Running a business comes with its fair share of unpredictability. Natural disasters, economic downturns, lawsuits and inflation challenges are just a few. Not surprisingly, in 2021, 91% of employers sought emergency assistance funding, according to the Federal Reserve Banks’ Small Business Credit Survey.
When you find yourself facing an unexpected issue, an emergency business loan might be your best solution. This type of financing is fast and accessible and can be used to help your business cover costly expenses in times of crisis.
We’ll cover your 5 best options and what you need to apply.
5 of the Best Emergency Loans for Businesses
Emergency small business loans are fast to finance, some offering approvals and funding within 24 hours. The most common types of these quick loans for small businesses are short term, with repayment periods rarely exceeding 18 months. Here are a few of the best business loans for an emergency.
1. Short-Term Loan
If you need emergency business cash fast, consider a short-term loan. Some lenders can approve up to $500,000 in short-term funding, and capital could be released the same day as approval. These loans are usually repaid over a period of 3-18 months.
2. Merchant Cash Advance
A merchant cash advance (MCA) is another emergency business finance option that provides the borrower with a lump sum of cash in exchange for a portion of the business’s future sales, which the borrower repays in daily or weekly installments over several months. Thanks to looser lender requirements, it can be easier to qualify for an MCA than other types of financing.
3. Business Line of Credit
One of the best quick business loan options in an emergency is a business line of credit. As with a credit card, a line of credit allows businesses to withdraw money — up to a maximum amount — to cover various expenses.
An emergency business line of credit can be secured with collateral or unsecured. Interest is paid only on the amount of capital withdrawn. Additionally, with revolving credit lines, capital becomes available again after payments are made. (Similarly, a business credit card is another option when you need emergency business cash.)
4. Accounts Receivable Financing
If you’re in the business-to-business space and you’re waiting on customer payments for goods or services rendered, you can get immediate access to a portion of that money with accounts receivable financing, another type of small business loan in an emergency.
Often, a lender will advance a qualifying business up to 80% of the money owed from qualifying receivables. Once the balance is paid, the business will receive the remaining amount — minus any lender fees.
This can be a good option for a business with little or poor credit history because lenders are more concerned with the likelihood of customers paying their invoices.
5. Economic Injury Disaster Loan
The Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL) can help you obtain an urgent business loan to cover expenses when your doors are closed because of natural disasters, such as wildfires, floods and storms.
With the EIDL small business emergency loan program, the SBA guarantees a portion of the funding — up to $2 million — to help you meet expenses such as rent, utility bills and employee salaries until your business can resume normal operations.
You can also access emergency small business loans if a disaster has been declared in your area, interrupting your daily functions.
Where Can I Get the Best Short-Term Emergency Business Loan?
Emergency small business loans are offered primarily by alternative online lenders. When compared to other lending providers, such as banks and SBA loan lenders, online lenders come out on top for speed and hassle-free applications, features many entrepreneurs value when they’re in a pinch.
Specifically, alternative lenders typically have lower approval requirements than their conventional counterparts. That means if your business is young or generates a low amount of revenue, you still might have emergency business finance options. That also applies if you’re seeking an emergency business loan with bad credit.
These emergency cash lenders also are known for their quick small business loans, thanks to streamlined approvals driven by data analytics and online service enhancements.
The application process is facilitated entirely online and decisions can be made in hours. In certain circumstances, funds from emergency small business loans can even be deposited the same day approval is issued.
What Are the Top Reasons for an Emergency Loan?
There are several scenarios when you might need emergency business cash to keep operations running. Here are some instances when unexpected expenses can arise and when you might need a quick small business loan.
Replace or Repair Business Equipment
Every business has a piece of equipment that either makes a worker’s job possible or contributes significantly toward efficiency. Replacing this type of equipment can be expensive but necessary, especially if your business relies on it for its daily operations. An emergency business loan can help get your business the equipment it needs to continue operating normally.
Related: Equipment Financing
Cover a Customer’s Unpaid Balance
If your business manages multiple customer accounts and one or more of those customers are unable to pay your company on time for its services, it may affect how your business functions. A quick loan for your business can help make ends meet while you wait for outstanding balances to be paid.
As a small business owner, you do your best to prepare for busy seasons and lulls as well as keep an eye on the news and trends that will impact your industry or the economy as a whole. However, despite your best efforts, you could still experience business disruptions, such as due to a natural disaster or national (or personal) health crisis. Challenges such as these drive many entrepreneurs to apply for small business emergency loans.
Pursue Time-Sensitive Business Opportunities
Another excellent use for an emergency business loan is to take advantage of a business opportunity. For instance, emergency small business funding can help you act on a limited-time discount on a product you’ve been waiting to add to your inventory.
Benefits of an Emergency Business Loan
Due to their high accessibility and quick funding timelines, emergency business loans typically have higher APRs than conventional small business loans. That said, there are many advantages to consider, such as the following:
- Overcome a temporary need for funding
- Avoid stretching your business thin on capital
- Keep your business operating as usual without making cutbacks
- Seize opportunities that optimize your company’s growth
- Avoid long-term financial commitments
- Don’t allow a short-term issue to affect the way your business operates long term
Related: Fast Small Business Loans
Applying for Emergency Business Funding Online
To apply for emergency business funding online through Fast Capital 360, you’ll need to provide basic information about yourself and your company, along with your 4 most recent business bank statements.
We take the information you provide us and bring it to our network of lenders to find you the loan you’re looking for — fast.
After all, when you need emergency small business funding, the last thing you need is a lender that will drag its feet throughout the application process.
Ready to apply for a fast business loan online?
3 Reasons Why You Should Apply for Funding Through Fast Capital 360
1. Approval Within Hours
Our online application keeps things quick and straightforward. At Fast Capital 360, we are dedicated to helping businesses find the right funding option as soon as possible.
Once you complete your online application, we start working for you. You might receive a call from one of our experienced Business Advisors in as few as 30 minutes to review financing options that could help you and your business through difficult times.
2. Next-Day Funding
Short-term financing is a great emergency solution when you need to get a business loan fast. Your Business Advisor will inform you of your available financing options. If we find emergency money for your small business, you could receive the funds as soon as the following business day.
3. No Pressure
Our Business Advisors are here to help — whether that means getting you funded as soon as possible or pointing you in a direction that might better serve your company. If for any reason, you’re unhappy with the options we provide you, there’s no pressure to sign a contract.
Who Qualifies for an Emergency Business Loan?
Getting a short-term business loan can help owners more easily navigate unpredictable events and the costs that come with them. Through our funding partners, we likely can provide emergency business cash to companies meeting these minimum requirements:
- At least 1 year in business
- $75,000 in annual revenue
- Credit score of 540 or better