Many businesses finance growth and meet short-term capital needs with a small business loan. There are times when fast access to additional capital, or access to a fast business loan, is critical to taking advantage of an opportunity to create additional ROI or meet a short-term business challenge. Unfortunately, because popular media promotes the idea that money is the solution to every business challenge and the more the better—it’s important to remember that borrowing more than is required can be expensive for small businesses; and could even put their viability at risk.
Although a traditional small business loan from the bank is a good option for some borrowers and some circumstances, there are many situations when the typical weeks-long processes associated with their application criteria makes it simply too slow or burdensome given the business need. When unexpected expenses, or opportunities require a fast business loan, the local bank might not be the best choice.
Fortunately, in many instances a quick answer to your loan application is often available online. Lenders like Journey Capital, for example, are often able to have an answer to your loan request in under an hour—sometimes as quickly as within a few minutes, and once approved, you can often have the loan proceeds in your bank account the next day, sometimes within 24 hours.
Common Circumstances that Require a Fast Small Business Loan
Not all businesses or surprises are the same, but here are some pretty common business expenses that are sometimes difficult to anticipate:
- Cash Flow Shortages:
- Delayed Payments: Customers may delay payments, causing temporary cash flow problems.
- Seasonal Fluctuations: Businesses with seasonal sales may need extra cash to cover expenses during off-peak times.
- Unexpected Expenses:
- Equipment Failure: Essential equipment might break down unexpectedly and require immediate repair or replacement.
- Emergency Repairs: Physical store locations or facilities might need urgent repairs due to unforeseen damages.
- Growth Opportunities:
- Expanding Operations: The business might need to quickly capitalize on an opportunity to expand, such as acquiring a competitor or opening a new location.
- Large Orders: Securing a large contract or order may necessitate an immediate increase in inventory or staffing.
- Inventory Purchases:
- Bulk Discounts: Taking advantage of bulk purchasing discounts can require a quick influx of cash.
- Seasonal Stock: Stocking up on seasonal inventory before the peak sales period.
- Working Capital Needs:
- Payroll: Ensuring employees are paid on time, especially in tight financial situations.
- Day-to-Day Operations: Covering routine operational expenses when revenues are temporarily low.
- Debt Consolidation:
- High-Interest Debts: Consolidating existing high-interest debts into a lower-interest loan to reduce overall costs and simplify payments.
- Marketing Campaigns:
- Immediate Marketing Needs: Funding a time-sensitive marketing campaign to boost sales or launch a new product.
- Regulatory Compliance:
- Compliance Costs: Covering the costs of meeting new regulatory requirements or industry standards.
- Supply Chain Issues:
- Supplier Terms: Negotiating better terms with suppliers may require upfront payments.
- Disruptions: Addressing supply chain disruptions that necessitate quick alternative sourcing.
These situations often require quick access to capital to maintain smooth operations, seize growth opportunities, or manage unforeseen challenges effectively.
Speed to Funding
In a study conducted by the Smarter Loans, majority percent of the small businesses surveyed identified speed to funding as one of the top reason they chose an online business loan. 57 percent cited the easy application process and 51 percent the affordable total loan cost. Needless to say, a quick answer and quick access to funds is an important consideration to many small business owners.
96 percent of those surveyed said the reason they were borrowing was to secure capital to enable or drive business growth. Additionally, these small businesses generally anticipate a 5x return for every dollar they borrow. In other words, they expect to earn $5 for every $1 they finance to purchase things like inventory (51 percent) or equipment (54 percent).
A Fast Business Loan From Journey Capital
While a traditional bank loan often requires specific collateral before they will lend to a small business and may rely heavily on the personal credit of the business owner, Journey Capital offers fast small business loans from CAN $5,000 to $300,000 with a general lien on business assets during the loan term and a personal guarantee. In this way, small business owners are able to access the capital they need quickly without securing the loan with specific collateral, and are able to repay the loan quickly to manage expenses.