Delivery trucks break down.
Servers go haywire.
Employees embezzle money.
This is true in life, and definitely true in business.
All sorts of emergencies are bound to crop up no matter what kind of business you run, and how careful you are.
Unfortunately, many of these emergencies can only be successfully weathered with cash on hand.
Even if you have plenty of credit cards, they might not be ideal for all situations or even useful for the range of emergency expenditures you’ll have to make.
This is especially true if what you’re facing isn’t even an emergency, but a business opportunity that requires you to act with lightning speed.
Nothing beats liquid cash.
And when you don’t have enough on hand, one of the fastest ways to acquire the working capital you need is through loans.
Finding the Right Loan
As tough as the current economy is, entrepreneurs actually have more financing options available than ever before.
All these choices might be overwhelming, and to save time, many business owners will just apply for a loan from the first or first few lenders they come across.
Avoid doing this, because you could save hundreds or even thousands of dollars with just an hour of research.
Here’s just a few factors to consider:
How much money do you need?
Many loan types have specific minimums or maximums, so be aware of exactly how much money you need (or at least a specific range) to rule out looking at any loans or lenders that won’t work with your funding needs.
How fast do you need financing?
Do you need to make a purchase tomorrow or can this emergency funding be delayed for a week, or even a month?
The absolute shortest amount of time that most loans can even hit your account is in 48 hours, so be mindful of how fast you actually need the cash.
What are the loan terms?
The speed at which you get the money, the APR and the timeframe to repay the loan are huge factors to consider before you even apply.
Be aware that loans that hit your account quickly usually have higher APRs.
Have of all of this in mind and know what your limits are before you begin the shopping process.
This early bit of due diligence will actually save you a lot of time and money, and definitely make you more confident in your decision.
Types of Emergency Loans
Usually when you have an emergency, you need funding fast.
Here’s a look at the various types of loan options that can give you capital to work with in as little as two days:
SBA Disaster Loans
If your business is located in a certified disaster area, you might be eligible for an SBA Disaster Loan.
These loans give you the working capital you need to repair your place of business, replace destroyed equipment, re-stock inventory and more.
These are the hardest types of emergency business loans to qualify for, but the terms are generous and well worth the effort.
Short Term Business Loans
Traditional term business loans usually require substantial minimum loan amounts, far exceeding what many borrowers actually need.
That means they have a longer term for pay-off, and are harder to qualify for.
Short term business loans, however, are generally for smaller amounts of cash, have fewer hurdles for qualifying, and usually have terms of two years.
The relatively small amount of money the loans are for also mean the money can land in your account faster.
Working Capital Loans
Working capital loans are exactly what they sound like: loans to keep your business running, paying for things such a payroll and other day-to-day expenses of operation.
They also make great emergency business loans, because the funds can land in your account fast, have very flexible terms as well as a wide range of minimums and maximums.
Personal Loans For Business
Lenders know how important small businesses are to their owners—so it’s only natural they would make personal loans available to entrepreneurs.
These types of loans don’t require you to have an established business line of credit or even business documentation.
They also have substantial repayment terms, going as long as seven years and funding up to $100,000.
How to Use Emergency Business Loans
Lot’s can go wrong in today’s world, partially crippling or completely destroying your business (and your revenue stream.)
Here are some examples of different things that can happen – and how emergency business loans can help.
Your business is damaged or destroyed in a natural disaster.
From hurricanes in Florida to earthquakes and wildfires in California, Mother Nature has a ton of ways to completely destroy your livelihood.
In the event of a natural disaster, you may be eligible for an SBA Disaster Loan, which offers up to $2 million in funding at a low interest rate for qualifying businesses.
Machinery breaks down, which is unfortunate when it’s integral to the operation of your business.
Maria Cruz, owner of Heavenly Flowers Too, experienced that firsthand when her delivery truck broke down.
Banks turned her down (and they would have taken too long to provide funding anyway), but she was able to get a loan for $60,000 processed in three days from a non-traditional lender and had her truck back up and running in no time.
If something like this happens to you, a working capital loans might be the best solution.
Customers are your lifeblood, but it your company is attacked in the press, business will dry up fast.
You’ll need to quickly craft counter messaging that can be disseminated through advertising, or better yet, hire a crisis PR firm to help you weather the challenge.
Neither of these options are cheap however, and both PR and advertising require up-front payment.
A personal loan for business could be exactly what you need.
Recovering From Disaster, Quickly
It’s always advised to have both backup plans for the various disasters that unfold, and cash on reserve to help handle them quickly.
But no one can plan for everything that could possibly go wrong, and as we all know, having money stashed away for a rainy day is easier said than done.
Fortunately, there are a lot of lending options out there available to get you the cash you need fast, and in terms that you can hopefully find some comfort in.
Need help in your research?
Try our loan matching tool to get started and see what options are out there.