Quick business lending can be an incredibly useful tool, particularly with businesses that have weaker cashflow or tight margins.
For example, you might have landed a huge order, but your cash flow is poor – or maybe a key piece of equipment breaks down, and you don’t have the funds to replace it.
When your business needs cash immediately, traditional bank loans aren’t always an option. That’s where quick business lending comes in.
According to Statista, in the UK, approximately 37% of SMEs stated that they used credit cards to fund their business, and a further 28% stated that they were using bank overdraft facilities for their businesses in 2023. These fast, flexible financing options can get cash into your account within 24 to 48 hours. Unfortunately, the catch is that they can come with higher costs and shorter repayment terms.
In this guide, we’ll break down:
- The quickest business lending options available in the UK
- The risks you should watch out for
- How to choose the right loan for your business
If you are looking for quick guidance for the best loan in your situation, feel free to use our instant quote feature, which will allow you to find the best business loan for you.
Remember, you should always consult with a professional before engaging with any loans or financial products.
Fast business loans might not always be the best option for your business, and instead, you might want to assess other areas such as sales or marketing if you want to increase cash flow.
What is quick business lending?
The concept of quick business lending refers to fast-access financing solutions that help businesses secure funds within a short time frame, typically within 24 hours to a few days. Unlike traditional high-street bank loans, which can take weeks or even months to process due to strict approval criteria and extensive paperwork, quick business lending is designed for speed and accessibility. Even with the best business plan, sometimes cashflow gaps are inevitable.
These lending options include short-term business loans, invoice financing, merchant cash advances, and business lines of credit. Many of these products come with streamlined application processes, minimal paperwork, and digital approvals, making them ideal for businesses that need fast access to cash.
However, while quick business loans can be a lifeline in urgent situations, they often come with higher interest rates or shorter repayment terms than conventional loans.
Businesses must weigh the benefits of speed and convenience against the potential cost implications. Quick business lending solutions are not designed to be a consistent part of a business’s growth strategy.
Why do businesses need quick lending?
Access to fast funding can make the difference between business continuity and a major setback.
Here are some of the most common reasons businesses seek quick lending:
1. Emergency expenses
Unfortunately, unexpected costs can arise at any time. Whether it’s a broken-down delivery van, a critical piece of machinery failing, or sudden property damage, businesses often don’t have time to wait for a lengthy loan approval process. Quick lending ensures they can cover these emergency expenses and keep operations running smoothly.
2. Cash flow gaps
Even profitable businesses can experience cash flow shortfalls, especially if they deal with long invoice payment cycles.
Common scenarios include:
- Retailers waiting for seasonal sales spikes but needing stock now.
- Service-based businesses relying on clients to pay invoices, sometimes 30 to 90 days later. It could only take one query on a large invoice to put your cashflow under strain.
- Hospitality businesses covering overheads during off-peak seasons.
Quick business lending bridges these gaps, allowing businesses to pay wages, rent, and suppliers on time without disruption. Not to mention, keeping our VAT payments up to date, not doing so is a major cause of administrations.
3. Seizing growth opportunities
Sometimes, an unexpected opportunity arises that requires immediate funding, such as:
- A supplier offering a bulk discount on inventory, but only for a limited time.
- A chance to expand to a new location or launch a new product.
- A need for additional staff to handle a sudden increase in demand.
Waiting weeks for traditional funding could mean missing out on these chances. Quick business lending enables businesses to act fast and stay competitive.
Types of quick business lending
Choosing the right business loans can be a very stressful decision. Here are some of the best options for quick business lending – each one suited for different situations and businesses.
1. Short-term business loans
Short-term business loans are generally fast but expensive business loans. You get a lump sum upfront and repay it over a few months.
The benefit of this is that it is quick, and cash can be available fast, however, the downside is that these loans almost always carry a higher interest rate, which can be costly in the long run.
2. Invoice financing
Invoices being unpaid, or late, can be one of the biggest burdens on a small business. Invoice financing can be one of the best ways to remedy this, as it advances you on the cash you’re owed.
This means that you technically take on no new debt, you’re only advancing the money that is legally due to you, so the rates for invoice financing is generally very reasonable.
Asset-based lending works in a similar way, and will use an existing asset of yours, such as machinery, as collateral against your loan.
3. Merchant Cash Advance (MCA)
A merchant cash advance gets you a loan upfront, which you repay through a percentage of daily credit card sales.
For a form of quick business lending, a merchant cash advance can be a great option. There are no fixed monthly payments, you repay based on your revenue, which can be much more sustainable in the short term.
The risks of quick business lending
Quick business lending can seem like a great option on the surface, but there are some risks that you should be aware of.
Here are a few things to watch out for:
1. Higher Interest Rates – Speed comes at a cost. Rates can be double or triple what banks charge.
2. Short Repayment Terms – Some loans need to be repaid in weeks or months.
3. Risk to Assets – Secured loans put property or equipment on the line.
4. Cash Flow Strain – MCA repayments come daily, which can hurt profitability.
5. Lack of FCA Regulation – Not all lenders are Financial Conduct Authority (FCA) regulated, meaning fewer consumer protections.
Always make sure that you consult a financial advisor before making any decision when it comes to loans. Borrowing carries risk, so always ensure that you are aware of everything before making a decision.
How to choose the right quick business lending
Before applying for a loan, here are a few questions that you might want to ask yourself:
- How much do I need?
- How soon do I need the money?
- Can I afford the repayments?
- What’s my credit score?
Depending on this, you might be better suited for different types of loans. For example, if you need cash immediately, you might want to go for a business line of credit.
If you still have consistent sales, then a merchant cash advance might be the best option, or asset-based lending if you have valuable assets and need a larger loan.
For unpaid invoices, there is invoicing financing, which is designed specifically for that reason.
If you’re looking for more information, then we have a guide on how to access business finance for small businesses.
Is quick business lending right for you?
Business lending is a great way of boosting your business, plugging gaps and easing cash flow problems.
However, as a rule of thumb, the shorter the loan term and the easier it is to obtain, the higher the interest rates will be, as the lender is taking on more risk.
Take this into account when looking at quick business lending. You might be able to obtain quick funding, but this will carry with it higher costs, shorter repayment terms, and potential risks.
Always check fees, interest rates and repayment terms before choosing any loan. Also, ensure that the lenders are FCA-regulated.
At Rise Funding, we are authorised and regulated by the FCA and approved by the NACFB. We can handle all this for you and not only match you with an FCA-regulated, highly rated lender but also match you with the best loan for your unique situation.
You can get a tailored business finance quote in seconds with our instant quote tool.
