Running a business involves navigating a host of unpredictable challenges, such as natural disasters, economic downturns, lawsuits, and inflation. In 2021, it’s no surprise that 91% of employers sought emergency assistance funding, according to the Federal Reserve Banks’ Small Business Credit Survey.
When confronted with an unexpected issue, an emergency business loan might be the ideal solution. This type of financing is quick and accessible, helping your business manage expensive crises.
Here, we’ll outline the top 5 options for emergency business loans and what you need to apply.
5 of the Best Emergency Loans for Businesses
Emergency small business loans offer rapid financing, with some providing approvals and funding within 24 hours. Typically, these quick loans are short-term, with repayment periods usually not exceeding 18 months. Here are some of the best business loans available for emergencies.
1. Short-Term Loan
If you need emergency business cash quickly, consider a short-term loan. Some lenders can approve up to $500,000 in short-term funding, with capital potentially released on the same day as approval. These loans typically have repayment periods ranging from 3 to 18 months.
2. Merchant Cash Advance
A merchant cash advance (MCA) is an alternative option for emergency business finance, where the borrower receives a lump sum of cash in exchange for a percentage of future sales. Repayment occurs through daily or weekly installments over several months. Due to more flexible lender requirements, qualifying for an MCA can be easier compared to other financing options.
3. Business Line of Credit
One of the top choices for quick business financing during emergencies is a business line of credit. Similar to a credit card, a line of credit enables businesses to withdraw funds, up to a specified maximum limit, to cover various expenses.
An emergency business line of credit can be secured with collateral or unsecured. Interest is accrued solely on the withdrawn amount. Moreover, with revolving credit lines, funds become available again as payments are made. (Similarly, a business credit card offers another option for accessing emergency business funds.)
4. Accounts Receivable Financing
If your business operates in the business-to-business sector and you’re waiting on payments from customers for goods or services provided, accounts receivable financing offers immediate access to a portion of that money. It’s another viable option for emergency small business loans.
Typically, a lender will advance up to 80% of the qualifying receivables owed to the business. Once the invoices are settled, the business receives the remaining amount, minus any applicable lender fees.
This can be particularly advantageous for businesses with limited or poor credit history, as lenders primarily assess the likelihood of customers fulfilling their invoice payments.
5. Economic Injury Disaster Loan
Where Can I Get the Best Short-Term Emergency Business Loan?
Emergency small business loans are primarily offered by alternative online lenders, which excel in speed and hassle-free applications compared to traditional providers like banks and SBA loan lenders—features valued by entrepreneurs facing urgent financial needs.
Alternative lenders typically have lower approval requirements than conventional lenders, making emergency financing accessible even for young businesses or those with modest revenue. This flexibility extends to businesses seeking emergency loans despite having bad credit.
These lenders are renowned for their rapid small business loan approvals, driven by streamlined processes leveraging data analytics and online service enhancements. The entire application process is conducted online, with decisions often made within hours. In some cases, funds from emergency small business loans can be deposited the same day as approval.
What Are the Top Reasons for an Emergency Loan?
There are several scenarios when you might need emergency business cash to keep operations running. Here are some instances when unexpected expenses can arise and when you might need a quick small business loan.
Replace or Repair Business Equipment
Every business relies on essential equipment that either enables workers to perform their tasks or enhances operational efficiency. Replacing such critical equipment can be costly yet essential, particularly when it plays a crucial role in daily business operations. An emergency business loan can provide the necessary funds to procure the equipment needed to sustain normal business operations.
Related: Equipment Financing
Cover a Customer’s Unpaid Balance
If your business manages multiple customer accounts and some are unable to pay on time for the services provided, it can significantly impact your operations. A quick business loan can bridge the gap, ensuring your business can continue smoothly while waiting for outstanding balances to be settled.
Business Disruptions
As a small business owner, you strive to anticipate both busy periods and downturns while staying informed about industry trends and economic developments. However, despite proactive measures, unexpected disruptions like natural disasters or health crises can still occur. These challenges often prompt entrepreneurs to seek out small business emergency loans.
Pursue Time-Sensitive Business Opportunities
Another valuable application for an emergency business loan is seizing a business opportunity. For example, emergency small business funding can enable you to capitalize on a time-sensitive discount for a product you’ve been planning to add to your inventory.
Benefits of an Emergency Business Loan
Because of their ease of access and rapid funding, emergency business loans often come with higher APRs compared to conventional small business loans. Despite this, there are numerous advantages to consider, including the following:
Short-Term Benefits
- Overcome a temporary need for funding
- Avoid stretching your business thin on capital
- Keep your business operating as usual without making cutbacks
Long-Term Benefits
- Seize opportunities that optimize your company’s growth
- Avoid long-term financial commitments
- Don’t allow a short-term issue to affect the way your business operates long term
Related: Fast Small Business Loans
Applying for Emergency Business Funding Online
To apply for emergency business funding online through iBusinessLender, you’ll need to submit basic information about yourself and your company, along with your four most recent business bank statements.
We leverage the information you provide to connect with our network of lenders and expedite the process of finding the loan that meets your needs—swiftly.
When seeking emergency small business funding, having a lender that prioritizes speed in the application process is crucial.
Ready to apply for a fast business loan online?
3 Reasons Why You Should Apply for Funding Through iBusinessLender
1. Approval Within Hours
Our online application ensures a fast and straightforward process. At iBusinessLender, our commitment is to promptly connect businesses with the most suitable funding options.
After you submit your online application, we immediately begin our work on your behalf. Within as little as 30 minutes, you may receive a call from one of our experienced Business Advisors to discuss financing options that can support you and your business during challenging times.
2. Next-Day Funding
Short-term financing serves as an excellent emergency solution when you require swift access to business funding. Your Business Advisor will guide you through available financing options. If we secure emergency funds for your small business, you could receive the funds as early as the next business day.
3. No Pressure
Our Business Advisors are dedicated to assisting you, whether it’s expediting your funding or suggesting alternative solutions that may better suit your company. If you’re dissatisfied with the options presented, there’s absolutely no obligation to proceed with signing a contract.
Who Qualifies for an Emergency Business Loan?
Getting a short-term business loan can help owners more easily navigate unpredictable events and the costs that come with them. Through our funding partners, we likely can provide emergency business cash to companies meeting these minimum requirements:
- At least 1 year in business
- $75,000 in annual revenue
- Credit score of 540 or better
