Small businesses are more susceptible to cash flow issues compared to established companies. For this reason, they need quick access to working capital to bridge cash flow gaps and to keep the business afloat. If small businesses need quick funding, they often apply for a loan from online lenders because oftentimes, online lenders have business loans instant approval feature.
Traditional lenders like banks and credit unions often take a few weeks or months to approve or deny a loan. Overall, traditional lenders approximately take three months to decide whether to fund your business or not.
On the contrary, pre-approval for online loans only take five to ten minutes and you can do the entire application online. Once approved, you can even receive small business funding within 24 hours. While online lenders fund faster than traditional lenders, there are ways to speed up the underwriting process to avoid wasting time and money.
1. Evaluate Your Credit Score
Before anything else, be sure to check both personal and business credit scores to avoid wasting time for loans you can’t qualify for. If you want to qualify for better terms and more affordable interest rates, you’ll want your credit score to be high as possible. Check your credit score to see if you need to fix any major issues. Don’t expect to improve your credit rating overnight, but it’s important to review them before applying.
You can check your credit scores online using free credit score websites like Credit Karma or Discover Credit Scorecard. Don’t lose hope if your credit score is lower than average. You can definitely improve your score over time and there are still fast business loans you can qualify for even if your credit scores aren’t high enough.
2. Prepare Thoroughly Before Submitting Documents and Other Requirements
For some, this tip may seem like a no-brainer but a surprising amount of applicants got denied a loan simply because they overlooked minor details. When submitting a business loan application, it’s important to prepare and double-check all necessary documents: financial documents, a comprehensive business plan, tax returns, and more. The documents required vary from lender to lender.
Aside from submitting the necessary documents, lenders would also want to know how you’re going to use the funds. Some lenders want borrowers to specify their intended use for the funds. As mentioned, you may also want to check your business and personal credit.
3. Improve and Finalize Your Business Plan
Having a comprehensive business plan can increase your chances for approval. A business plan shows lenders that you’re committed to running your business and that you have a plan for the future. If you don’t have a business plan, make sure to create one and include the necessary information:
- Executive Summary
- Business Overview
- Operations Plan
- Market Analysis
- Products and Services
- Sales and Marketing
- Competitive Analysis
- Management Team
- Financial Plan
You need to elaborate exactly what your company does, how it’s going to generate revenue, and why customers want to buy your products or services. Additionally, you also want to emphasize market opportunity, your competitors, and how your competitive advantage. Additionally, list your team members, your business model, and your possible expenses.
4. Respond As Soon As You Can
One of the features of online lending is that borrowers are notified as soon as you qualify for a loan. This means that the sooner you respond, the faster the funding. After claiming the loan offer, online lenders typically contact you to give the final approval and request additional documentation (if necessary) within 24 to 48 hours. Lenders often notify you by email or call you to ask for documentation or clarification.
Whether you applied for a loan online or through traditional lenders, it’s best to be on the lookout for calls or emails from your lender. Be sure to answer your phone or respond to emails as soon as you can to avoid missing important details about your loan application.
Business Loans Instant Approval with SMB Compass
Not a lot of lenders offer fast funding for small businesses, especially traditional lenders. Online lenders like SMB Compass offer business loans instant approval for qualified borrowers. We can guarantee fast funding within 24 to 48 hours. To know more about our offer, make sure to call us at (888) 893-8922 or email us at email@example.com and speak with one of our financial advisors.