Year-End Boost: Exploring Fast Business Loans In December
Depending on your industry, December may be slower for your business — after all, it’s the holiday season. On the other hand, you may be preparing for the next year already.
You might be trying to keep up with your customers’ demands or want to improve or add what your business offers. But to do that, you’ll need sufficient funds first.
Fortunately, if you need financial support, you can get funding in the form of fast business loans in December to give you a year-end capital boost.
You may be able to find a loan regardless of your needs. Read our quick guide below to learn more.
What Are Fast Business Loans In December?
Fast business loans in December are designed to give business owners some extra money to work with during the holiday season.
A fast business loan can come in different forms like the following.
- Business Line of Credit
- Small Business Loan
- Merchant cash advance (MCA)
But in general, these small business loans are alternative funding options offered usually by brick-and-mortar or online lenders.
Because of that, they tend to have less rigorous requirements and processes than traditional loans. They also tend to offer more competitive rates and have shorter turnaround times.
Thanks to all that, fast business loans in December can usually give you a faster and higher chance of getting approved compared to traditional lending institutions.
When considering taking out a fast business loan, there are several things you should pay attention to.
- Approval times
- Funding speeds
- Interest rates and fees
- Repayment terms
- Qualification requirements
How Do Fast Business Loans Work?
To get a fast business loan, you can simply apply for it through an online lender that specialises in quick applications, approvals, and funding.
You can either file an application online for convenience or visit your lender in person.
The online application process can be accomplished in as little as a few minutes after reading all of your paperwork and other requirements.
Then, you can expect a decision (and your lump sum in your bank account, if approved) within the next few hours to a few days. Some lenders may even provide approval within one business day.
After that, ensure you repay the loan within the set period.
You can opt for either a secured or unsecured loan, depending on whether you have assets you can put up as collateral. Some lenders may also ask for a personal guarantee as part of their loan terms.
Lenders may also consider your credit score. With a better score, your lender may be willing to offer you more favourable terms like a larger loan amount or a lower interest rate.
Reasons To Get Fast Business Loans In December
There are many reasons to get fast business loans in December to get your business ready for the Christmas rush.
- Catch time-sensitive opportunities like limited-time bulk sales from suppliers
- Re-hire seasonal and temporary workers to keep up with the demand of customers
- Buy more supplies and equipment to sell more of a product or service
- Christmas bonuses for employees
Some businesses might experience a slump during December. If that’s the case, funding can give them the extra capital to boost their marketing strategies and carry them through the season.
Requirements
Online lenders may have different requirements because they have flexible lending criteria. However, here are some documents that lenders typically ask for.
- Basic business information
- Business plan
- Business licences
- Credit history
- Company tax returns
- Bank statements
- Loan history
Before applying for funding, double-check the specific requirements your potential lenders want from you.
Benefits
A fast business loan can help boost a business’s capital to better cater to the holiday season’s demands. Below are some benefits that small businesses can expect when they take out a business loan.
- Easy application process
- Quick approval
- Fast access to funds
- Many financing options
What To Consider Before Getting Fast Business Loans
Business owners should also be aware of the drawbacks of taking out fast business loans in December. Before deciding if it’s the right option to finance their business, consider the following possibilities.
- Shorter repayment terms, usually less than a year
- Typically higher borrowing costs because of higher interest rates and additional fees
- Borrowers might be personally liable if they default on the loan
- The lender may claim the asset you put up as collateral if you’re loan isn’t fully paid by the deadline
Types Of Fast Business Loans
There are many types of fast business loans that are useful for funding your business — from a business line of credit to selling outstanding invoices to a factoring company.
Each of these may have other factors that can affect how qualified you are to borrow. However, they can be separated into two main types.
Secured Business Loans
A secured loan requires business owners to put up an asset as collateral in exchange for funding.
Because of that, these loans usually have more lenient qualification requirements, lower interest rates, and higher loan amounts.
You might get approved for this business loan even if you have a not-so-good credit score.
However, they also tend to have a longer underwriting process.
Another drawback is that if you don’t follow the repayment terms, you might end up defaulting on your loan. This means you lose your asset, and it will now be your lender’s property.
Unsecured Business Loans
An unsecured business loan doesn’t require collateral from a business owner, so it has a quicker turnaround.
However, because of that, you might encounter higher interest rates and lower funding. These loans also tend to have stricter qualification requirements, such as having a certain credit score.
Despite that, business owners won’t need to worry about losing any assets — but it may negatively affect their credit score if they default on their loan repayments.
Conclusion
Businesses can be very busy during the holiday season. After all, with all the Christmas shopping and celebrations, business owners want their products and services to sell well.
Fast business loans in December can help them keep up with demands by giving them funding.
A fast loan tends to be more convenient than a traditional financial institution since it usually has more flexible lending requirements. In fact, you may even get approved despite having a less-than-perfect credit score.
If your small business is looking for funding this December, we here at Lumi can help you find the right loan.
