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Comparing Banks vs. Alternative Lenders
In the dynamic world of business, opportunities and challenges can arise unexpectedly, and having the immediate financial resources to address them promptly can be the key to success in a highly competitive environment. Unfortunately, traditional banks and loan processes fall short when it comes to quick financing. They tend to be lengthy and cumbersome, often taking weeks and even months to deliver the funds to your account - a turnaround that may cause you to lose time-sensitive opportunities or fail to address your urgent needs. This is where same-day business financing steps in, offering a rapid and efficient solution to meet your immediate capital needs. But what exactly is same-day financing, and how does it work? Continue reading to find out.
What Is Same-Day Financing?
Same-day financing is a financial tool designed to provide you with immediate access to funds, typically within 24 hours of application approval. It can be used to address urgent business needs, such as cash flow gaps or unexpected expenses. It can also be used to seize timely opportunities. Unlike traditional loans, which are associated with complex application processes that may take months to complete, same-day business financing offers a streamlined application process with minimal paperwork and rapid disbursement.How Does Same-Day Financing Work?
The exact process of same-day business financing may vary by lender. With National Business Capital, the process is as fast and streamlined as it can be - here’s how it looks:- Apply Within Minutes - With NBC, you can begin your process within minutes - the application form is straightforward, requiring basic business information, financial details, and the purpose of the loan. Apply here.
- Provide Documentation - Unlike traditional loans or applying through banks, minimal documentation is required for same-day business financing. Common documents include bank statements, proof of business ownership, and recent financial statements.
- Review Your Offers - Compare your offers with expert advice from our team and select the best one for your specific circumstances. Our diverse lender platform gives you access to dozens of exclusive offers.
- Wait For Approval - National Business Capital evaluates applications swiftly and approves 90% of all applications, so you have a high chance for approval even if your credit score is less-than-perfect. We will assess your creditworthiness, business performance, and financial health.
- Receive Your Money - Once you’ve been approved, you will get your funds in just a few hours, allowing immediate access to capital.
How Fast Can I Get Financing?
Comparing Banks vs Alternative Lenders
As we mentioned earlier, traditional banks are anything but fast when it comes to financing, and you can’t expect a lot of options if you are looking for same-day business financing. They typically have a long and extensive application process which requires detailed documentation, including:- Business Plan - An overview of the business, including company details, market analysis, product line or services, as well as projected income statements for the next 3-5 years
- Financial Statements - Including profit and loss statements, balance sheets, cash flow statements, as well as statements of changes in equity
- Tax Returns - Business tax returns for the past 2-3 years, as well as personal tax returns for the same time period. This provides the bank with a clear view of your revenue, expenses, and profitability.
- Personal Information - Banks will often ask for personal financial information as well, including assets, liabilities, income, and expenses. They will also need a report detailing your personal credit history, as well as collateral documentation.
- Additional Documentation - In some cases, you may be asked for additional documentation, including business licenses and registrations, articles of incorporation, legal contracts, and resumes of key management.
What Is the Maximum Amount That I Can Get With Same-Day Business Financing?
The maximum amount you can get with same-day business financing typically ranges from $5,000 to $500,000, depending on the lender and your business’s qualifications. Of course, it is possible to get higher amounts if you have a good financial profile. Alternative lenders, who offer these quick financing options, assess factors such as your business revenue, credit score, and overall financial health. While the exact amount varies, larger sums usually require stronger financial profiles and documentation.What Are the Different Types of Loans Available for Same-Day Business Financing?
If you are looking for same-day business financing, there are multiple types of loans that you can choose from depending on your needs and goals. Here are some of the most common options offered by alternative lenders:- Short-Term Loans - Business term loans provide you with a lump sum of money, which you have to pay back over a short period of time, typically 3 to 18 months.
- Business Line of Credit - If you are looking for same-day business financing, you can also opt for a business line of credit, which allows you to draw funds up to a certain limit. You only pay interest on the amount you draw.
- Revenue-Based Financing - This type of same-day business financing provides you with a lump sum of cash in exchange for a percentage of future sales. Repayments are typically made daily or weekly, based on a percentage of the business’s daily credit card sales.
- Equipment Financing - If you need to purchase or lease equipment, equipment financing is another quick way to get extra funds. The equipment itself often serves as collateral for the loan, which can expedite the approval process.
- Bridge Loans - Bridge loans provide temporary financing until a more permanent financing solution is secured. These loans can be processed quickly, offering immediate funds to cover short-term gaps.
What Are the Main Characteristics of Same-Day Business Financing?
While the exact characteristics of same-day business financing may vary by the type of loan, this financial tool is typically associated with the following:• Simple & Streamlined Application
As opposed to traditional loans, which have a complex and lengthy application process, same-day business financing is typically associated with a more simple and streamlined application process. It requires minimal documentation, and you can typically do it online for maximum convenience.• Flexible Repayment Terms
Most types of same-day business financing is designed for short-term needs, with repayment periods ranging from a few weeks to a few months. You can negotiate with the lender to make repayments daily, weekly or monthly, or they can be linked to your business revenue stream (for example, in the case of merchant cash advances).• Credit Flexibility
While traditional loans put a lot of emphasis on credit score, often requiring 680 or higher in order to get you approved, alternative lenders don’t put as much focus on credit score when it comes to same-day business financing. Approval may rely more on the cash flow of your business, as well as current and projected revenue rather than the owner's credit score. This means that even businesses with limited history, or less-than-perfect credit scores can qualify.• Smaller Loan Amounts
Another key characteristic of same-day business financing is that usually, loan amounts are smaller compared to traditional financing, where you can apply for a $2 million, $5 million, or a $10 million loan. This makes this type of financing more suitable for immediate, smaller financial needs rather than large projects that require a higher amount of funding.• Higher Costs
If you are looking for same-day business financing, keep in mind that it typically has higher costs as opposed to traditional financing due to its speed and accessibility. Same-day loans provide quick access to funds, often within hours. This convenience comes at a cost, reflected in higher interest rates compared to traditional loans that may take weeks or months to process. In addition, lenders charge higher interest rates to compensate for the increased risk associated with a rapid, less thorough underwriting process.Secure Same-Day Business Financing with NBC
If you are looking to leverage the benefits of same-day business financing, look no further than National Business Capital. With a single application, you can get access to dozens of exclusive offers so you can make the best decision for your business. With $2+ billion financed since 2007, multiple awards, and an experienced team of Business Finance Advisors, we have everything you need to find the best financing options for your project. Are you ready to get started? Apply here.ABOUT THE AUTHOR
Phil Fernandes serves as Chief Operating Officer for National Business Capital. He boasts 15 years of experience in sales and 10+ years of management experience as National’s VP of Financing/Analytics. Phil is also an excellent writer who's completed the Applied Business Analytics executive program at MIT and regularly contributes articles to National Business Capital’s blog.
