Emergency Small Business Loans For Good and Bad Credit

It’s almost inevitable that at some point in a business’ operation, something unexpected will happen. Whether that’s a natural disaster or an unanticipated breakdown of machinery, things can get serious fast. While you might have an emergency fund ready to cover small things, it could be more difficult to cover major expenses. That’s where urgent emergency business loans come in. A fast emergency business loan can give you quick access to cash to fill that financial gap.

Important Notice: For SBA Paycheck Protection Loans consider Fundera

What is an emergency business loan?

An emergency business loan is a form of financing that is used to manage last-minute or urgent expenses. The loans are usually issued in one lump sum, with borrowers making repayments, along with interest and fees, in regular monthly, weekly or daily payments. Quick business loans can also come in the form of a merchant cash advance, which is repaid from a percentage of the business’ credit or debit card sales, or a business line of credit, which allows borrowers to only pay for what they use.

What type of emergencies can a business loan be used for?

A business loan can be used for a variety of emergencies, including unexpected repairs, equipment failures, and natural disasters. In the event of an emergency, a business loan can provide the financial assistance you need to keep your business up and running. 

Unexpected expenses related to business

Businesses have a lot of demands and associated expenses. There are the regular, ongoing costs of rent, utilities, insurance, wages, etc. But then there are also the unexpected expenses that can pop up at any time. A business loan can help to cover these unexpected costs, as well as provide extra funds during trying times. In this way, a business loan can be used for a variety of purposes, all of which help to keep the business running smoothly.

Seasonal dependencies 

Many businesses experience peaks and troughs throughout the year, depending on the seasonality of their products or services. 

As a result, they may find themselves in need of extra financial assistance at certain times of the year. A business loan can provide the funds necessary to cover these seasonal dependencies. In some cases, the loan may be used to purchase inventory ahead of a busy period. In other cases, it may be used to cover the cost of additional staff during peak times. 

By carefully managing their cash flow and using a business loan when necessary, businesses can avoid falling into financial difficulty.

Demand increase

If there is a sudden increase in demand for a company's products or services, a business loan can help to fund the additional inventory or staff necessary to meet the increased demand. Additionally, a business loan can be used to cover the costs of unexpected repairs or renovations. Having access to emergency funding can help a business to avoid financial hardship during times of unexpected turbulence. Consequently, business loans can provide an essential safety net for companies of all sizes.

How much can I borrow towards an emergency expense?

Asking how much you can borrow towards an emergency expense is like asking how long a piece of string is! The answer really depends on your individual circumstances. If you have a good credit history and strong income, then you may be able to borrow a significant amount. 

However, if you have poor credit or are unemployed, then you will probably only be able to borrow a small amount. In general, the more assets you have and the better your financial situation, the more money you will be able to borrow in an emergency. However, it is always best to speak to a financial advisor before taking out any loans, as they will be able to assess your individual circumstances and provide tailored advice.

Type of financing options for emergencies

In today's business world, having access to capital is essential. But when an unexpected expense pops up, it can be difficult to get the financing you need. 

Online business lenders

Online business lenders offer a variety of financing options for businesses of all sizes. From short-term loans to line of credit, they can provide the capital you need to cover your emergency expenses. And because they use alternative data sources to assess your creditworthiness, you can qualify for financing even if you have less-than-perfect credit. So if you're ever faced with an unexpected financial emergency, don't hesitate to turn to an online business lender for the financing you need.

Merchant cash advance

Another option is a merchant cash advance. With this type of financing, you receive a lump sum of cash upfront in exchange for agreeing to repay the amount plus interest and fees over time, typically through a percentage of your daily credit card sales. This can be a good option if you have consistent sales and can afford to make the payments. 

» MORE: Merchant Cash Advance

Personal loans

Another option is a personal loan from a bank or credit union. Personal loans usually have fixed payments over a set period of time, so they may not be as flexible as a merchant cash advance, but they can often be obtained at a lower interest rate. Whichever option you choose, make sure you understand the terms and conditions before signing any agreements.

SBA disaster loan

The SBA offers disaster loans specifically for businesses and homeowners who have been affected by a natural disaster. While the interest rate on these loans is often higher than on traditional loans, the terms are typically more flexible, making them easier to repay. 

» MORE: Compare SBA Loans

Invoice factoring

Invoice factoring is a type of financing that allows businesses to sell their invoices at a discount in order to get immediate cash. This can be a helpful way to improve cash flow and avoid taking on debt. Furthermore, it can be easier to qualify for than a traditional loan, making it an ideal option for businesses that have difficulty obtaining financing.

» MORE: Invoice Factoring Rates and Terms

Can I get emergency business funding with bad credit?

Although having a great credit score will vastly improve your chances of being approved for an affordable loan with a low rate, it’s still possible to find a loan with bad credit. Some lenders have lower credit score requirements, while others take a holistic approach to evaluate your application and have no minimum required score at all. Regardless of what your financial qualifications look like, you can likely find some form of funding that suits your business.

» MORE: Bad Credit Business Loans

How much do you need down for a small business loan?

Not all small business lenders require a down payment; Most online lenders have an annual revenue requirement and base their decision off of that. However, depending on the size of the loan, some lenders may require borrowers to commit to a UCC-1 lien, or collateral agreement. This means that the lender can take some portion of your assets, either personal or business in case you default on the loan.

Are there alternatives to emergency business loans?

If you're a small business owner in need of financial assistance, you may be considering taking out an emergency business loan. However, there are a few alternatives to traditional loans that you may want to consider first.

Business credit card

One option is to apply for a business credit card. While credit cards typically have higher interest rates than loans, they can offer more flexible repayment terms and may be easier to obtain. Another option is to seek out investors or crowdfunding sources. This can be a great way to get the money you need without taking on debt. Of course, every situation is unique, so be sure to explore all of your options before making a decision.

Personal loans to cover emergency expenses

Personal loans typically have lower interest rates and more flexible repayment terms. As a result, they can be a much better option for businesses in need of financial assistance. 

What is the average interest rate on an emergency business loan?

The average interest rate for an emergency business loan is typically higher than the interest rate for a traditional business loan. Usually, that’s somewhere in the neighborhood of 5.5 to 8%.

This is because emergency loans are often given to businesses that are in dire financial straits and may not be able to repay the loan in full. As a result, lenders charge a higher interest rate to offset the risk of default. However, the exact interest rate will vary depending on the lender, the amount of the loan, and the financial condition of the business. 

For businesses that are struggling but have some collateral, such as property or equipment, the interest rate may be lower than for businesses that don't have any collateral. In any case, it's important to shop around for the best deal and to make sure that you can afford the repayments before taking out an emergency loan.

What credit score do I need to obtain emergency business financing?

There are many factors that lenders consider when making a loan, but one of the most important is your credit score. A good credit score indicates to lenders that you're a responsible borrower who is likely to repay your debt on time. 

The higher your credit score, the more likely you are to be approved for a loan with favorable terms. So, what credit score do you need to obtain emergency business financing? While there's no universal answer to this question, most lenders will look for a score of at least 620. 

However, the higher your score, the better your chances of being approved for a loan. If your credit score is below 620, you may still be able to get a loan, but you may have to pay a higher interest rate or provide collateral. Regardless of your credit score, the best way to improve your chances of being approved for a loan is to communicate with your lender and provide as much information as possible about your financial situation. By doing so, you'll increase your chances of getting the funding you need when you need it.

What is the easiest business loan to get with bad credit?

LendingExpress offers business loans between $5,000 and $500,000, with no credit score requirement. If you have high annual revenue and an established business, this lender may be willing to work with you, even if you have a poor credit score.

Additionally, you may want to look into short-term loans if you have bad credit. Because these loans are repaid within a short period of time, ranging from a few weeks to a few months, lenders are more willing to work with high-risk borrowers. If you don’t qualify for a short term or regular term loan, you can also look into a merchant cash advance. However, this form of funding can be one of the most expensive forms, so make sure to only take this route if you’ve exhausted all other financing options.

Are emergency business loan funds available instantly?

Many online lenders will disburse funds within just a few minutes or within a business day. In this article, we’ll take a look at some of those lenders that will provide you with almost immediate access to cash.

Emergency Loan Options for New Businesses - Quick & Urgent

LendingExpress

LendingExpress’ minimum required time in business is just three months if you make $10,000 or more in monthly revenue, or six months if you make between $3,000 and $10,000 per month.  Additionally, the platform takes a holistic approach to its application evaluation process, and has no minimum credit score requirement. This loan marketplace connects borrowers to products ranging between $5,000 and $500,000, with repayment terms ranging between three months and 10 years.

Kabbage

To qualify with Kabbage, your business should have at least a year of operation under its belt. This lender offers business loans with amounts ranging between $2,000 and $250,000, and APRs starting at 24% with a maximum of 99%. Their loan terms come in periods of six, 12 or 18 months, and their minimum credit score is just 560. If you’re facing a financial emergency, you may be able to find a loan that funds within as little as a few minutes with this lender.

» MORE: Kabbage Loans For New Businesses

Lendio

This loan-matching platform requires just six months in business and a credit score above 550. Borrowers can access loans of up to $500,000, and some of its products can fund as soon as the next business day.

Best Emergency Short Term Business Loans

LoanBuilder

LoanBuilder is a lending service that is operated by PayPal and gives borrowers access to loans of up to $500,000. To qualify, you should be a PayPal user and have a monthly revenue above $3,500. Most of their repayment terms range between 13 and 52 weeks, with funds becoming available within as little as one business day.

OnDeck

OnDeck’s loans range between $5,000 and $500,000, with APRs as low as 16.7% and as high as 99.6%. Their minimum credit score requirement is just 500, and their loans can fund as soon as the next business day. However, this next-day funding time isn’t guaranteed, so if you need cash within 24 hours, you might want to consider another lender.

» MORE: OnDeck Short Term Business Loans

CAN Capital

CAN Capital offers a quick and easy application process, with funds becoming available within a short window of time. Their loans range between $2,500 and $250,000, the repayment must be made within a maximum of 24 months.

Long Term Business Loan Options

FundingCircle

Funding Circle’s loans range between $25,000 and 500,000, with APRs starting at 7.4%. To qualify, borrowers should have at least two years in business and credit scores above 620. Their loans typically fund within ten business days, but borrowers have anywhere between six months and 10 years to repay the loan.

» MORE: FundingCircle Business Loans For Fair Credit

Fundation

Fundation offers loans ranging between $20,000 and $500,000, with APRs as low as 8% and as high as 30%. Their loans typically take around one to three business days to fund, and come with repayment terms ranging between one and four years.

» MORE: Fundation Business Loans Review

What are other ways to get emergency funding fast?

If you’re having trouble qualifying for loans or some just look too expensive, you still might have other options. In addition to applying for loans specifically for businesses, you can apply for a personal loan yourself and use the funds to pay for your urgent expenses. You can also look into invoice financing services that will buy your unpaid invoices, immediately disburse a portion of the funds, and reclaim the cash that was borrowed once the invoices are paid.

Lastly, if you have a friend or family member who is willing to help you out, you also might be able to cover some of your expenses by borrowing from a person instead of a company.

Tips to qualify for emergency business financing 

If you're in need of emergency funding, there are a few things you can do to increase your chances of being approved for a loan.

First, be sure to put together a strong business plan. This should include a detailed description of your business, your financial projections, and your collateral. Lenders will want to see that you have a clear idea of how you'll use the loan and that you have a solid plan for repayment.

Second, don't be afraid to shop around. There are many lenders out there, so it's important to compare interest rates, terms, and conditions before making a decision. Be sure to read the fine print so that you know exactly what you're agreeing to.

Third, be prepared to offer collateral. This could include property, equipment, or even accounts receivable. Having collateral will give lenders more confidence in your ability to repay the loan.

Following these tips can help you qualify for emergency business financing and get the resources you need to keep your business afloat during tough times.

How to get emergency business financing fast

When your business is in need of emergency funding, you may not have the luxury of waiting around for a traditional bank loan. Fortunately, there are a number of alternative lenders that can provide fast financing when you need it most. Here are a few tips on how to get emergency business financing fast:

• Shop around: With so many lenders to choose from, it’s important to compare rates and terms to find the best deal.
• Consider online lenders: Online lenders often have a quicker approval process than traditional banks.
• Know what you need: Be prepared to answer questions about your business and why you need funding.
• Have collateral: Many lenders will require collateral, such as business equipment or real estate, in order to approve a loan.
• Be willing to pay higher interest rates: Because of the risk involved, emergency loans often come with higher interest rates than traditional loans. However, if you are able to repay the loan quickly, the overall cost will be relatively low.

By following these tips, you can increase your chances of getting emergency business financing fast.

Whether a natural disaster or another unexpected emergency, it can be stressful for a business owner when significant emergency expenses pop up. An emergency business loan is one way to access the short-term funding you need for a business emergency. With so many different lenders, finding the best option for your business is important.

When an emergency hits your business, your time is valuable. At PrimeRates, you can receive personalized emergency business loan offers through a quick and straightforward pre-application online process. Read on to learn more about quick emergency business loan funding.

When should you consider an emergency business loan?
Emergencies can vary in the form of a cashflow jamb to a natural disaster and beyond. If there’s a pressing or urgent need for cash, it can be tempting to choose the first loan offer that comes your way, but this is a big mistake. Do your best to slow down and carefully consider your options. With several different business loan options, you should consider which product will work best for your business and determine how much you can repay without jeopardizing your business.

One of the common reasons a business needs an emergency business loan is if your region is dealing with a natural disaster like a hurricane or winter storm. These uncontrollable events can cause damage to your business, and you might have to repair or replace fixtures, equipment, or the structure of your business. A small business loan can help access funds to get your business up and running again quickly.

Another reason you might consider an emergency business loan is if you’re failing to maintain your business during slower periods of time. This could result in you failing to make payroll, pay operational expenses, or cover sudden changes in your business operation. In this case, an emergency business loan would allow you to stay in business while repaying the loan and garnering more profit.

You should consider an emergency business loan if your business needs funds quickly to survive or get back on its feet.

What should you ask yourself when considering an emergency business loan?
As with any type of lending, you should take some time to really consider the pros and cons of adding additional debt to your business. Here are some questions to ask yourself when considering an emergency business loan.

• How much money do I need, and what can I afford to pay back? As with any debt, there are serious consequences if you fail to repay your loan. That’s why it’s crucial to sit down and examine your finances to ensure you’re only borrowing what you need.
• Is this a one-time expense? Or will I need recurring funding? Depending on what you need the money for, you should plan exactly how you’ll use the capital. This will ensure you only borrow what you need and it’s used appropriately.
• What loan terms make the most sense for my business? Emergency business loans are a popular loan offered by several financial institutions. With so many options, shopping around for the best rate and terms for your situation is essential. With PrimeRates’ easy-to-use application process, you can quickly look at offers from several lenders within minutes.
• Is this caused by a natural disaster? If you need money to recover after a natural disaster, you should consider looking at government-provided loans from FEMA and the SBA. While these loans have lower interest rates, it can take longer to get the funds from them — something you should consider if applying for these government loan programs.
• Do I have the right credit to secure a loan? While requirements will vary from lender to lender, you should have a basic understanding of your personal and business financial qualifications. Lenders will likely want to know your personal credit score, the revenue and profits of your business, and how long you’ve been in business. Make sure you have access to the proper documentation, like business and personal bank statements and tax returns.

How do you find the right emergency business loan for you?

There are several emergency business loans to consider depending on your situation and what type of funding you need.

#1. Business Term Loan: A business term loan is one of the quickest and simplest ways to get funds through a traditional financial institution or an online lender. In this type of emergency business loan, you will get a lump sum of cash that you pay back on a fixed schedule with a fixed interest rate. This loan is good for business owners who need a one-time lump sum for a specific purpose. Plus, depending on the lender, you can access the funds within a day or two. You can shop for a business term loan from several online lenders using PrimeRates, helping to save you time and money.

#2. Business Line of Credit: You can obtain a business line of credit similar to a home equity line of credit. This lending product allows you to draw from a bank of funds, and you’ll only have to pay interest on what you use — not the entire lump sum. While this type of loan sometimes has lower funding limits, they often use revolving terms, meaning you can continue to borrow while you repay as long as you don’t go over your established credit limit.

#3. Merchant Cash Advance:  Another expensive but convenient emergency business loan option is a merchant cash advance. Often called an MCA, this lending product involves getting a lump sum of money and repaying the loan through your daily credit card sales. One of the biggest advantages of this loan is that it is widely available through online lenders, and you can get access to funds quickly. Since it’s repaid through credit card sales, this is a good option for businesses with consistent business. While it’s a convenient option, it’s also one of the most expensive, with interest rates reaching up to 30% sometimes. This can make it difficult for business owners to repay and should often be considered a last resort.

#4. Invoice Factoring: Invoice factoring is an emergency business loan that involves leveraging any outstanding or unpaid invoices to get an advance on that cash. In this circumstance, a business will “sell” their unpaid invoices to a factoring company, and in exchange, you’ll get a percentage of the invoice upfront. Then, the factoring company will collect the payment from the customer, and you’ll receive the remaining amount minus the fees once it’s been paid.

#5. SBA Disaster Loan Program: Lastly, there are government emergency loans through the U.S. Small Business Association. These federal loans are a part of the SBA disaster loan program and can be used when there has been a declared emergency disaster scenario like a natural emergency or economic crisis. While these are affordable, low-interest options, the process can take weeks compared to days with the other private options.

What can I use an emergency business loan for?

Once you obtain an emergency business loan, you can use it for a variety of things like:

• Replacing broken equipment
• Restocking damaged inventory
• Covering payroll or other bills during a period of a business slowdown
• Marketing or advertising expenses
• Covering legal expenses or insurance payouts from a judgment
• Repairing the structure of your business

Unlike some other loan types, you might have to indicate what you’ll use the loan for, and how you plan to repay within the agreed-upon timeline.

Where can I get an emergency business loan for coronavirus?

When the COVID pandemic hit in 2020, businesses scrambled to get funding and support from government and private lending institutions to help them stay afloat. These small business relief programs provided money to pay various expenses like paycheck protection, business expenses, and more. However, as of January 2022, the U.S. Small Business Association has stopped offering emergency business loans for the coronavirus. Businesses that need emergency funding must apply through private institutions or other venues outside the SBA.

While the SBA isn’t accepting any more COVID-related loan applications, they are still accepting PPP loan forgiveness applications. This will provide loan forgiveness to borrowers who needed to cover paychecks for employees during the COVID crisis.

Does the SBA offer emergency business loans?

While the SBA is no longer offering COVID-relief loans, they still provide emergency relief business loans after a declared natural disaster. These low-interest disaster loans help businesses and homeowners recover from declared disasters like hurricanes or fires.

The SBA emergency business loans will cover:

• Losses not covered by insurance or funding from the Federal Emergency Management Agency for both personal and business
• Business operating expenses that were lost as a result of the disaster

When you need access to business capital fast, an emergency business loan is a reliable and quick solution. As you consider the different loan products, make sure you take into account the type of expense and how you plan to pay back the loan. Shopping around to find the best rates and terms will help you understand how much you can afford and what your options are.

With the online application process at PrimeRates, you’ll be able to find the best option for you and your business, ensuring you can navigate unexpected expenses with ease.

Ready to get started? Receive emergency business loan offers within minutes! #PrimeRatestotherescue

Conclusion

Dealing with a financial emergency is tough. It requires business owners to think quickly and make fast decisions. That doesn’t mean that you should agree to borrow from the first lender who makes you an offer, however. Take the time to fill out multiple applications with online lenders before taking the first loan offer. As many applications only take a few minutes to complete, devoting that extra half hour to evaluating your options can save you thousands of dollars down the road.

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