR and the accompanying terms of your loan. Many loans last for many, many years, and it’s critical that you are able to meet the repayment terms.
If you intend to repay your loan early rather than payments staggered over time, you will want to consider any prepayment penalties that a lender may assess. A prepayment penalty is a fee that is charged by some lenders when you pay your loan off ahead of schedule. By making a lump payment, you can save yourself tons of interest, so many lenders recoup these losses through prepayment penalties.
While some lenders charge nothing at all, others can charge very steep fees that don’t make it worth your while.
Too long, didn’t read?
A fast business loan can provide the help you need when you find your company finances in a tight spot. Speed is important, especially if there’s a fleeting business opportunity you need to take advantage of before you lose out on more profit. However, be careful, because fast funding business loans may come with unpleasant pitfalls.
The SimpleScore is our proprietary scoring metric to compare products and services at The Simple Dollar in a transparent, evidence-based way. Our editorial team identifies five quantifiable aspects to compare for every brand, determines the rating criteria for each aspect score, then averages the five aspect scores to produce a single SimpleScore. For fast business loans loans, we compared interest rates, product variety, loan amounts, terms and fees for every major lender. Our ratings are meant to be a directional tool to help you in the process of choosing a business loan provider. Be sure to continue your research and shop around for the best business loan that fits your specific needs.
We welcome your feedback on this article and would love to hear about your experience with the business loans we recommend. Contact us at firstname.lastname@example.org with comments or questions.