Going to try my best to answer your question here. There's a lot of variables to getting an easy business loan that you missed.
First off, business funding can be easy if you have the following things in order PRIOR to applying for a loan:
- Bank statements of the business. Try to have at least the last 6 months. The more the better to show a lender the trend and health of the business, but 6 months should be enough to prove you're a good business to lend money to.
- Outstanding invoices. Only if the type of quick business loan you're looking for is equipment financing.
Next, you need to ask your client to figure out the following:
- How much money are they looking to get from a lender or bank?
- How long have they been in business? You already stated they've been operational for eight years.
- Has the business raised financing in the past? If so, is there any outstanding debt or has the previous business loan been paid off? This is important to find out. It will affect the interest rates and term length you will get from a fintech lender.
Once you have all this information, here are your options:
- You mentioned that they want an easy business loan. Your only quick option here is a what's called a short term small business loan. With that type of financing, you get the amount of money you're asking for with an interest rate on top of it that you pay back to the lending company over a fixed term length. For example: If you want to take out a quick loan for $500,000, you might get a loan anywhere from 8.5% to 80% APR. That's a big rank in the interest rate because a lot of factors are taken into account (the financing factors I mentioned above).
- You did not mention what the funding will be used for. If by chance it's to buy equipment for the practice, they can try to do equipment financing instead. It's a bit different from a standard loan. You are telling the funding company what equipment you are looking to buy and how much it costs and they lend you money to buy it.
- Line of credit. If your client generates revenue, they can get a line of credit against their revenue instead of a quick short term loan. A line of credit offers a bit more flexibility as you only pay interest on the amount of money you draw from it to use in the business.
- Factoring is the fourth option you have available to get an easy small business loan. The way factoring works is similar to invoice financing. If the business has outstanding receivables (money that is owed to them from patients or insurance companies for example), they can leverage those invoices to get funding against it. What the lender is doing here is buying your invoices off you at a small discount. Then they will collect the money that is owed to you. The benefit of this type of business loan is that you get your money up front without having to wait for it to arrive.
End of the day, a quick small business loan boils down to how you plan to use it. That's not for being able to quality and apply for one, it's just what you need to think of strategically as a business owner. Here are some common uses:
Growth. Using the capital to grow your business by either opening up new locations or advertising.
Bridge cash flow gaps. If there is a seasonal gap or you're waiting for money from outstanding invoices, capital can be used to pay bills while you wait.
- Short-medium term operational costs.
Emergencies. Happens for every small business. Maybe some expensive equipment broke down that is critical to the operation of the business. A fast business loan can be used to cover costs when such an emergency arises.