What to Consider Before Applying for Quick Business Loans

June 27, 2023 EC Funding

If you’re a budding entrepreneur who is short on money, you’re in a better position than you’d think. There are a variety of finance options available to you.

The loan is the most common form of financial help business owners apply for.

The loan approval process can be very long, and the average business owner doesn’t have weeks (and in some cases, months) to wait for an approval.

This may come as a surprise, but there’s a simple way to get quick business loans that can solve your immediate and long-term financial problems.

Curious about if those business loans are right for you? Read this article to know what you should know before you apply for quick business loans.

Get Paperwork in Order

It doesn’t matter if you’re looking for traditional business loans, quick business loans, or short-term loans. If you want any kind of money, you need to have the right paperwork ready to go.

Every lender is going to have their own specific specifications for paperwork. In general, there are the documents you should have ready before you apply for loans of any kind:

  • Business license
  • EIN certificate
  • Bank statements
  • Business lease
  • Personal ID
  • Business ID
  • Incorporation paperwork

It’s a good rule of thumb to have any paperwork ready for when you need funding for your business.

If you have essential paperwork ready when you start looking for financing, you won’t have to worry about being held up by a document search.

Have a Stellar Credit Score

We all know that having a good credit score is important for getting a loan or any kind of financing. This isn’t any different for people that want quick business loans.

If you want to get approved for any kind of business loans, you need to have a respectable credit score.

You don’t need to be in the 700s, but you should at least be in the fair range.

Research simple ways for you to improve your credit score for a business loan. Once you feel like it’s as high as it can go, feel free to start applying for loans.

Prepare Your Business Plan

If you want funding, whether that’s from a financial institution or with a trusted friend or family member, you might need to have a good business plan to prove why you need money.

Banks, money lenders, and friends and family won’t want to lend money in a business they don’t have confidence in. That’s why you need to show why giving money to your business is the right thing to do.

The United States Small Business Association has a great checklist of what you should include in a business proposal. Review the list, and see what you need to have so you can be approved for quick business loans.

Know that not all lenders will ask for a business plan, especially when you are looking at quick short-term financing or if you have been in business over one year.

Have Financial Statements

We know we talked about the importance of having certain financial documents in order. But if you want to improve your chances of getting approved for loans, you should have as many financial documents as possible.

Don’t just think about the overall number you’ll need to keep things running. Break down all of your expenses and take them into consideration.

Bring invoices for inventory you’ve gotten for the past few months. Bring a breakdown of every employee’s salary and hourly wage. Think about any and all expenses you accrue every month, and be sure to bring them to your first meeting.

Consider Your True Needs and How Loans Will Help

You’re looking for quick business loans because you need money, but have you thought about why you truly need the money?

Are you running short on revenue every month? A loan can help you cover expenses for the next few months or so, but if you don’t figure out why you’re not making enough money a loan won’t be able to help you.

Do you need a loan to cover employee costs? A great employee is worth their weight in gold, but mediocre employees that cost a lot of money may not be worth what you’re paying them.

Take time to think about why you need quick loans. If you need loans to cover costs for reoccurring problems that don’t have a solution, you may want to rethink if this is the financial “solution” you need.

Think About the Final Costs

Remember, loans of all kinds, even quick business loans, aren’t free money for you to use. Eventually, you’ll need to find a way to pay them back.

Loans are a great solution for when you’re in a tough financial spot, but only if you think you’ll be able to pay them back in a reasonable amount of time.

Be Sure To Fulfill Your Part

If you’re on the path to being approved for your quick business loans, you need to make sure that you can fulfill your end of the agreement.

Don’t just take a loan because you’re approved. Take a loan because it covers your expenses and you can pay it back in a reasonable amount of time.

Can you afford to make payments, and be able to make them on time? Is it possible for you to repay the loan in the amount of time outlined in the agreement?

Is this the right amount you need, or can you see yourself needing to borrow more in the future?

If you don’t know the answer to those questions, loans may not be right for you.

Going Beyond Quick Business Loans

Now that you know essentials about quick business loans, it’s time to go beyond loans and think about other forms of funding.

If you’re interested in improving cash flow, check out our post on how business capital loans can help increase your business’ amount of cash flow.

Also, remember we’re here to help. Be sure to contact us so we can answer any financial questions you have about your business.