Emergency Business Loans

Instant Financing to Cover Your Business Expenses

Running a business can feel like a game of whack-a-mole at times. You're constantly looking for solutions to overcome hurdles and grow your business. But whether you're experiencing rapid growth or dealing with unexpected circumstances, having funds to address your business needs is always helpful.

You'll be glad to know you can apply for emergency loans to help you during times of crisis. Keep reading to learn more about the different forms of emergency business loans, how they work, and how to access them.

How do Businesses Use Emergency Business Loans?

Businesses typically borrow money to expand, like introducing a new product or opening a new location. However, companies sometimes need capital to stay afloat and maintain operations.

Here are some ways small business owners use emergency loan funds.

Maintaining Payroll

Entrepreneurs use the funding to meet their everyday business needs. Having access to capital means companies can pay their employees on time and in full, especially during low sales seasons or other economic downturns. And instead of layoffs and furloughs, businesses can retain the right talent to meet their business goals.

Covering Overhead Costs

Running a business is a daily grind. Cash flow gaps happen to all businesses — even to profitable and well-established companies. Low sales seasons, natural disasters, and late customer payments can impact a company's revenue, making managing overhead costs difficult.

During these times, emergency loans can help pay for business expenses like rent, utilities, and other bills.

Purchasing Equipment

Industrial machinery and equipment are quite pricey to rent or buy, but often necessary for day-to-day business operations.

Equipment and machinery help improve a company's processes and increase its efficiency to take on more orders. Not only that, but these pieces need to be updated and upgraded, which also costs money. So, business owners typically finance the purchase of equipment.

Covering Delayed Payments

Unfortunately, late payments are common. It happens in every industry — sometimes, even the most successful businesses can't avoid it.

However, delayed invoice payments can make it harder for businesses to pay their own bills and meet payment deadlines. So, business owners turn to emergency loans to pay their expenses and obligations while waiting for customer invoices to clear.

Purchasing Inventory

Many businesses invest a large portion of their capital in purchasing inventory. Retail companies, in particular, typically have over 70% of their current assets tied up in inventory. But business owners must ensure they are fully stocked to compete with other businesses.

So, funds from emergency loans allow businesses to purchase the inventory they need even when they're experiencing cash flow gaps. Emergency loans also help companies recover from disasters like floods, fires, and other devastating circumstances.

Marketing and Advertising

It'd be difficult for any company to sell products and services and make a profit if customers didn't know they existed. And in the face of a crisis, investing in marketing helps bring in new customers. That's why business owners use emergency business loans to invest in marketing and advertising: to get their brand in front of potential customers.

Coronavirus Relief

It's no secret that the coronavirus pandemic has affected all types of businesses. If your business has been impacted, Clarify Capital offers financing to help move your company toward recovery and growth.

Refinancing Debt

Sometimes, it also makes more sense for a business to restructure its existing debts to get more competitive terms and interest rates. Emergency loans are helpful because they allow small business owners to make changes and consolidate their borrowing. This solution accommodates their present needs better, especially if they have trouble making payments.

Apply for an Emergency Loan

What Is an Emergency Business Loan?

Emergency loans refer to a type of business financing that offers a quick and easy application process so business owners can access capital in as little time as possible. These types of loans are often unsecured and can be obtained within a few days.

In addition, emergency loans generally don't have many restrictions on how businesses can use the funds. And they have minimal requirements that extend their availability to business owners with poor credit.

All in all, emergency business loans offer relief to businesses in need of additional cash due to disasters and other unexpected events.

Types of Emergency Business Loans

Emergency loans come in different forms and can be used for a variety of purposes, such as purchasing inventory or equipment.

The following loans have fast approval processes for businesses needing working capital in a jiffy.

Short-Term Business Loans

Short-term business loans are a type of business funding with short repayment periods. The repayment terms typically range from six months to two years. Approved borrowers receive a lump sum amount, repaid through fixed monthly payments that include interest and fees.

Most short-term loans are unsecured loans, meaning you don't have to put up collateral. In addition, they offer a flexible funding option for startups and new businesses that may not be eligible for traditional long-term bank loans. This is why short-term loans are the most popular form of small business loans.

Apply for Short-Term Loan

Business Line of Credit

A business line of credit provides flexible access to capital when you need it. With this type of loan, you get a credit line with a set credit limit. It works similarly to a credit card.

Aside from the benefit of having access to funds you can use on an as-needed basis, you also only pay interest on the money you withdraw. Plus, most credit lines are revolving. This means the account replenishes as you pay back what you borrowed.

A line of credit is an excellent funding option for covering business expenses when you're experiencing cash flow gaps. It helps you overcome the bump while you work on improving your bottom line and stabilizing your cash flow.

Apply for Line of Credit

Invoice Factoring

Invoice factoring is a form of invoice financing where you sell your unpaid invoices in exchange for cash upfront. This is why factoring is technically not a loan. But it does allow you to borrow money from a lender by using your accounts receivables as collateral.

In this type of agreement, the factoring company gives you a percentage of your total invoice value upfront. When the invoices come due, the lender collects from your customers. Then, they deduct any factoring fees and give you the remaining amount.

Since your company's accounts receivables secures the loan, you don't have to put up any collateral. Lenders are also less strict with personal credit, which means invoice factoring is a financing option available to business owners with less-than-stellar credit.

Apply for Invoice Factoring

Merchant Cash Advance

Merchant cash advances (MCAs) work similarly to invoice factoring. But with MCAs, you're selling your future sales instead of your accounts receivable. In a merchant cash advance agreement, you receive cash upfront in exchange for a percentage of your future revenue.

Then, the lender takes a percentage of your daily or weekly sales as repayment for the loan. The deduction applies until the loan amount is paid in full.

The eligibility requirements for merchant cash advances are also minimal. These types of credit have low documentation and are available to business owners with bad credit.

The benefit of an MCA is that you aren't obligated to pay a specific amount each time. When sales are low, you don't have to pay more than the allotted percentage from your sales. Still, consider the fees to decide whether your business can handle daily or weekly deductions from your cash flow.

Apply for Merchant Cash Advance

How Do You Get an Emergency Business Loan?

When you're looking for an emergency business loan, you probably needed the money yesterday. However, it's still prudent to take your time to understand your options. Before you start sending out loan applications, figure out why you need a loan.

There are many types of loans available to businesses. Having a clear idea of why you need additional capital can help you find the right loan to match your needs. Narrowing down your focus can help you figure out the ideal terms for your business and how much to borrow.

It can also make your search quicker if you understand what your company can meet when it comes to eligibility requirements. For instance, if you don't have any personal or business assets to put up as collateral, your options are limited to unsecured loans.

Having all this information can save you a lot of time and effort and bring you closer to getting the funds you need. Then, all you need to do is prepare a solid application and apply with the right documents to get your funding.

Make the application process even easier with Clarify. When you work with us, you only need to fill out one application form — it takes two minutes! Then, you're matched with a Clarify advisor who will work alongside you to choose the best loan option based on your needs. Talk to us today and receive funding in your bank account in as little as 24 hours!

What You Need to Apply for an Emergency Business Loan

Banks, financial institutions, and alternative lenders look at different qualifying factors to assess loan eligibility. The requirements vary depending on the loan, but lenders typically check credit history, how long your business has been in operation, monthly revenue, and how much debt your business can afford.

SBA disaster loans backed by the U.S. Small Business Administration (SBA) and traditional loans from banks are typically difficult to qualify for because they have stricter requirements. And although online lenders are more flexible, most also have minimum requirements for credit scores, annual revenue, and years in business.

Your chances of getting approved quickly might also increase if you can offer collateral.

Why Choose Clarify Capital for an Emergency Business Loan

At Clarify, we understand that it's always crunch time when you run a business. And in times of crisis, speed and efficiency are even more important. So, when unexpected costs come up and you need to act fast, we make the process of getting a loan as easy as possible to help you get back on track quickly.

On top of handling your business emergency, we don't want you to worry about hidden fees and penalties. That's why we keep things simple. You won't find any sneaky charges or confusing terms with us.

Financing with Clarify means you have an expert on your side. Just because your needs are urgent doesn't mean you should make rushed and misinformed decisions. Your dedicated advisor will work with you to find the best option out there. We strive to get you the lowest rate and most competitive funding available every time.

Emergency Business Loan FAQs

Below are quick answers to frequently asked questions. If you have other questions about our services or loan options, contact a Clarify advisor today.