Business owners who need fast access to cash can benefit from the accelerated approval and funding times available with same-day business loans. However, high interest rates and short repayment terms can make these loans more expensive than traditional financing. These are the best same-day business loans you can use in a pinch.
Methodology
We reviewed 15 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders that offer same-day funding based on the weighting assigned to each category:
- Loan cost: 35%
- Loan details: 25%
- Customer experience: 20%
- Eligibility and accessibility: 10%
- Application process: 10%
Within each major category, we considered several characteristics, including available loan amounts, repayment terms and applicable fees. We also looked at minimum credit score and time in business requirements and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like online applications, prequalification options and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
Tips for Comparing Same-day Business Loans
Consider these tips to choose the best small business loans with fast funding:
- Find a loan that meets your budget and borrowing needs. Same-day funding may sound appealing, but it’s often more costly than traditional loans. Evaluate your business’ needs to determine whether fast funding is necessary and whether the elevated monthly payments will fit within your budget.
- Review each lender’s application requirements. Getting same-day funding requires submitting a complete application that can be reviewed and approved quickly. Choose a lender with accessible application requirements that can be met without additional communications or extensive paperwork.
- Take time to review the lender’s reputation and reviews. Read online reviews for each lender before committing to a loan. This can help identify any red flags like difficult lending standards, high interest rates and poor customer service.
- Avoid fees, where possible. Most same-day lenders charge high interest rates and fees to make up for fast funding, short repayment terms and the additional risk posed by more lenient qualification requirements. If possible, opt for a lender that offers low- or no-fee business loans with fast funding.
What Is a Same-day Business Loan?
A same-day business loan is a type of financing that lets business owners quickly access money to cover operating costs and other expenses. In general, a business owner can access funds within 24 hours of applying—or as soon as the same day.
Same-day business loans can provide fast access to cash without meeting the rigorous lending standards imposed by traditional lenders. However, this convenience comes with higher borrowing costs, including interest rates from 4% to around 99% or higher, plus origination fees.
When to Choose a Same-day Business Loan
Same-day business loans are a great way to access cash quickly, but they can be expensive and difficult to pay off. That said, this type of financing may be the only option available for new businesses and applicants with poor credit. A same-day business loan may be a good fit for:
- Businesses that need to finance short-term cash flow issues
- Startups with no credit history and limited financial records
- Borrowers who don’t meet eligibility requirements for traditional loans
- Business owners who need cash quickly to take advantage of an opportunity
Types of Same-day Business Loans
Consider one of these types of business loans if you need money fast:
Short-term Loan
Short-term loans let borrowers access a lump sum of cash and then make monthly payments for a set repayment period. In general, short-term loans feature repayment terms between three and 18 months. Rates can range anywhere from 3% to more than 50%, and interest begins accruing on the entire loan balance as soon as funds are disbursed.
As with some other same-day loans, the combination of short repayment terms and high interest rates may result in high monthly payments.
Business Line of Credit
A business line of credit lets borrowers access funds on an as-needed basis, up to a set borrowing limit. Rates are typically between 10% and 99%, and interest only accrues on the portion of the line of credit the borrower has accessed.
Borrowers also can pay off their balance and reuse their funds for the duration of the draw period—usually between 12 to 24 months. This means that a business line of credit can cover ongoing costs without having to pay interest on more money than is actually needed.
Merchant Cash Advance
A merchant cash advance (MCA) is a type of financing businesses can use to quickly access cash without meeting traditional qualification and application requirements. Under this type of financing, a business owner receives a lump sum of cash that is collateralized by a portion of future sales receipts.
Factor rates generally range from 1.2 to 1.5, which is equivalent to annual percentage rates (APRs) between 40% and 350%—much higher than many other forms of business financing. Loans are repaid from the business’ daily credit card sales or via daily or weekly automatic clearing house (ACH) payments.
For that reason, MCAs may be a good fit for businesses with a high volume of sales to cover payments.
Invoice Financing
Invoice financing lets borrowers secure a business loan with a portion of the business’ outstanding invoices—generally between 80% and 90%. The business remains responsible for collection, and when the client pays the invoice the borrower repays the loan, plus fees and interest.
Interest typically accrues at a rate of 1% to 3% per month, with APRs shaking out between 10% and 79%. Invoice financing can be expensive, but it lets businesses access cash quickly and without meeting traditional qualification requirements.
Business Credit Cards
Business credit cards give businesses access to a revolving line of credit that can be used to cover operating costs, purchase office supplies and equipment and address other day-to-day cash flow issues. APRs range from about 13% to 35%, but borrowers with excellent credit may qualify for a card with a 0% introductory rate.
This type of financing also may come with almost immediate approval, and borrowers may be able to use the account before receiving a physical card.