Fast Business Loans: The Top Pros And Cons You Must Consider
We help you choose the business loan that is perfect for your needs. IIFL Finance highlights the pros & cons of fast business loans. Visit to know!
At some point, your business will need fast access to capital—whether it’s because of an emergency or to meet your daily working expenses. Waiting months or weeks for a loan approval could hurt your business. Fortunately, you can take advantage of fast business loans.You can apply for these loans and receive funding within hours, even with a bad credit score. This blog post examines their pros and cons to help you make an informed decision about quick business loans.
The Pros Of Fast Business LoansSmall business owners can benefit from business loan instant approval in several ways.
1. Quick DisbursalAn obvious benefit of this business loan is that it provides fast funding. With quick access to money, you can pay for any expenses you need to cover for your business at the earliest.
2. Easy Application ProcessGetting a quick business loan is often straightforward. In most cases, the application will take only a few minutes to complete. Additionally, you might need to provide bank statements to speed up the process.
3. No CollateralMany lenders offering fast business loans do not require collateral. Therefore, you don't need to pledge collateral, such as commercial property or equipment, to secure your loan. Small businesses that do not own many assets or can't risk losing them will benefit from this loan.
4. Minimal RequirementsYou can get approved for a fast business loan even if you don't have the best business or personal credit score. Most lenders offering them are flexible with their requirements and willing to take a risk on borrowers.
The Cons Of Fast Business LoansThe idea of fast business financing sounds excellent. Apply for a loan, get approved, and you'll receive your money within a few hours or days. Fast business loans, however, do have some drawbacks.
1. Limited Lenders Offer ThemAll lenders do not offer fast business loans. As a result, finding lenders who offer them will require some research. It is noteworthy that banks, credit unions, and the Small Business Administration are unlikely to offer fast business loans. Online lenders typically provide these loans to businesses.
2. Various Fees May ApplyBorrowers often have to pay prepayment fees, origination fees, and other fees to lenders. These charges increase your loan's overall cost.
3. They Have Higher Interest RatesA collateral-free business loan can be risky for lenders. As a result, a quick business loan may have a higher interest rate to offset the risk. If your credit score is good, you could qualify for traditional small business loans at a lower interest rate.
4. They Generally Offer Low Borrowing AmountsA fast business loan may not be appropriate for big expenses like a commercial vehicle or equipment. The sanctioned amount is smaller than a traditional business loan.
Get A Business Loan From IIFL FinanceIIFL Finance offers fast business loans to companies with immediate financial needs. The EMIs are low, the interest rate is competitive, and the repayment terms are convenient, enabling your business to grow quickly. We offer 100% online applications and disbursements. Reach out to our support team if you have any questions regarding loans.
Frequently Asked Questions
Q1. How fast can I get a business loan?
Ans. Usually, there is a 24-hour funding turnaround time for fast business loans. Sometimes, it may be shorter.
Q2. Can you get a fast business loan without a good credit score?
Ans. Yes, you can get a quick business loan without a good credit score, but the interest rate may be high.