Emergency small business loans are offered primarily by alternative online lenders.
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.
Alternative lenders also are known for their streamlined approvals driven by data analytics and online service enhancements. The application process is facilitated entirely online, decisions are made in hours and in certain circumstances, funds from emergency small business loans can be deposited the same day approval is issued.
4 Ways to Get Emergency Business Cash Fast
1. Take Out a Short-Term Loan
Some lenders can approve up to $500,000 in short-term funding, and capital can be released the same day as approval. These loans are usually repaid over a 3-18-month period.
2. Consider a 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 — paid 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. Open a 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. Lines of credit can be secured with collateral or unsecured. Interest is paid only on the amount of capital withdrawn, and capital becomes available again after payments are made.
4. Use Your Unpaid Invoices as Collateral
If you’re waiting on customers’ payments for goods or services, you can still get immediate access to a portion of that money with accounts receivable financing (also known as invoice financing). The lender will fund the business with up to 80% of the money owed. Once the invoice is paid, the business will receive the balance — minus any lender’s 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.