Many small to midsize companies will need to get money quickly at one time or another. Whether there’s a cash-flow challenge or a time-bound opportunity, having access to same day business loans can be a lifeline for many entrepreneurs.
What same day business loans are available to business owners? This guide will provide you with the information you need to make the best decision about which instant business loans are a good match for your needs.
Where Can You Get an Instant Business Loan?
Getting an instant business loan through a reputable lender might seem impossible, but it isn’t. If you’re looking for a same day business loan online, consider alternative lenders, which offer a range of convenient and fast financing options for qualified entrepreneurs.
5 Types of Same Day Business Loans
These days, companies specializing in same day (or next day) business loans exist expressly to help small businesses over rough patches. There are various types of business loans and short-term financing options available.
1. Accounts Receivable Financing
Clients don’t always pay invoices on time, and business clients may pay 30 days or more after receiving an invoice. Maintaining a healthy business cash flow can be a struggle in this situation.
With accounts receivable financing, your lender advances you a portion of your client’s invoices. This funding can help you keep going until the payments arrive. Both invoice factoring and invoice financing fall under the umbrella of accounts receivable financing. However, they vary slightly in how lenders collect their payments and how invoices are managed.
2. Business Line of Credit
Benefits of a business line of credit include the following:
- Use only what you need at the time
- Pay interest only on the amount you draw
- Manage the card well and you can improve your business credit score
If you have a revolving line of credit in place, it works similarly to a same day business loan by giving you cash on the spot, available whenever you need it. As you pay it down, the line of credit builds up again.
The main disadvantage of a line of credit is that you might need to provide collateral, especially if your business is new. You also will pay higher interest rates if your credit score is less than perfect.
3. Merchant Cash Advance
If you’re in search of a small business loan with instant approval, consider a merchant cash advance (MCA). Though not technically a loan, financing providers can offer qualified companies an advance, sometimes as quick as the same day.
The approval amount is based on a percentage of the business’s daily transactions. You don’t need a good credit score to qualify, but you may need to have been in business for at least a few months and meet the lender’s annual revenue requirements.
The MCA is an easy way to get an instant business loan, but it’s also one of the most expensive options. Businesses using an MCA usually pay back between 20% and 50% more than the amount borrowed, typically expressed as a factor rate, written as 1.2 or 1.4 in this case, respectively.
For example, if you borrow $10,000 at a factor rate of 1.3, or 30%, you’ll need to repay a total of $13,000. This is higher than most other short-term loan interest rates. Also, payments are often due daily or weekly, which can impact your cash flow. That said, if approved, you could qualify for a same day merchant cash advance.
4. Short-Term Working Capital Loans
These loans are temporary options used to cover regular operational expenses, such as rent, payroll and utility bills, during a lull in business. They are usually smaller loan amounts and meant to bridge the gap until additional revenue comes in.
These loans don’t typically require collateral, but usually require repayment over a year to 18 months. You could get a short-term working capital loan fairly quickly, especially if you’ve had one before and paid it back on time.
5. Equipment Financing
Imagine receiving your biggest order ever and a critical piece of equipment suddenly dies on you. Getting a loan with instant approval can save your business from that bind.
Equipment financing allows you to buy the machinery, vehicles, medical technology or tools you need to deliver on your promises. You won’t need collateral because the equipment itself secures the loan. This means even with a less-than-perfect credit score, there’s a high chance of qualifying.
While this kind of financing isn’t strictly a same day business loan, it usually doesn’t take more than a few days to get a response and arrange the funds.
Top Lenders for Same Day Business Loans and Financing
Here are several alternative financing providers for fast business loans online, which we at Fast Capital 360 are fortunate to partner with. They’re known for their quick turnaround times and flexible financing options.
Time in Business
$15,000 a month
$10,000 a month
Everest Business Funding
Undisclosed, but company says it approves 95% of businesses
$4,000 a month
OnDeck offers term loans starting at $5,000 with repayment terms up to 24 months. The company also offers lines of credit from $6,000 for 12-month terms. Repayment terms are daily or weekly. In some cases, applicants could receive funds the same day of approval.
Minimum requirements for approval include:
- 1 year in business
- 600 FICO score
- $100,000 in business annual gross revenue
OnDeck has been accredited with the Better Business Bureau (BBB) since 2008 and has earned the organization’s A+ rating. It’s also earned a 4.8-star rating from more than 3,100 Trustpilot reviewers.
Whether you’re looking for same day merchant cash advances or another type of urgent business loan, you’ll find it here, including the following:
- Working capital loan
- Business lines of credit
- Invoice factoring
- Equipment financing
To qualify, you’ll need to meet these minimums:
- 6+ months in business
- 500+ FICO score
- Average monthly revenue of $15,000+ (or $180,000+ annually)
Because of the low FICO score requirement, Credibly is a good alternative if you’re in search of same day loans for poor credit.
Credibly is A+ rated with the BBB, where it’s earned an A+ rating. Additionally, it has a 4.8-star Trustpilot rating.
If you’re in search of same day business funding, Forward Financing touts approvals within hours. Financing is available starting at $5,000 and repayments are daily or weekly. As you pay down your balance to 60% of your original funding amount and are current on your payments, you could qualify for funding renewal.
To qualify, you must have:
- 1 year in business
- $10,000 in monthly revenue
- 500+ credit score
Forward Financing has a 4.7-star rating on Google Reviews and a 4.9-star Trustpilot rating. This same day business loan for bad credit provider is also accredited by the BBB and has earned its A+ rating.
Everest Business Funding
This same day merchant cash advance provider offers financing starting at $5,000 up to $1 million to qualifying U.S. businesses with a minimum monthly revenue of $4,000. Approved businesses could receive funding within 24 hours. Everest Business Funding has earned a 4.4-star Google rating from reviewers. The company’s also earned a 4.7-star Trustpilot rating.
Kapitus offers business loans, equipment financing, invoice factoring and lines of credit, among other financing solutions. This is another provider to consider when you’re in search of a near instant business loan, as the company’s website states approved applicants could be funded within 24 hours.
Minimum business requirements include the following:
- 2+ years in business
- $250,000 average annual revenue
- 625 credit score
This same day funding and business loan provider has a 4.6-star Google rating and a 4.7-star Trustpilot rating. It also has an A- rating with the BBB.
See what same day business loans you qualify for in our lending marketplace.
Pros of Same Day Business Loans
There are several advantages to instant business loans. From speed to ease of availability, here are a few good points to think about when you’re making your decision.
Available With Short Notice
Same day business loans can be acquired with short notice. In many instances, however, this only works if you have the foresight to have all of your business documentation ready. Some lenders can provide instant business loan approval if you have that in place, but each has its eligibility criteria.
Low Credit Scores Are OK
Merchant cash advances and short-term working capital loans are usually the fastest way to obtain same day capital, but most financing providers require a credit score of 500 or higher.
If you need small business funding fast, you’re more likely to get it from alternative lenders than from your bank. Online and alternative lenders offer a range of business financing options that you can quickly and conveniently apply for and almost immediately get a provisional answer.
Compare this with an average of 25 hours of paperwork you might be required to complete to be considered for a conventional loan, according to a study by Harvard Business School. That’s without taking into account the time you’ll wait to hear back from a conventional lender.
Early Payment Discount Possible
In some cases, a small business loan same day funding lender may offer an early payoff discount – that is if you’re able to repay your financing and interest in full within a certain established time period. However, this can vary by lender and financing product.
Cons of Same Day Business Loans
While there are some benefits of same day business loans, there are also drawbacks. Here are a few to keep in mind.
Less Funding Available
Often with fast small business loans, approval amounts are less than you’d see with conventional funding options. That said, you may be able to renew your financing offer after a certain period of time and access additional funds if you qualify.
Higher Interest Rates
To offset the risk involved in providing same day business loans, financing providers charge higher interest rates or factor rates. This could mean a higher cost to borrow funds over the short-term.
More Frequent Payments
While urgent business loans usually have shorter repayment terms, they also have more frequent payments. Daily or weekly installments aren’t unusual and are often automatically deducted from your business bank account. This is something to consider in terms of cash flow, as you’ll need to become accustomed to frequent draws from your bank balance.
May Not Help Build Credit
Depending on the financing provider and funding type, payments you make may not be reported to the credit bureaus. If you’re trying to build your credit history with the major reporting agencies, ask the lender if your payments will be reported. That said, if your provider doesn’t report your information to the credit bureaus, the amount of funding you receive isn’t noted as additional debt on your credit report.
Why Would You Need a Same Day Business Loan?
There are many reasons why a company might urgently need a same day small business loan:
- For example, if a major client is late with a payment, cash flow will be affected.
- Costly, unbudgeted equipment repairs can also happen at any time causing business owners to seek an urgent business loan.
- Taking advantage of a special promotion on purchases might bolster your bottom line, but it could leave you unable to make payroll.
Additionally, many business owners don’t have the luxury of high-limit credit cards they can use in an emergency.
Indeed, a lack of capital is a common reason for small business failure. Data from the U.S. Bureau of Labor Statistics shows about 20% of small businesses fail in their first year of operation and 30% in the second. Nearly half of those small businesses fail by year 5.
Needless to say, whenever your company has a cash flow dip or needs working capital to keep operating, a fast business loan with same day funding can help you stay afloat.
See how much same day capital you qualify for.
Keys to Getting Same Day Business Loans
The key to qualifying for a business loan the same day is ensuring your funding application is complete and you follow the lender’s directions regarding the documents needed and the deadline to submit them. Additionally, consider that even though a lender might advertise near-instant business loan approvals, delays or incorrect or missing paperwork could draw out the process.
Also, certain lenders offer both same day funding as well as financing in which approvals take several days. You may qualify (and prefer) loans with longer approval times, as they often have more favorable rates and terms.