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5 Companies That Offer The Best Fast Business Loans

While there are a lot of options out there, it is always ideal to choose one from among lending companies that offer the best fast business loans. Choosing the best means of getting the best rates and terms, and other exciting perks, too.

best fast business loans

In the Economic Bulletin published online by the United States Small Business Administration – Office of Advocacy, it says, “Small businesses show strength in self-employment increases, proprietors’ income gains, job creation advances and births staying above deaths. Loan delinquency rates remain low, but small business loan demand is waning.”

This basically means that more and more small businesses are coming to life, providing jobs to the jobless, at the same time, helping the economy. According to the report, small firms or businesses have “accounted for 8.7 million net new private-sector jobs since 2005, or 62 percent of the total“.

Meanwhile, both larger “larger small firms (with 20-499 employees) and the larger large firms (with 1,000 or more employees) have been the main drivers of growth.”

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However, regardless of how small or big a business is, there is a chance that in one way or another, it may face financial challenges. And while some may get through it and succeed, others may fail.

While there are a lot of factors affecting a business’s failure, there are two most common reasons cited by experts. One has something to do with cash flow issues, and two have something to do with starting off with too little money.

As you can see, both have something to do with finances. Like in any business, no matter how small or big your firm maybe, ideally, you must have enough or more to cover all expense issues now and in the future. Otherwise, you may just face the worse.

Now, the good thing though is — reviving, rather, keeping a business up and running is not a hopeless case.

Thank goodness as in this day and age, businessmen have more options before they even file for bankruptcy or something like that.

One option is to apply for a business loan, which is tremendous. It definitely helps a lot to keep any business running and to ensure there is enough cash to keep it going.

Now, while there are countless business loan providers out there, particularly fast business loans, it is important to note that some loans are way different from fast small business loans. They do not only differ in terms of rates and repayment terms but that they also vary in terms of requirements set.

The thing about fast business loans is that it injects the cash you need into your small business to be able to overcome any financial challenges or in some cases, for expansion purposes.

Now, having said all that, today, we are going to share with you some of the companies that offer the best fast business loans. Remember, like in any other types of loan, shopping around and comparing rates and terms and features is important to be able to land with the best deal possible.

But before we head on to our list of best fast business loans provides, here’s a quick review on some important points that a borrower must know about fast or quick business loans:

  • What is a fast business loan?
  • How does fast business loans work?
  • What are the different types of business loans?
  • When to apply for a business loan?

WHAT IS A FAST BUSINESS LOAN?

True to what it’s called, a fast business loan is a type of loan that is readily available to any business person who needs cash to keep his or her business running. The loan may also be acquired for those who are just setting up a business — for their expenses and other business needs.

In addition, a fast business loan may also be used to expand a business, to renovate or buy replacements of equipment, or may also be used to float payroll for a month.

Whatever the reason is, a fast business loan is ideal for any business that needs quick funding. Contrary to a traditional loan, fast business loans can still offer you extra time and flexible terms to pay the loaned money back.

HOW DOES FAST BUSINESS LOANS WORK?

Now, borrowers need to learn a few more important things before acquiring a fast business loan. This has something to do with the following factors:

  • APR
  • Terms
  • Types of Loans

APR

Similar to other loan types, a fast business loan does have two different kinds of APRs as well. One is fixed-rate, and the other is variable-rate.

While it is tempting to go with the lowest APR, which at first glance goes to fixed-rate, eventually, you’ll realize it may just cost you more. Compared to variable-rate, a fixed-rate, though may look like it’s lower, is fixed and won’t change. It does provide stability and peace of mind, but again, the risk is that you may end up paying more if the market changes.

Meanwhile, a variable-rate APR does change as the market changes. It may go low or high depending on the season.

So, in the end, it’s a matter of choosing between being at risk or being at peace.

Terms

Before committing to any fast business loan, it is important to learn and understand first the terms set by your loan provider.

When it comes to loan terms, the general rule applies — the longer the term is, the smaller your monthly payments will be, but that means paying off more. Meanwhile, when you choose a shorter-term that means paying high monthly fees but saving up a few bucks.

Types of Loans

Again, similar to any other loans, fast business loans come it two types — secured and unsecured loans.

On one hand, a secured loan requires some form of collateral, and the rate is usually lower.

On the other hand, an unsecured loan refers to a type of loan that does not require collateral. However, the APR is usually higher to help compensate for the loss should the borrower fail to pay off the loan.

Meanwhile, if you want to learn about how to particularly get a small business loan, we found this very informative video by Alex Berman. Here, Alex shares a lot of insightful and helpful tips on how to ensure approval of a small business loan.

WHAT ARE THE DIFFERENT TYPES OF BUSINESS LOANS?

Another important information that we thought every borrower must know before they even deal with a fast business loan is learning about the different types of business loans.

Yes, a while ago we mentioned about secured and unsecured loans, but business loans can be further defined as any of the following:

  • Working Capital Loans
  • Equipment Financing Loan
  • Invoice Factoring Loans

Now, let’s know more about each of these —

Working Capital Loans

As the name implies, this particular type of business loan refers to the amount of money need to cover the everyday operating expenses of a business. This type of business loan can help businesses when it needs an extra boost in overall cash flow.

Furthermore, working capital loans are not meant for growing or improvements of a business, but rather for a business’s sustainability. This type of loan adds new capital to help maintain the daily operations especially when cash is very tight.

Of the three types of business loans, this is the most common one that most businesses use today.

Equipment Financing Loan

A business is not a business without proper equipment. Thus, it is important to invest in them, right?

An equipment financing loan exists to help provide a quick financial boost that businessmen need to jumpstart their businesses. This loan can be used, obviously, for purchasing equipment a business needs.

Invoice Factoring Loans

While this is not ideal for all business types, an invoice factoring loan is beneficial for companies that need immediate cash while their invoices are yet to be paid.

Unfortunately, in some instances, customers are unable to pay immediately, which may keep business hanging if it does not have funds. In this case, this particular type of business loan may be helpful.

WHEN TO APPLY FOR A BUSINESS LOAN?

Generally, a fast business loan is a popular way to help sustain business operations when the money is tight, or in some cases, it is used to acquire new equipment or use the loan for business growth opportunities.

BEST FAST BUSINESS LOANS PROVIDERS

So, now that you already know some of the most important details when it comes to fast business loans, it’s time for the real deal.

Below is our list of companies that provide the best fast business loans in the country today:

  • Fundation
  • Fundbox
  • Kabbage
  • OnDeck
  • SmartBiz
Bank APR Range Loan Amount Minimum Credit Score
Fundation 8%–30% $20,000–$50,000 620
Fundbox 10.10 – 79.80% Up to $100,000 500
Kabbage 24%–99% $2,000–$250,000 560
OnDeck 9%–99% $5,000–$50,000 600
SmartBiz 4.75%–7% $3,000–$5,000,000 650

FUNDATION

As stated on their website, Fundation is a digital financial solutions provider that aligns its capabilities with those of its partners to be able to serve small and medium sized (SMB) business community.

The company’s mission is to help “empower small business economy by enabling banks, B2B vendors and suppliers and the other critical institutions that SMBs rely on.”

Headquartered in Reston, Virginia, Fundation is ideal for both budding and established businesses with fair or better credit scores that need a fast funding solution. Furthermore, it is more than ideal for those with an excellent credit score as they may be qualified for the lowest rate possible.

At Fundation, the credit requirements vary depending on the amount of loan. To be specific, for loans below $75,000, borrowers need a credit score of 620. AS with loans amounting to more than $75,000, the credit score requirements are up to 640.

Apart from the credit score requirements, you must also have a minimum of $200,000 in annual sales and at least three employees on the payroll to qualify. Furthermore, your record must not have late payments in the year before prior to your loan application or any bankruptcies, as well as foreclosures.

FUNDBOX

Fundbox is a fintech company that offers business lines of credit. The company was founded in 2013 and is based in San Francisco, California.

Fundbox is ideal for businesses that need to fill quickly a cash-flow gap as the company fund loans in as fast as the next business day upon approval of the business loan.

To qualify for a Fundbox fast business loan, the borrower must have a minimum credit score of 500. Yes, you read it right. It does require low credit as compared to other online lenders out there.

Furthermore, the company requires a minimum annual revenue of $50,000 and at least three months of invoicing history. Supported accounting software or business checking account is also required.

Unlike other online lenders, Fundbox does not require a personal guarantee for business lines of credit amounting to below $50,000, which means the borrower is not personally responsible for repayment in case the business fails to pay off the loan. Collateral is not required as well.

KABBAGE

Kabbage, Inc. or simply Kabbage is another popular online financial technology company that was founded in 2008 and is headquartered in Atlanta, Giorgia. The fintech company provides direct funding to small businesses as well as consumers through the use of an automated lending platform.

On its website, the company states that small businesses, in particular, choose Kabbage as it provides “tools to simplify the day-to-day cash flow concerns that every small business experiences.”

Apart from providing funding through a quick, easy, and convenient application process, the company also provides simple repayment terms, which makes it even more attractive to business loan borrowers.

One thing we noticed about Kabbage, and perhaps one of the things that set the company apart from other online lenders out there is that it does not require much paperwork or documentation, which is precisely one of the reasons also why the process is fast.

Now, to qualify for a Kabbage fast business loan, a borrower must be in the business for at least a year and must have at least $50,000 annual revenue.

Kabbage provides fast business loan amounting up to $250,000, and a revolving line of credit. It’s best for entrepreneurs who need serious funding for their businesses.

ONDECK

Launched in 2015 in Canada, OnDeck aims to “solve a major issue facing small businesses: efficient access to capital” by using “cutting-edge technology to evaluate businesses based on their actual performance, not solely business owners’ personal credit scores“.

Currently headquartered in New York, OnDeck is a well-known global online small business lending company.

What we particularly about the services provided by OnDeck is that it helps pair a borrower up to the right business loan or line of credit. So, if you are someone who’s not that sure whether to apply for a business loan or a line of credit, OnDeck will definitely help you figure out.

Being a veteran lender with experience in more than 700 industries, it is not surprising that the company is one of the best fast business loans provider in the country today.

To qualify for an OnDeck business loan or line of credit, the borrower must meet certain requirements like at least three years in business operation, a minimum of $250,000 in annual revenue, and must have an active business bank account.

Interested borrowers may apply online or over the phone. The company provides as much as $100,000 in a revolving line of credit. Funding is provided as fast as within 24-hours since the submission of the loan application.

OnDeck services all states across the country except South Dakota.

SMARTBIZ

Founded in 2009, SmartBiz is an online company that provides a service that has made the world of Small Business Administration (SBA) lending easier.

While it does not directly issue loans to borrowers, the company, through the use of technology, helps borrowers find the right lender in its network of preferred SBA bank lenders.

SmartBiz helps borrowers determine whether he or she is eligible for business from among its network in just a couple of minutes, which means, borrowers, get to save time and effort trying to do everything themselves.

Over the years, SmartBiz has become more popularly known for real estate needs. In fact, an SBA 7(a) loan from SmartBiz carries up to an 85% approval rate, needless to say, it comes with impressive APR rates, as well.

With regard to small business loan requirements, they’re quite stringent as compared to other lenders. The company requires a clean financial record and a FICO SBSS LiquidCredit score requirement of 150 that is in addition to traditional credit reporting.

Although it has a ton of hoops to get a business loan through SmartBiz, the high approval rate plus flexible terms makes it worth it.

FINAL THOUGHTS ON BEST FAST BUSINESS LOANS

When you open a business – whether it be small or big – you can really barely say if it’s going to succeed or not until it’s up and running. That means you have no idea as well when you can possibly earn back your investment.

Now, as businesses operate on a day-to-day basis, expenses pile up. While there are some who are able to make ends meet, some business owners may get into financial difficulty along the process.

When that happens, good thing is that businesses have an option to get a fast business loan.

By getting a business loan, it helps fill in whatever financial gap there is to help a business thrive. But take note also that business loans may also be used to expand a business if you think it’s time. You can also use it to buy equipment if need be.

Now, while there are a lot of lenders out there to choose from, as we have said earlier, choosing the ones that offer the best fast business loans is key to get the best rates and terms possible. After all, you would surely want to keep your expense (a loan is partly an expense, by the way) at the minimum, right?

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What Are Collateral Loans And What Makes Them Ideal For You

There are two types of loans — one that requires collateral, and the other that does not require any “security”. Today, we are going to put some light on what collateral loans are. We will provide all the essential information to help you understand what this type of loan is all about, and why you should consider getting one.

What Are Collateral Loans

In an investigative paper entitled, “Secured Lending and Borrowers’ Riskiness” by Alberto Franco Pozzolo, it says that “a large number of bank loans are backed by real or personal guarantees.” Furthermore, it states that according to a report by Berger and Udell (1990), nearly 70 percent of all commercial and industrial loans in the United States are made on a secured basis.

Meanwhile, in a report published online by Statista, it says that from March 2014 to June 2020, the loans granted by various commercial banks in the United States amounted to an estimated 14.85 trillion U.S. dollars. Definitely high as compared to previous years. We thought the numbers might even spike in the coming months given the current situation in the country and all over the world.

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Getting loans is inevitable especially during crucial times when our financial capabilities are testes – times such as now.

Now, if you are new to borrowing money from financial institutions or lending company, know that as mentioned, there are two types of loans – secured and unsecured loans.

Secured loans are collateral loans, which means, you can only apply for the loan if you have collateral that serves as the company’s “security” should you fail to meet your obligations. Meanwhile. Unsecured loans allow you to borrow money without the need for collateral.

It is important to understand both. However, today, we are going to focus on understanding what are collateral loans.

For your reference, here are the different points that we are going to tackle:

  • What is collateral?
  • How does collateral work?
  • What are the different types of collateral?
  • What is a collateral loan?
  • What are the different types of collateral loans?
  • How to apply for a collateral loan?
  • What are the pros and cons of collateral loans?

WHAT IS COLLATERAL?

Before we even talk about what collateral loan is all about, let us first define what collateral is.

The term collateral, according to Investopedia, refers to an asset that a borrower provides, while the lender accepts to serve as “security” for a loan.

Collateral comes in different forms depending on the type of loan, and also, depending on what the lender requires. It could be in the form of a real estate, vehicle, or other kinds of assets based on the purpose of the loan.

The collateral serves as a form of protection for the lending company in case the borrower defaults on their loan payments. Should that happen, the lender can seize the collateral in lieu of the missed loan payments. The lender will then have to decide whether to sell the asset or keep it.

HOW DOES COLLATERAL WORK?

When borrowing through a secured loan, normally, the borrower will have to go through a certain process wherein the lender will check if you have the ability to repay the money you are loaning for. And one of the factors that they consider, rather, the most important factor that lenders will look into is if you have collateral that will serve as security for the loan.

Generally, collateral helps minimize the risk for lenders. It gives them a sense of assurance that no matter what happens — especially if the borrower defaults — the lender has a sort of “security blanket” in the form of the borrower’s asset.

As mentioned earlier, in case the borrower does default, the lender will automatically have the power over the collateral. The lender could sell it and apply the money it gets to the unpaid portion of the loan. If for instance, the collateral is not enough to cover the remaining balance, the lender has the option to pursue legal action.

Collaterals come in different forms — it could be in the form of real estate, a car, etc. Usually, it relates to the nature of the loan, which we are going to talk about in detail later on.

Generally, secured loans or collateral loans are available in lower interest rates as compared to unsecured loans.

In addition, just so you know, a lender’s claim to a borrower’s asset, which was made collateral is called a lien. It basically refers to the lender’s legal right or claims against an asset to help satisfy a debt, according to Investopedia.

WHAT ARE THE DIFFERENT TYPES OF COLLATERAL?

Now, before we answer the question, “What are collateral loans?” Allow us to provide you first with the different types of collateral available and/or accepted by lenders when aiming to get a secured or collateral loan.

If you are a borrower, it is important that you know the different types of collateral so you get to determine if you can afford a secured loan or not.

As mentioned, any asset can serve as collateral — but that depends on the requirements of the lender. Thus, it is important that you ask your preferred lending company first what they do and do not accept as collateral before you apply for a secured loan.

Generally speaking though, lending companies or financial institutions prefer assets that are easy to value and turn into cash.

One perfect example is money in a savings account. It usually is great for collateral. Why? It is because lenders know how much their value is, and it’s very easy to collect.

Apart from that, here are some other forms of collateral:

  • Automobiles
  • Real estate (including equity of your home)
  • Investments
  • Insurance policies
  • Cash accounts (except retirement accounts – although there may be exemptions)
  • Machinery and equipment
  • Valuables and collectibles
  • Future payments from customers (receivables)

Please note that even if you are planning to get a business loan, personal assets may also be considered or part of a personal guarantee. Meanwhile, retirement accounts like IRAs are usually not allowed to serve as collateral.

In addition, we thought you might as well know that when it comes to valuing your assets, generally, lenders offer less than the value of the pledged asset. Some assets may even be heavily discounted. The purpose of doing this is that lenders will have more chances of getting all their money back just in case the investment loses value along the way.

As a borrower, it is important to keep in mind that in case your pledged assets lose value for whatever reason, there would be a greater chance that you might have to pledge additional assets to ensure a collateral loan in place.

Ideally, you must pay whatever you owe and keep your asset with you. That should always be the aim of any borrower of a secured loan. Otherwise, it’s much of a hassle really.

WHAT IS A COLLATERAL LOAN?

We always say this — loans are inevitable. All the more these days when times are really tough. Loans allow us to get through certain points in our lives — like emergency situations and money is scarce.

Good thing though lending companies and/or financial institutions do exist. While there is an easier way of getting a loan through unsecured loans, the downside is that it costs a lot.

But there is one more option available though that comes with better rates — secured loans or also known as collateral loans.

Based on the definition of what collateral is, a collateral loan refers to a type of loan wherein the lender requires an asset to serve as collateral. The collateral serves as the lender’s assurance that should the borrower do not meet his or her loan payment obligations, the lender can seize the collateral and sell it to recover some or all of its losses.

As compared to unsecured loans, secured loans or collateral loans do have lower interest rates. Needless to say, the requirements are less strict because collateral exists. Thus, this makes it ideal for people who have assets and are not afraid to lose their assets in case of default.

Before we move on, if you are seriously considering getting a collateral loan anytime soon, we suggest you check the video below by eHowFinance wherein they share about tips on collateral loans.

WHAT ARE THE DIFFERENT TYPES OF COLLATERAL LOANS?

Now that you already know what a collateral loan is all about, this time, we are going to talk about what are collateral loans – its types and a definition of each, of course.

While there are different types of collateral loans, below are some of the most popular examples of collateral loans:

  • Personal Loans
  • Auto Loans
  • Mortgages
  • Small Business Loans
  • Margin Trading

Personal Loans

While most personal loans are unsecured loans, there are also a couple of secured ones.

Generally, consumers use personal loans to consolidate existing debt, build credit, or finance everyday expenses.

As mentioned, personal loans come in two different types — secured and unsecured.

Just like any secured loan, personal loans are backed by collateral. By having collateral, it helps reduce the lender’s exposure to the risk of default.

More so, with secured personal loans, lenders are able to charge a lower interest rate as compared to unsecured personal loans.

Apart from a physical property like houses or vehicles, lenders also accept monetary assets such as savings, future paychecks, or investments as collateral for personal loans.

Auto Loans

Auto loans are one of the most common types of secured loans used by a lot of consumers.

For this particular collateral loan type, the asset being purchased, or the car that is being purchased is used as collateral for the loan.

It is usual to a lot of lenders mandating that assets be appraised to know the proper value of the collateral. This process helps lenders determine whether it is worth the approval of the loan or not.

Mortgages

Just like auto loans, mortgages are also another very common collateral loan type. Similar car loans, it also uses the asset being purchased as collateral for the loan.

When it comes to appraisal, as compared to auto loans, lenders are more strict in mandating that the property be appraised to determine the current value of the collateral.

The appraisal process is particularly important for mortgage applicants because lenders only approve home loans if the appraised value matches or exceeds the sale price.

Small Business Loans

If you have a growing business, and you need funds to help finance its needs, one of the most popular ways business owners do is to apply for a small business loan. Small business loans can be used for different reasons like financing office space, hiring new people, as well as in purchasing new equipment.

Normally, acceptable collateral for this type of loan includes future payments by customers, inventory, as well as real estate. Personal assets of the business owner/s may also be used to secure approval for this type of loan.

In some cases, there are lenders that require a “personal guarantee” from small business owners. This refers to a written promise or assurance that the borrower’s personal assets can be seized if the company fails to meet its financial obligations to the lender.

Margin Trading

Although this one’s not as highly popular as the previous ones, collateralized loans are also considered a factor in margin trading.

What happens is that an investor would borrow funds from a broker to buy shares. The investor will then use the balance in his or her brokerage account as collateral to the loan.

The loan helps increase the number of shares the investor can buy, which multiplies the potential gains in case of an increase in value.

The downside of this type of loan though is that the risks are also multiplied. This means, should the shares decrease in value, it is likely that the broker will demand payment of whatever the difference is, which means the account serves as collateral if the borrower is unable to cover whatever is lost.

HOW TO APPLY FOR A COLLATERAL LOAN?

Now that you already know some of the primary details on collateral loans, this time, we are going to look into the application process.

Generally speaking, the application process for collateral loans vary depending on factors like the type of collateral used, as well as the amount of the loan. Of course, where you apply for a collateral loan will also be factored in as some lenders have a very extensive application process, while others are not.

Just like any other loan application though, borrowers must gather some important documents that lenders need to proceed with the application. This includes documentation such as Social Security number, proof of income, as well as driver’s license and state ID.

Since this is a collateral loan, obviously, borrowers must also be able to provide documentation on the collateral itself like the title or deed for an auto or home loan. If in case the loan is secured by other personal property like bank accounts, insurance policy, or valuables, lenders may require borrowers to provide registration paperwork, photos, or other proof of ownership.

Once all necessary documents are ready, the lender or the financing company will then prepare the loan paperwork. They will also gather signatures from the borrower, and will also do a verification process to ensure the borrower’s eligibility for the loan. The verification includes credit scores, income, identity, as well as the ownership of the collateral.

When all the documentation is already gathered, all paperwork will then be sent through underwriting. Underwriting refers to a process that financing companies use to check on the risk associated with the loan. After this, the lender will make a decision about whether the application gets approved or not. Depending on the company,

Depending on the company, the underwriting process can take either a few minutes or several weeks, especially for mortgage loan applications.

As soon as the loan is approved though, financing companies issue check for the loan amount to the borrower.

WHAT ARE THE PROS AND CONS OF COLLATERAL LOANS?

There’s no such thing as perfect, right? The same philosophy goes to collateral loans, while it does have benefits, it also has its share of downfalls.

Having said that, here are some of the pros and cons we found with collateral loans:

PROS

  • It offers lower interest rates as compared to unsecured loans. The existence of collateral makes it possible for lenders to provide lower interest rates to borrowers of the loan. Lending companies are assured that even if the borrower does default, they will recover if not all, at least a portion of the loan through the collateral.
  • It can help build a borrower’s credit. Lenders report the payments you make to major credit bureaus. Thus, by making payments on time, a collateral loan can definitely help you build your credit score.
  • It provides loan opportunities for people with imperfect credit history. Because of the collateral, lenders are more willing to take a risk on borrowers with imperfect credit history. They are assured that no matter what happens, there’s collateral that will serve as the lender’s fallback.
  • It provides increased loan amounts. If a borrower does have extensive savings or a certificate of deposit, it would be easier for him or her to borrow larger amounts if need be.

CONS

  • The application process may take a while. Unlike unsecured loans, collateral loans require a lot of documentation. Needless to say, there’s a verification process as well. Thus, the whole application process may take a while.
  • Collateral can be repossessed by the lender due to default. Failure to pay the loan means the borrower will lose the asset, which was made as collateral to the loan. Once it is repossessed by the lender, the borrower automatically loses his or her ownership of the collateral.

FINAL THOUGHTS ON WHAT ARE COLLATERAL LOANS

To sum it all up, collateral loans are ideal for people who own assets that could serve as collateral to the loan. While it does have its risks, the fact that the interest is lower as compared to unsecured loans should make it a valuable choice among borrowers.

Have you thought of getting a collateral loan anytime soon? How do you find it so far?

We hope that through this, we were able to provide you essential information/answers to the question, “What are collateral loans?”