How to Get Emergency Loans for Small Business
Updated July 26, 2022
It can happen to the best of us in business.
Maybe you underestimated the budget for a certain project, lost a big client, or the courier service didn’t deliver your materials on time that were needed to produce products to stock your shelves. Perhaps you used all of your free cash during the busy holiday period, or are still waiting for delayed customer payments that are hurting your cash flow.
What Are Your Emergency Business Loan Options?
No matter what the case may be, having access to emergency loans can provide you with the short-term relief you really need.
Credibly understands these situations, and offers a number of alternative financing options to help get you the money you need for your business right away.
Short-Term Business Loan
For business owners who need to quickly handle obstacles that may come their way or take advantage of opportunities, short-term business loans can be a very helpful tool. Obtaining a short-term loan is often a better option than a traditional loan with multi-year repayment. Approval rates tend to be much higher, and funds are deposited into your account much quicker.
Automatic payments can be set up to pay down your short-term small business loan principal on a regular basis, instead of having to make one large payment at the end of the month when other bills are flooding in.
Business Cash Advance
A business cash advance works by converting your credit card receivables into the cash you need right away. This helpful funding solution makes repayment easy: A percentage of your future credit card sales are automatically debited on an ongoing basis until your loan is paid back in full.
You’ll benefit from smaller payments when business is slow, since these payments are based on a fixed percentage. The application process is simple, no credit check is necessary, and funds can be received in as little as 48 hours. You are then free to use the funds for any emergency business purpose.
Business Line of Credit
If you already have a business line of credit, you can tap into this resource whenever the need arises. If you don’t, you can get approved for one in as little as 48 hours after application approval.
A business line of credit is a valuable tool to help you with day-to-day operating costs, as well as last minute urgent expenditures. You’ll have convenient access to this account online or via check. With a business line of credit, you only make payments on the amount of money that you’ve actually borrowed; if your balance is zero, then your payment is zero.
You can use your line of credit multiple times, for a number of purposes. You can take money out as many times as you need to, and are only charged interest on the amount still owing. Pay back your outstanding loan whenever you can, and keep coming back for more as the need arises! This really is a fantastic solution for emergency loans .
Common Uses Of Emergency Small Business Loans
No matter how successful or financially stable your business is, there’s always the risk of an unexpected emergency that costs you more money than you have on hand.
These situations are especially difficult because securing traditional bank loans can take months – far too long when your livelihood is hanging in the balance. In times like these, business owners can allow panic get the best of them, and pursue ill-advised strategies to generate cash flow, like withdrawing money from their home equity or personal retirement accounts. What should you do instead?
Take a deep breath, and consider applying for emergency small business financing from a reputable lender that can fund you quickly and at an affordable rate. Here are five of the most common uses of emergency small business loans.
Whether you run a pizzeria and your oven suddenly stops working, or you own a metal-working shop and your milling machine breaks down, the loss of an essential piece of equipment can cause an immediate financial hardship on your small business.
Often, broken equipment can require tens of thousands of dollars to replace, or even repair. If your business absolutely depends on having the equipment in question, securing an emergency business loan will get your business up and running quickly.
The Loss of a Major Account
Having 50% (or more) of your revenue come from a single client or buyer is not an ideal situation, but it’s the reality for many small businesses such as law firms and wholesalers. Losing your biggest account means taking a big financial hit in the short-term. An emergency business loan gives you the breathing room necessary to find new clients without having to lay off staff or make any other decisions you’ll regret later.
Delayed or unavailable product
Does your business rely on timely shipments of product from suppliers? For retail stores that need fresh product on their shelves and restaurants that have time-sensitive inventory needs, delayed deliveries and other supply issues can take you by surprise and leave you unable to fully serve your customers.
Usually, unavailable product is a temporary inconvenience, but if it turns into an ongoing problem that requires you to scramble and find new suppliers, an emergency small business loan can plug your cash flow gap so that your business can recover.
Computer Hardware/Software failure
Your business’s computing systems might be the central repository for all your customer data or the primary means for your employees to perform their jobs. Fried hard drives, corrupted software, or cyber-attacks could create tremendous disruptions that kill your productivity and demand immediate action.
In addition, having to suddenly buy new computer equipment — or hire an IT or cybersecurity firm to get you fully operational again — isn’t an expense that most small businesses plan for. According to Symantec, an IT outage costs SMBs an average of $12,500 per day, not including the effect it has on their customers. Fortunately, businesses with historically strong revenue can secure emergency small business financing to survive situations like these.
For a small business owner, tornadoes, earthquakes, and floods are true worst-case scenarios. 43% of businesses that close due to a natural disaster never reopen, and an additional 29% of businesses shut down permanently within two years of being affected by a natural disaster.
Between the cost of structural repairs and equipment replacement, to associated expenses like finding your employees a new space to work while repairs are being made, the aftermath of a natural disaster brings steep costs that are simply too much for many businesses to withstand. Still, if your business suffers only minor damage or disruption from a natural disaster, emergency small business loans can mean the difference between temporary hardship and permanent closure.
How To Find Emergency Small Business Loans
When disaster strikes your small business, every minute counts. For that reason, it helps to build a relationship with a small business lender before you experience an emergency. Securing a small working capital loan from an alternative lender and paying it off responsibly will convince the lender to provide you with emergency financing at fair terms when you need it, and give you one less thing to stress out about when your business hits a rough patch.
Emergency Small Business Loans FAQ
What are emergency small business loans?
Emergency small business loans are designed to provide fast and easy funding to businesses in need of immediate financial assistance.
How much can I borrow with a Credibly emergency small business loan?
Credibly’s emergency small business loans range from $5,000 to $400,000, depending on your business’s needs.
How long does it take to get funding?
Credibly provides fast and easy funding, with a streamlined application process that can be completed online in minutes. Once approved, funding can be deposited into your account in as little as 24 hours.