What are Easy Business Loans?
While there’s no standard definition of easy business loans, the general hallmarks include the following:
- Streamlined applications
- More flexible eligibility requirements
- Fast funding times
- Flexible repayment terms.
Traditional financial institutions, like banks and credit unions, often have strict approval requirements, such as a high minimum credit score for both personal and business credit. The application process is usually complex and requires extensive documentation. It can take weeks to get approval and additional time to receive the funds.
By contrast, online lenders (also called alternative or fintech lenders) are non-bank institutions that can circumvent traditional loan complications. Many online lending platforms use financial technology (fintech) solutions to streamline the application and underwriting processes. This allows most lenders to quickly review your credit report and revenue to make a fast decision.
The best online lenders and lending marketplaces offer applications you can complete in 5-10 minutes with minimal documentation. Many lenders will let you know if you’re approved within 24 hours, with several offering same-day approvals.
Once approved, an online lender can quickly transfer loan funds to your business bank account using fintech solutions. You can usually receive your money 24 to 72 hours after loan approval. Some online lenders also offer same-day funding.
The tradeoff for the speed and convenience of easy business loans is that they typically cost more than traditional financing. Depending on the specific product, the costs can run very high. However, you could justify those costs if you need fast funding and can’t qualify for a traditional business loan.
What are the best Easy Business Loan options?
One of the benefits of online lending platforms is that they offer a wide range of easy loan options. Choosing the best loan option depends on your needs and the repayment structures that are best for your cash flow.
Here are some of the best easy business loans to consider.
Business Term Loans
- Funding Amount: $5k-$10 million.
- Rates: Factor rates starting at 1%-4% p/mo
- Terms: 3 months – 10 years
- Speed: 1-3 business days
When most people think of business loans, they think of term loans. These are financing packages where you receive a large, one-time lump sum and repay it, plus interest and fees, in fixed monthly payments. Term loans typically offer fixed-rate financing.
You can use term loan funds for most business purposes, including working capital, business expansion, and business acquisition. In some cases, you can even use a business term loan for commercial real estate or refinancing business debt.
You might not immediately think of business term loans as “easy” since traditional lenders also primarily offer term loans. However, a term loan can become much easier with an online lending marketplace.
Business Lines of Credit
- Funding Amount: $1k-$1 million
- Rates: Factor rates starting at 1% p/mo
- Terms: Up to 36 months
- Speed: 1-3 business days
Business lines of credit are flexible financing structures that let you access funds only when needed. It operates like a credit card, providing a set credit limit for drawing funds. You only pay interest on the money you draw, so you could save on interest if you don’t use all the funds.
Business lines of credit through UCS are revolving, meaning your credit limit replenishes as you pay off the amount you’ve drawn. For example, if you drew $20,000 against a $150,000 limit and then repaid $10,000, your new full credit line and limit would be $140,000.
A business line of credit is an excellent option for ongoing projects, seasonal businesses, and covering unexpected expenses.
Equipment Financing
- Funding Amount: Up to $10 million per piece of equipment
- Rates: Starting at Prime + 6.5%
- Terms: 1-10 years
- Speed: 1-2 business days
Equipment financing allows you to acquire expensive business equipment and machinery you couldn’t afford to purchase out of pocket. It’s sometimes possible to finance 100% of the cost.
There is a wide range of business equipment, and nearly every industry uses some form of equipment. Some examples include computers, office furniture, restaurant equipment, construction and manufacturing machinery, fleet vehicles, gas station equipment, and more.
The equipment you’re financing acts as the collateral, which is known as a self-collateralized loan. You might be familiar with other self-collateralized loans, such as car loans or mortgages. This means you won’t have to put up any other business assets as collateral.
Merchant Cash Advance
- Funding Amount: $5k-$5 million
- Rates: Factor rates starting at 1%-6% p/mo
- Terms: 3-24 months
- Speed: 1-2 business days
Merchants who process a high volume of credit and debit card sales can typically count on future revenue from their sales. But what happens when you need capital immediately to pay for the inventory or cover other costs before those sales occur?
That’s where a merchant cash advance (MCA) comes in handy. This financing structure gives you a large lump sum upfront to cover your business costs. You repay the cash advance, interest, and fees with a percentage of your daily card sales.
The amount you receive is typically based on your average card sales. Since repayment is tied to your card sales, the amount you owe fluctuates with your incoming revenue. High revenue days result in a larger repayment, while low revenue days lead to a smaller repayment.
MCAs are one of the easiest business loans to obtain if you have a high card sales volume. Most MCA lenders accept low credit scores, and some don’t have any personal credit score requirements. You won’t need to provide collateral, but some MCAs require a personal guarantee.
Accounts Receivable Factoring
- Funding amount: $10k – $25 million
- Rates: Factor rates starting at 1% p/mo
- Term: Up to 24 months
- Speed: 1-2 weeks
Accounts receivable factoring, also called invoice factoring, allows small businesses to convert outstanding invoices into immediate working capital. This financing product requires working with a third-party financial institution called a factoring company.
When you factor receivables, you’re selling ownership of your unpaid invoices to the factoring company, which issues an advance based on the invoice value, called an advance rate. Your customers pay their invoices directly to the factoring company, which then sends the remainder to you minus its fees.
Revenue Based Financing
- Funding Amount: $5k-$5 million
- Rates: Factor rates starting at 1%-6% p/mo
- Terms: 3-24 months
- Speed: 1-2 business days
Revenue based business loans are similar to merchant cash advances, but they cover all revenue, not just credit card sales. A revenue-based business cash advance might make more sense than an MCA if you don’t process a high volume of credit card sales.
Working Capital Loans
- Funding Amount: $1k-$5 million
- Rates: Starting at Prime + 2.75%
- Terms: 3 months – 10 years
- Speed: 1-3 business days
Working capital loans are designed to help businesses manage expenses for day-to-day operations, such as payroll, rent, inventory purchases, and other short-term needs. Unlike loans for fixed assets or expansion, these loans focus on maintaining smooth cash flow and covering gaps between accounts payable and receivable.
They typically provide quick access to funds with flexible repayment options based on the business’s cash flow. Because they are intended for short-term use, working capital loans often have faster approval processes and fewer stringent requirements compared to traditional loans.
How do I qualify for Easy Small Business Loans?
Each lender and loan type carries different qualification requirements for credit approval. Knowing the requirements for each specific loan can help you prepare and qualify.
Here’s what you need to qualify for easy business loans through United Capital Source.
Business Term Loans:
- Minimum credit score: 550+
- Annual revenue: $75k+
- Time in business: 1+ years
Business Lines of Credit:
- Minimum credit score: 575+
- Annual revenue: $75k+
- Time in business: 1+ years
Equipment Financing:
- Minimum credit score: 475+
- Annual revenue: $250k+
- Time in business: 6+ months
Merchant Cash Advance:
- Credit score: 475+
- Annual revenue: $120k+
- Time in business: 6+ months
Invoice Factoring:
- Minimum credit score: 500+
- Annual revenue: $250k+
- Time in business: 1 year
Revenue-Based Financing:
- Minimum credit score: 525+
- Annual revenue: $120k+
- Time in business: 4+ months
How to apply for a Small Business Loan:
Follow these steps to apply for alternative business lending:
Step 1: Consider Your Needs
Before you begin the application process, take some time to make sure this is the right product for your individual needs. Will you be able to use the capital for your desired purpose? Is the repayment structure conducive to your cash flow? Do you know exactly how much funding to request?
Answering these questions ahead of time will make the rest of this process much smoother.
Step 2: Gather Your Documents
Documentation requirements vary depending on the loan you’re requesting. For example, invoice financing will require your A/R and A/P aging reports. A merchant cash advance requires your bank statements and credit card statements.
Regardless of the loan, expect to provide these basic documents during the application:
- Driver’s license
- Voided business check
- Bank statements from the past three months
- Financial statements
Step 3: Fill Out the Application
You can begin the application process by calling us or filling out our one-page online application. Either way, you’ll be asked to supply the information from the previous section along with your desired loan amount.
Step 4: Speak to a Representative
Once you apply, a representative will contact you to explain the repayment terms, interest rates, and terms you qualify for. This will ensure that there are no surprises or hidden fees during repayment.
Step 5: Receive Approval
If approved, funds should appear in your bank account in 1-10 business days, depending on your loan type.
What are the advantages of Easy Business Loans?
As their name implies, these business loans are easy to qualify for, apply for, and get your funds. The best business loans start with a simple application process with minimal documentation requirements.
The qualifications for approval are also significantly lower than those for traditional business loans. Most easy business loan lending platforms accept lower credit scores, shorter time in business, and lower annual revenue. For example, some traditional banks require a minimum credit score of over 680, two years in business, and $250,000 in yearly revenue. Some lenders might not set a minimum credit score depending on the product. Easy business loans often have lower credit score requirements or may not require business credit.
Alternative lending platforms can also let you know if you qualify sooner than traditional lenders. Instead of waiting in anticipation for days or weeks, you can typically receive an approval determination within 24 hours or even on the same day.
Some online lenders use AI to handle reviewing and approving applications. While this method does help streamline things, some small business owners prefer a more human touch in the lending process.
The best online lending platforms commit to customer service. You can get a dedicated account rep or loan executive to answer your questions, review your loan options, and explain your rates and fees, so you don’t have to worry about hidden costs. That service continues even after the loan is funded and during renewal.
Your loan funds also arrive sooner, typically via electronic transfer. In an ideal situation, you could spend 10 minutes applying on day 1, get approval, accept an offer on day 2, and receive your funds on day 3.
What are the disadvantages of Easy Business Loans?
The most significant drawback to easy business financing options is the cost. These loans will typically carry higher interest rates and fees than traditional loans.
While it’s not universally true, there tends to be a correlation where the easier a financing package is to obtain, the more expensive it is. For example, merchant cash advances are popular due to their relatively low credit score and time in business requirements. They are also one of, if not the, most expensive forms of business financing.
Many easy business loan solutions are short-term financing, which means they must be repaid within 3-18 months. Some might go up to 24-month terms. In addition, you’ll typically repay these loans with daily or weekly repayment schedules.
The short repayment terms and frequent payment schedules can combine for high payments that strain your cash flow. You should always exercise caution before agreeing to a loan and ensure your cash flow can handle the repayments.
Easy Business Loan Pros & Cons
Here’s a quick summary of the benefits and drawbacks of easy business loans.
Pros:
- Easy and streamlined online loan applications.
- Minimal documentation requirements.
- Quick turnaround on loan approval decisions.
- Fast and convenient funding.
- Multiple easy business financing options.
- Dedicated account representative.
Cons:
- Higher rates and fees than traditional business loans.
- The easier a loan is to get, the more expensive it tends to be.
- Most easy business loans are short-term financing.
- Short repayment schedules are common.
Frequently Asked Questions
Here are some of the most common questions about easy business loans.
How do I know if an Easy Business Loan is right for my business?
Several key factors determine whether an easy business loan is right for your business plan.
Sometimes, business owners can’t qualify for traditional bank loans or funding. Perhaps you used personal credit cards to launch your business, which may have negatively impacted your personal credit score. Or maybe you haven’t been in business long enough or don’t have high enough revenue to qualify for a conventional business loan. Regardless of why you can’t qualify, easy business loans were designed to solve this problem.
Easy business loans also make sense if you need fast funding. The turnaround times on approval and funding are significant advantages of these business loans. You might have to choose one of these small business loan options if your business needs to cover urgent cash flow gaps or take advantage of a time-sensitive opportunity.
Many online lenders also offer unsecured loans, meaning they don’t require collateral. These small business financing options can be valuable to companies that don’t have business assets to pledge as collateral. Secured loans offer lower interest rates, but approval takes longer due to the appraisal process for collateral.
Are SBA loans easy to get?
SBA loans can be easier to obtain than a traditional bank loan, but are far more difficult than most alternative loan options. The US Small Business Administration (SBA) runs the SBA loan program. But the SBA does not underwrite or fund SBA loans. Instead, borrowers apply to one of three types of lending institutions: commercial banks, credit unions, or alternative business financing facilitators like United Capital Source. Several lenders in our network offer SBA loans.
The SBA’s role is to approve lending institutions, set caps on what lending institutions can charge, and partially guarantee the loans, up to 85%. With backing from the federal government, SBA loan lenders have the security to offer higher borrowing amounts at lower interest rates and extended repayment terms.
Traditional lenders can slightly lower their qualifications since the SBA backs the loans. For example, a bank that usually requires a credit score of 700 for its term loans might accept a credit score of 675 for an SBA loan.
However, the credit score, time in business, and annual revenue requirements are much higher than those of alternative lenders. And the application process is tedious and time-consuming, whether you apply through a traditional or alternative lender for an SBA loan.
SBA loans also take a long time to approve and fund. Depending on the loan type, it can take anywhere from 30 to 120 days to complete the underwriting and issue the loan proceeds.
The SBA microloan is probably the easiest SBA loan program to obtain. Microloans are designed for startups and younger businesses. They typically have some of the lowest qualifications.
Can I get Easy Business Loans with bad credit?
Yes, it’s possible to get alternative business financing with bad credit. An easy business loan means it’s easier to qualify for than traditional loans, including those offered to small businesses with lower credit scores.
However, you should know that a low credit score typically translates to higher fees, even with easy business loans. One way to think of bad credit business loans is as a form of bridge financing.
You can get the funds to grow your business while repairing your bad credit score. You would then theoretically achieve the time in business, revenue, and credit score necessary to obtain more advantageous funding, such as an SBA loan.
When should I consider alternatives to Easy Business Loans?
Suppose you’re running an established business with predictable revenue streams and have a good to excellent credit score. In that case, you can likely find less costly financing options than an easy business loan. You could also get an easy business loan with much more favorable rates and terms if you still need fast funding.
Small business credit cards are another option. These are often easier to obtain than alternative business loans, providing quick access to small business funding. Some business credit card issuers offer additional business resources to help with smarter financial decisions.
Easy Business Loans – Final Thoughts
Many alternative lending options make the process of obtaining funding for your business much easier than traditional loans. You can typically count on a quick and simple streamlined application, fast decisions on approval, and getting your money within a few days to help your business grow.
While there’s a lot to like about easy business loans (who doesn’t like easy?), the convenience and brevity of obtaining them come at a premium. However, the cost might be worth it if you need fast funding and don’t have the qualifications to get a traditional loan.
You should always run the numbers before agreeing to a loan to ensure your cash flow can handle the repayment structure. Look for easy loan lenders who are transparent about the costs and provide all fees and interest rates upfront.
Contact us to learn more about how easy it could be to fund your business or to apply for a small business loan. Our loan executives can answer any questions and help you find the best financing program to meet your business needs.
