Same Day Business Loans
Get fast access to funds with a same day business loan.
Need fast cash to jump on a business opportunity or secure a good deal? Find out about same day business loans.
What's in this guide?
Timing is crucial in the business world. When time-sensitive opportunities arise, such as the chance to bid on a large contract or to buy stock or equipment at a discount, it can be devastating to miss out simply because you didn't have the cash on hand to take advantage of the opportunity.
Same day business loans can serve a variety of your business's needs, whether you need new equipment or additional staff to tackle a large new job or you want to take advantage of a short-term discount on stock. These loans can also be an option to consider if you need fast funds to cover an overdue tax debt or if you need to make urgent repairs or renovations. Read on to learn about the different types of same day business loans and how to apply.
Same Day Business loans you can apply for
What types of same day business loans are there?
Not all same day business loans are created equal. In fact, there are several different types of business funding that can give you access to fast money when you need it the most. When you're looking for same day business loans, consider which of the following loan types could be the best fit for your circumstances.
Unsecured business loan
An unsecured business loan is a short-term business loan with no security required. Amounts usually range from $5000 to $200,000 or more, with a loan period generally between 3 and 12 months. As an unsecured loan, interest rates can be higher than a secured business loan, but access to funds is usually quicker.
Line of credit
Similar to a credit card, a business line of credit gives you access to funds up to a certain amount, agreed in advance between yourself and the lender. One of the more flexible finance options, a line of credit gives businesses access to funds as needed. Interest rates can be high and are usually calculated daily, but the upside is that you'll only be paying interest on the amount drawn down at any time, not on the whole amount. The flexibility of a line of credit is a distinct advantage over an unsecured business loan, where interest is charged on the full amount of the loan, regardless of whether the funds are being used. A line of credit usually attracts ongoing fees, even when it is not being used.
With invoice factoring, businesses can sell an unpaid invoice directly to a lender (known as a "factor") at a reduced rate. Rather than waiting for your client to pay you directly, invoice factoring can ease your business's cash flow by giving you instant access to up to 80% of the value of the invoice upfront. Once your client pays the invoice, the factor will take their fee and release any remaining funds to you.
Merchant cash advance
If your business receives most of its income by credit or debit card sales, a merchant cash advance can be an excellent finance option. The lender will advance the loan amount to you upfront, with loan repayments and fees coming directly from your ongoing credit card sales until you have repaid the loan. The major advantage of a merchant cash advance is that the repayments are directly linked to your business's cash flow as a percentage of your daily card transactions. However, fees can be high, so this type of business funding can be one of the most expensive.
What types of businesses are eligible for a same day business loan?
- Big banks and other major lenders tend to be more risk averse and may only consider same day lending with established businesses in a strong financial position.
- Smaller businesses, businesses with poor credit and businesses without a long trading history are more likely to be approved by a smaller or independent lender than one of the big banks.
How do you compare your same day business loan options?
When you're looking for same day business loans, it can be easy to get caught up in the flurry of finding a lender willing to extend finance as quickly as possible. But before you choose a lender and sign a contract, take a few minutes to compare your options to find the right finance option for your circumstances.
Consider the following when comparing same day business loans:
- The total cost of the loan. While interest rates can seem like an intuitive way to compare loans, they don't show the full picture. A loan may offer a relatively low-interest rate but have high fees, ultimately increasing the overall cost of the loan. When comparing finance options, it is essential to look into all fees, charges and penalties in addition to the interest rate to calculate the full cost of the loan over the full loan term.
- Loan term. How long will you have to repay the loan, and how does this loan term relate to the purpose of the loan? If you're intending to purchase equipment with a three-year useful life, you probably won't want to still be paying it off in five years' time. On the other hand, a shorter loan term will inevitably involve higher payments, which can cripple your cash flow.
- Loan repayments. Tied in with the loan term, the ongoing repayments need to be high enough so that you're paying off the loan as quickly as possible, but not so high that the ongoing expenses hurt your cash flow.
- Security for the loan. Putting up a personal or business asset as security for the loan can attract interest rate discounts and favourable loan terms, particularly if you are offering a residential property as security. If you don't have an appropriate asset or aren't keen on the idea of tying up your personal assets with a business loan, be prepared to pay higher fees and interest rates.
What documents will you need to apply for a same day business loan?
When applying for any type of business loan, even a same day loan, you'll need to convince the lender that you are a good candidate for the loan and have the ability to make the ongoing repayments. This is especially the case with unsecured business loans, where the lender is taking a considerable risk in extending funds without having an asset to fall back on should you default on the loan. A business loan calculator can help you work out your ongoing repayments and ensure you can afford them.
Have the following documents on hand when applying for a same day business loan:
- Details about your business, including your ABN, address and time in operation
- Details about yourself and other directors or major shareholders, including a copy of your ID
- An idea of the amount of the loan and desired loan term
- Business bank statements for the last six months
- Credit card and merchant statements for the last six months, especially if considering a merchant cash advance
- The most recent financial statements for the business.
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