Business Loans The Same Day
There are times in a business cycle where a company may find its cash-flow dip or expenses increase leading to the need for working capital to keep the operation running. During those times that company could use immediate financing to help bridge liabilities. How about a retail storefront business that needs to pay rent immediately? Or maybe a company has a piece of equipment break-down on them, leading to the company needing to acquire new machinery that they can’t pay for upfront. Can this company afford to wait days or weeks for funding to replace the equipment if its vital to the company’s operations? Or course not. How about if a company is awaiting payment from a customer and needs to make payroll for its own employee’s immediately. They can’t afford to wait for medium or long-term financing. These are just a sample of occurrences that happen in business every day. To help deal with these immediate funding needs, there are lenders that can provide funding the same-day.
Is It Possible To Get Funded the Same Day?
Sure, but it it won’t be easy. A company can get funded the same day provided they start the process early in the morning. While not all same-day funding companies are located on the East Coast, many are. Therefore, if you’re a company located on the West Coast, you can’t wait until 9am PST to start the process, you need to start early using EST. So you need to have your paperwork together, and be as responsive as possible to the lender’s requests to get a fast loan.
What Are The Same Day Funding Options?
Now, granted, if you have a line of credit in place, you are essentially funding yourself the same-day using your preapproved financing. Then there are also the use of unsecured business credit cards, too. But, aside from that there aren’t a ton of same-day funding options, but nearly all of them require getting a merchant cash advance or business cash advance. With a cash advance you are essentially selling future receivables or revenue to obtain funding the same day. If you’re looking for a same-day merchant cash advance, you are selling future credit card receivables in exchange for immediate funding. You will then repay the advance each day by having the lender remit a percentage of each day’s credit card sales. A business cash advance is nearly identical to the MCA advance, the only difference is the MCA lender will base the funding amount on the company’s business bank account cash-flow. A lender will analyze the bank statements, figure out how much the lender would be comfortable funding (understanding that they want to make the debt service manageable during the course of the advance repayments) and then set a fixed daily payment amount that the borrower will repay until the advance is fully-repaid.
What are the Same-Day Funding Requirements?
There are not many funding company’s that will deposit money into your account the same day, but nearly all of them have a max funding amount of $65,000. Any amount larger than that will include increased due diligence and a Confession of Judgement that must be returned to funder before they will fund. Also, in order to get funded the same day all contracts and stipulations must be returned before the time the funding company’s bank wires each day. While each bank is different with the the times they wire, you usually need to have documents completed before 11am EST.
What are Contracts?
Contracts are the legal agreement between the small business and the funding company to sell future receivables. The contracts will include the Payment Rights Agreement and Sale Agreement, a form to establish direct deposits via ACH (both to deposit the funding amount, and also to debit each day as form of repayment), fee schedule, and Confession of Judgement (COJ).
What are Stipulations?
Stipulations are additional documents that a funding company may require before financing. Some of these documents include voided check, drivers license, business license, accounts receivable summary, tax returns (or K-1 statement), utility bill, or payoff letter (if the cash advance is used for consolidation).
Do Same Day Lenders offer DocuSign Contracts?
Each lenders contracts are different and so are the ways they are delivered. But there are some funding companies that do use DocuSign to send contracts directly to the borrower to streamline the process. If a borrower feels uncomfortable with the DocuSigned contract process, they can always request a hard copy to hand-sign.
What is a Confession of Judgement?
In short, a Confession of Judgement (COJ) is a legal document where a small business looking to borrow money agrees to let the funder enter a judgement against the borrower. While this may seem controversial from a due process standpoint, its fairly common among cash advance lenders.
How is a Bank Account Verified?
When a cash advance lender calculates the amount of funding, and the pricing associated with funding, they do it based on the previous 3-6 months bank statements. To help ensure that fraud isn’t perpetuated against the lender, the funding company will want to login to the borrowers bank account to verify that the bank statements are consistent with what their online bank accounts show. Also, the funding company wants to login and verify the account to ensure that another funding company didn’t provide financing within recent days. To verify you accounts, the lenders will usually use these forms of bank account access:
- Decision Logic – a secure account verification service which many lenders use a ‘read-only’ mode to review the borrower’s bank account.
- Join Me – the borrower will sign-in to JoinMe and then access their own bank account and allow the funder to view/verify account.
- Bank Login – give the lender direct access to the borrower’s bank account login name and password.
Same-Day Approval Options
While few lenders provide same-day funding options, there are many lenders that can approve you for a loan in a day or less. In fact, there are both conventional and alternative financing options in which a borrower can get preapproved for fast working capital in hours, if not minutes. Thanks to new technologies and software, an online lender can run credit on the borrower instantaneously (both on the owner and on the business’s own credit) as well as use the borrower provided financial information to see if the business meets the company’s basic funding requirements.
Loans That Offer Same Day Approval
|SBA||6-10%||3-7 years||10-30 days|
|Line of Credit||5-15%||1 – 3 years||7-30 days|
|Alternative||6-25%||1-5 years||5-7 days|
|Cash Advance||1.16-1.55||3-24 months||1-3 days|
|Invoice Finance||1-2% weekly||1 – 90 days||1-3 days|
SBA Same Day Approval
There is this perception that SBA loans take forever to complete. In some cases, like refinancing and commercial real estate loans, the process can take months. But utilizing the SBA Express program, an SBA lender can prequalify a borrower within minutes and complete funding in the matter of days to a couple of weeks. But to qualify you must have pretty good credit and profitability.
- Rates: 6-8%
- Terms: 3-10 years
Same Day Approval Alternative Loans
Nearly every alternative business lender offers an initial approval within the same day of receiving a complete file. By complete file, we mean business and personal tax returns, income statements, balance sheets, schedule of liabilities, personal financial statement, credit application and business bank statements. While the alternative lenders require a bunch of trailing financials, they are very focused on future revenues to determine funding. While the rates aren’t as good as SBA and conventional lenders, alternative lenders provide financing within the matter of days. Sometimes as few as 2-3.
- Rates: 9-25%
- Terms: 1-5 years
Asset Based Lending Same Day Approval
Asset based loans will never close within a single day because they usually require appraisals, title searches and other forms of due diligence, an asset based lender can provide initial preapproval based on the documents provided by the borrower. After receiving the same day preapproval, and after the lender complete DD, an asset based lender can fund in as quickly as 7 days (usually accounts receivable based) or in two to three weeks using an asset based lender that uses real estate.
- Rates: 8-25%
- Terms: 6 months – 3 years
Invoice Finance Same Day Approval
Invoice financing is a great way to use your unpaid 30-90 invoices to obtain immediate financing. The factor company will forward you up to 90% of the invoice value, charge the borrower a fee, and then pay the remaining amount of the invoice once the 3rd party has paid the invoice.
- Rates: 1-3% weekly
Same-Day Cash Advance Preapproval
Cash advances can be preapproved within the matter of minutes. All that is needed for preapproval is a credit application and six month business bank statements. If your company processes credit cards, you will need to provide four to six month processing statements. After preapproval, the funding process can take days to up to a week if the cash advance is over $100,000.
- Factor Rates: 1.16-1.50%
- Terms: 4 months – 2 years