5 Types of Fast Business Loans for Small Businesses in 2024

Whether it’s a busted pipe in the office or a broken piece of equipment, unexpected expenses can happen anytime. When this happens, small business owners don’t have the luxury to wait for weeks or months for bank loans. Fortunately, alternative online lenders offer fast business loans for companies seeking immediate capital.

Business owners generally prefer bank loans because of their affordability. However, the time it takes to process your application and to fund your business is often a deal-breaker for many. Since most banks don’t offer fast business loans, you may have to seek help from an alternative online lender. If your application goes without a hitch, you can receive the funds in as little as 24 to 48 hours. To get to know your options, here are five types of fast business loans for small businesses.

1. Business Line of Credit

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Once qualified for a business line of credit, the lending company you’re working with will give you a predetermined credit limit. You’ll be able to withdraw money from your credit limit as needed. Unlike other conventional funding options, you will only have to repay the amount of money you’ve withdrawn – not the entire credit limit. Since it’s revolving, you don’t have to reapply if you need funds again. Your credit limit will go back up again once you repay what you’ve withdrawn.

2. Equipment Financing

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As the name suggests, equipment financing is specifically used for the purchase or lease of business equipment. Lenders will give you the capital to acquire the equipment needed for your business. The equipment you’re looking to purchase serves as collateral for the loan. In case you default on the loan, the lender has the right to repossess the equipment.

3. Inventory Financing

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Similar to equipment financing, inventory financing allows you to use the inventory you’re looking to purchase as collateral. The amount of money you can borrow depends on the type of business you own, the inventory you’re looking to finance, and the inventory churn. Checkout SMBCompass to know more about it!

4. Invoice Financing

Invoice financing allows you to sell outstanding invoices to third-party companies at a discount instead of waiting for 30 to 90 days to get paid. Lenders often give you 80% to 90% of the total invoice value, while the remaining balance (minus transaction fees) will be given after your customers pay their dues. The terms for your invoice financing depends on the strength and credit of your business, and the strength and credit of your customers.

5. Purchase Order Financing

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Don’t have enough working capital to fulfill customer orders? Purchase order financing can be of help! With purchase order financing (PO financing), lenders often fund 80% to 90% of the total supplier cost. After meeting customer orders and sending them an invoice for their purchase, your customers will pay for the goods to the purchase order company you’re working with. In turn, the PO financing company will send you your profit, minus a transaction fee.

Apply for Fast Business Loans Today!

There are a variety of fast business loans you can choose from depending on your business’ unique needs and preferences. If you’re looking for additional funding, you may want to consider getting a business line of credit. If you need a certain piece of equipment, you can get equipment financing. The possibilities are endless!