When your small business is struggling financially and you require money really quick, the first thing you might do is to look out for quick business loans for startups.
Fast or quick business loans are usually referred to as short-term financing options. These loans have high-interest rates with a funding speed of 1-3 business days.
Listed below are 5 quick business loans for startups.
OnDeck works best for companies that need revenue of up to $500k within 1 – 3 days. OnDeck has the best potential rates for you if you are a strong borrower. Qualification requirements for OnDeck loan are very low. You can take up to three years to repay the loan with weekly repayment facilities.
The way to calculate OnDeck costs is through annual percentage rate (APR), which encompasses all fees lined to your loan amount. In the case of OnDeck loan, you are expected to repay the fully amortized amount irrespective of whether or not you pay it off early.
The APR is 30 – 50%. In fact, the interest rate for prime borrowers can dip as low as 9.99%.
Kabbage is one of the best options for quick business loans for startups. It is similar to a line of credit and suits businesses that can pay back only on monthly repayment terms. Kabbage offers monthly repayment facilities on all loans and also provides the freedom to draw against a credit line only when required to do so.
Kabbage pricing is similar to OnDeck, but without any special rate for prime borrowers. 1.5 – 10% of your monthly balance is the price charged, and the average fee is 4% for a 6-month repayment term. They charge you 3% for a 12-month repayment term. Moreover, Kabbage has no prepayment penalties.
The APR, like OnDeck is 30 – 50%
Credibly must be your last option. It is best suited for companies that take a lot of debit and credit card receipts each day. Credibly is far too expensive since your payments will vary depending on the amount of returns that you bring in daily, based on your daily repayment percentage.
It is extremely costly and is similar to a merchant cash advance. While the APR is 80 – 120%, the daily repayment percentage is between 8% and 30% of daily credit card sales.
LoanBuilder is an excellent choice for quick business loans for startups. It is a great option for businesses that haven’t been in business for at least a year and require a revenue amount of $5k-$500k in 1-3 days. You can qualify for a loan from LoanBuilder even if your credit score is only 550. The loan tenure is one year.
LoanBuilder’s pricing is Total Interest Charge. This is inclusive of the APR and all fees for the loan. In regards to loan repayment for LoanBuilder loans, you must repay the total interest charge no matter whether you pay it off early or not.
The total interest charge is 25% – 50%
Business Line of Credit
In the case of a business line of credit, you will always have a certain amount of money to borrow as and when you require it. It can be either for an emergency or any other reason as long as you haven’t saturated your borrowing limit.
A business line of credit enables you to pay interest on the borrowed amount. However, at the same time, you have access to extra funds even if you haven’t applied for another loan.
A business line of credit comes with a disadvantage too. A lender can choose to reduce or altogether close your line of credit anytime because of which you might not have the required funds when you need them.
With a business line of credit, you can get a fast business loan amount of $10,000 to $1 million. You can them repay the loan in a period ranging from 6 months to 5 years.
The interest rate is 7% to 25%.