Business Loans – How Long Do They Take?October 15, 2020
You’ve finished applying for your small business loan and now are wondering exactly how long will it take for you to actually receive your loan. This can be one of the most stressful periods for your business, the anticipation and waiting to find out whether or not you’ll be approved puts you in a stiff position of anxiousness and strain.
Whether you need the money for day to day expenses, payroll, safety cushion, or expansion; you’re most likely wishing that the money is in your hands as soon as possible as you have things to pay off regarding your company.
The answer to this question lies on the type of loan that you’ve applied for. Different lenders have different requirements & processes which overall equates to different lending powers. Some may only take 24 hours to get back to you, while others may take several months to hear anything at all. That being, it is not all up to the lenders to qualify you. You must present them with good financial proof and income in order for them to grant you a loan. A poor credit score alongside proof of inability to repay past loans/debts/assets proves that you may not be an eligible candidate for lenders to invest their fundings in you. Prior to you officially sending your application, review your financial statements and credit report, score, and history and make sure that everything is fit for the lenders specific requirements.
Most Common Types of Loans For Small Business
When you apply for a loan, you must have a very clear depiction of what you will spend the money on. The amount of cash that you need and what you need it for will dictate which loan type is most appropriate for you to apply for. Don’t just pull out an uncertain amount of money without knowing where you are going to put it towards. This can cause you to recklessly spend the lended money without putting the important assets first and foremost. Write and prioritize what needs funding and then make a decision on how much you will be setting aside for those things.
The most common types of small business loans are:
- Bank Loans: Bank loans typically take anywhere from 60 to 90 days to make a final decision on your loan application. It can however take longer than that. Bank loans are a prime option for existing small businesses that need a little cushion or help with day to day expenses. You must have a good credit score and credit history in order to be qualified to receive a loan.
- Micro Loans: Micro loans timelines can vary quite drastically from one another. You could hear back in a matter of days if your loan needs are simple and you’ve provided all of the necessary paperwork and info. If your business needs are a bit more complex, however, or require the lender to assess assets such as a home office, work vehicle, etc. this can set your application back by weeks or even months. Do not be discouraged though, it is better later than never.
- Online Loans: These loans have a much quicker and higher rate of payout. As long as you provide all of the appropriate paperwork and information, you could hear back within 24 hours. This works through running a background check on your credit card and financial history. Once the lender is satisfied and approves your credit information, they send the required amount of money that you requested.
- Express Loans: Need cash in a spliff hurry? There are express loans available for certain circumstances, such as disaster or emergency relief. These loans are processed very quickly, meaning you could be approved within 1-2 days. These types of loans can help build a good credit because they have easier repayment methods and options.
No matter what your credit needs, there’s a viable solution to your financial problems. If a small business loan doesn’t seem right for you, perhaps you should consider the benefits that grants or investors may offer. You might have to do a bit of research to find the right solution Business Plan Consultant help but all of your hard work will pay off in the form of a thriving and successful business!