Understanding quick business loans
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Pages in this SectionWhat is a quick business loan?
A quick business loan is designed to provide immediate funding to businesses, addressing urgent financial needs without the lengthy application and approval processes associated with traditional bank loans.
Ranging from as little as £5,000 all the way up to £200,000, this type of loan suits SMEs with previous bad or no credit history.
How does a quick business loan work?
A quick business loan operates under a streamlined process, ensuring rapid access to funds for businesses in need. Here’s a breakdown of how these loans typically work:
Application: The process begins with a simplified online application, where businesses provide basic information about themselves and their financial needs. This step is designed to be quick and straightforward, often taking only a few minutes.
Documentation: Depending on the lender, minimal documentation may be required. This could include recent bank statements, proof of business registration, and financial statements. The aim is to verify the business’s operational status and financial health without extensive paperwork.
Approval: Leveraging advanced algorithms and technology, lenders can assess applications swiftly, often providing decisions within hours. This speed is a hallmark of quick business loans, differentiating them from traditional financing routes that can take weeks or months.
Funding: Once approved, funds are typically disbursed directly into the business’s bank account, sometimes as quickly as the same day. This immediate access to capital allows businesses to address their urgent needs without delay.
Repayment: Quick business loans come with varied repayment terms, often tailored to the business’s cash flow to ensure affordability. Repayment schedules can be daily, weekly, or monthly, with terms clearly outlined from the outset to prevent any surprises.
By prioritising speed and efficiency, quick business loans serve as a vital resource for businesses looking to swiftly address financial challenges or capitalise on immediate opportunities without the cumbersome processes associated with traditional lending.
Quick business loans vs. traditional business loans
Understanding the distinction between an instant approval business loan and a conventional business loan is key for organisations in urgent need of funds.
Quick business loans cater to those who require financial resources swiftly. The approval process is remarkably quick, often finalised in mere seconds, and the entire process is streamlined to ensure the fastest possible completion. Typically, these loans can disburse funds into the borrower's account in less than 24 hours, with potential loan amounts reaching up to £10,000.
Traditional business loans on the other hand, involve a more extensive application process. Applicants must submit a detailed application and provide various documents for the lender's consideration. This information undergoes a thorough evaluation by an underwriter, a procedure that could extend over several days or even weeks. Once the loan receives approval, there's an additional phase for signing and exchanging contracts before the funds are finally released to the borrower.
The entire process from application to fund disbursement in standard business loans usually spans 3 to 4 weeks. However, these loans often offer higher borrowing limits compared to instant approval loans, with the same ceiling of up to £10,000.
What are the advantages and disadvantages of a fast business financing solution like a quick business loan?
Advantages of quick business loans:
- Available on flexible terms ranging from one to 12 months
- Businesses can choose what they spend the money on
- Applications have no impact on credit rating
- Available to businesses with bad or little credit history
- Quick business loans are fast and easy
Disadvantages of quick business loans:
- Tend to be more expensive than traditional bank loans
- They can create potential for significant debt
Have you thought about invoice finance as a quick financing solution for your business?
Invoice finance allows you to release cash quickly from your unpaid invoices.
As your lender, we can release up to 90% of your invoices within 24 hours. On payment of the invoice from your customers, we will then release the final amount minus any fees and charges. There are different types of invoice financing options available such as factoring (mainly invoice factoring and debt factoring) and invoice discounting to businesses depending on the situation and the level of control they require in collecting unpaid invoices.
We are an invoice financing company who offer a solution whereby payments are collected on your behalf managed by our team of expert credit controllers so you can focus on running your business. Our confidential invoice discounting solution is offered to businesses who want to maintain their own credit control processes, therefore this remains strictly confidential so your customers are unaware of our involvement.
More business loan resources
The benefits of fast business financing companies such as Novuna Business Cash Flow
Want to understand more cash flow finance terms?
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