In the face of a crisis, small business loan fast approval can be your saving grace. Similarly, if an unexpected opportunity arises, fast approval may help you capitalize on it. Of course, quick approval has its downsides too; in some cases, there may be alternatives that meet your needs better. Regardless of your financial situation, this post will help you navigate the subject of small business loan instant approvals. After reading, you will:
- Learn the pros and cons of lenders that offer instant approval.
- Know how to get quick business loans
- Understand your instant approval financing options.
The Pros and Cons of Instant Approval Loans
The Pros of Instant Approval
1. Ideal for timely opportunities or emergenciesIn the world of small business financing, timing is everything. For instance, if you need to make payroll before month’s end, you need financing that puts funds in your pocket right away. Even the best, most affordable loan won’t alleviate a payroll emergency if the funds are a few days late. For scenarios where time is of the essence, instant approval can be a key differentiator.
2. Less paperwork intensive than traditional loansFor many small business owners, the fact that business loans require an extensive application process is a major obstacle to financing. If you apply for small business loans with fast approval times, paperwork is significantly reduced. As a result, you can get approved for necessary financing with minimal disruption to your work routine.
The Cons of Instant Approval
1. Higher interest ratesGenerally, small business lenders who offer fast approval also charge higher interest rates. This is because loans with fast approval tend to be for shorter terms. With a shorter term, the loan has less time to accumulate interest, so lenders compensate by charging higher rates. The more lenient qualification criteria of fast approval loans is also a factor in lenders’ higher interest rates. This is because applicants for fast approval loans tend to be more significant credit risks. To compensate for that risk, lenders charge higher rates and additional fees.
2. Less regulated compared to traditional banksPart of the reason certain lenders can offer fast loans is because they’re not a traditional bank. Banks have strict regulations they must follow or risk losing their charter. Fast approval loan lenders are considered alternative lenders and so face much less regulatory scrutiny. This makes it especially important to seek out reputable, competent lenders when seeking a fast approval loan.
How to Get a Quick Business LoanIf you need a quick business loan, you should apply for additional working capital from an online lender. Traditional brick-and-mortar lenders, such as a bank or credit union, simply take too long. Before you start looking for lenders, though, you should compile some basic financial information. Even for fast business loans, you’re going to be asked for (at least) the following documents:
- Your business and personal credit report
- Bank account statements
- Tax returns
- Income statement
- Balance sheet
- Budget and future cash flow projections