When you need financing for your business, you don’t have time to wait through a lengthy approval process.
But once you select your lender, how long should you realistically expect to wait until you have the funds you need to pay your critical expenses?
While there are no hard and fast rules for how long financing approvals and disbursements can take, there are a few factors that can affect your timeline and some effective strategies you can employ to expedite the process.
The Factors That Affect Business Financing Approval Speed
A few key factors can affect how quickly you’re able to get approved for financing and obtain your funds. These include:
- The speed and efficiency of your lender
- The size of the lender’s financing approval department
- How quickly you fill out the necessary paperwork
- How available you are to answer follow-up questions
- Your personal credit rating
- Your business credit rating
- The size of your loan amount
- The value of your collateral
The size of your lender and your response times also can have a major affect on how quickly you get a lending decision. Small lenders may simply not have the resources to respond to loan requests in a timely manner, while large lenders may receive such a large number of loan requests that yours gets lost in the shuffle.
Obviously, if you take several days to fill out paperwork or don’t respond in a timely manner to questions from the lender, it will be very difficult to secure your loans quickly. So when speed is of the essence, make yourself as available as possible to supply the necessary information.
Expedite Your Business Financing With The Right Lender
By the time you apply for business financing, your credit history is largely out of your control. So the best way to secure fast financing is to choose a fast and efficient lender.
This lender should have a large enough loan approval team to respond to all of its incoming requests quickly. But the institution should not be so large that it has no incentive to act quickly or treat every applicant with consideration and care.
When choosing your lender, remember the story of Goldilocks and the Three Bears. Too small will slow things down, while too big will lead to requests getting dropped or ignored. Pick a “just right” midsize lender to get the best response time and consideration.
Additionally, your lender should have a proven track record of working with businesses in your industry and financing the kinds of loans you’re applying for.
If, for instance, you’re applying for a loan to finance agricultural equipment, a lender with extensive experience working with the agriculture industry knows how to quickly assess the long-term value of your equipment, and can make faster loan approval decisions.
As you evaluate potential lenders, spend some time learning about their expertise and the size of their teams. Make sure to ask a few questions to get a sense of how responsive they are. If a lender treats you with consideration before you apply for a loan, there’s a good chance they’ll have your back throughout the entire financing approval process.
Getting The Funds You Need
Once you’re approved for financing, getting the money you need for your equipment or startup costs takes very little time at all.
With SBA loans, funds are available almost immediately. With equipment financing, you can get your funds the same day, provided the equipment is in stock and you sign your approval documents in a timely manner.