Images by GettyImages; Illustration by Hunter Newton/Bankrate
Key takeaways
- Fast business loans can get funds into your account in as little as 24 hours but often come with higher interest rates and additional fees.
- Interest rates for fast business loans vary, and some lenders may utilize a factor rate instead of an interest rate.
- The cost of fast business loans will depend on the type of loan, repayment terms, interest rate and any additional fees.
With the cost of doing business increasing amid the new tariffs being implemented by the Trump Administration, your business may find itself in need of a quick infusion of cash. If that’s the case, a fast business loan may be the way to go. These loans, typically provided by online lenders, can provide funding in as little as 24 hours thanks to less rigid application requirements.
In exchange for that speed and convenience however, you may trade speed for a higher cost to borrow. Fast business loans often have steeper interest rates and additional fees compared to small business loans, making them more costly overall. Several factors influence the cost of business loans.
The cost of fast business loans often depends on the lender, the type of loan you’re applying for, the interest rate and any additional fees.
Lenders
Most lenders offering fast business loans are online lenders. They often specialize in fast turnaround times for applications and funding. You can get a fast business loan from an online lender without interacting with a lending rep — most applications are virtual and self-guided.
Fast business lenders
Some of the most popular lenders for fast business loans include:
For more lenders, check out our guide on the best fast business loans.
Loan type
Most fast-working online lenders offer loans similar to traditional lenders, like term loans and lines of credit, but also specialize in nontraditional loan types.
|
Loan type |
Purpose |
|
Online term loan |
A lump sum of cash that is paid back over a set period. Fast business loans often have shorter repayment periods than traditional term loans. |
|
Business line of credit |
Lines of credit operate much like a business credit card. You can take out as much cash as you need up to a predetermined limit, paying interest only on the amount you’re actively using. |
|
Equipment financing |
Designed to help purchase business-related equipment. Semi-truck loans are one common type of equipment loan. |
|
Invoice factoring/financing |
Leverages your unpaid accounts receivable invoices for cash. You can usually sell up to 85 percent of the total value of the outstanding invoices to a lender. |
|
Merchant cash advance |
Allows you to borrow a certain percentage of your average credit card revenue from a lender, usually paying it back with a factor rate instead of an interest rate. |
Interest
Interest rates will vary depending on how much you borrow, your personal and business credit scores and your chosen lender. Interest rates can also be variable or fixed. Here are some average interest rates for fast business loans as of May 2025:
|
Type of loan |
Average interest rate |
|
Term loan |
7.31% to 7.61% |
|
Business line of credit |
6.47% to 7.92% |
|
Equipment financing |
5.00% to 6.00% |
|
Merchant cash advance |
1.04 to 1.32 (factor rate) |
Factor rates
Some types of fast lending, including merchant cash advances, use a factor rate instead of an interest rate. Factor rates are expressed as decimals instead of percentages, typically ranging from 1.1 to 1.5. If a fast business loan uses a factor rate, first convert it to an interest rate to determine how much interest you’ll pay annually.
Collateral
Collateral is security for a lender if the business owner defaults on a loan. Most commonly, collateral is the asset you’re getting a loan for, real estate or cash. That said, it’s up to the lender to determine the appropriate collateral for the loan you’re applying for.
Fast business loans can be either secured or unsecured. Secured loans require collateral, while unsecured loans don’t.
Fast business loan fees
Apart from interest, fast business loans come with several fees and costs.
- Administration fee: A generic fee charged upfront, covering some of the paperwork and banking costs associated with processing your application.
- Application fee: A one-time, upfront fee paid when you submit your loan application. Not all lenders charge this fee.
- Credit check fee: A fee charged when lenders pull a hard credit check before approving a loan.
- Draw fee: If you have a business line of credit, you may be charged a fee when withdrawing funds from your account.
- Late fee: Usually a flat fee that’s charged when you miss a loan payment.
- Origination fee: Sometimes also known as an administration fee. Often, it’s assessed as a percentage of the money borrowed and deducted from the money disbursed at the start of a loan or added to the total loan amount.
- Prepayment penalty fee: When a loan is paid off early, you may be charged a prepayment penalty. Not every loan or lender charges prepayment penalties.
Repayment terms
Repayment terms outline how long you will pay back your fast business loan. Since a longer term means that you’ll be paying interest for an extended period, the exact term length affects the total cost of your fast business loan.
To save money on interest, you can often make extra monthly payments and pay off your loan early. Just be aware of any prepayment penalties or conditions in your repayment terms before doing so. In some cases, it may be more expensive to pay off your loan early.
Bottom line
Fast business loans can often come at a higher cost than getting a business loan with a standard approval process. The cost depends largely on the type of lender you use and how much interest that lender charges.
Typically, fast business loans are offered through online lenders, which are known for charging higher interest rates in exchange for their speedy and lenient approval process. Keep in mind that the cost will also depend on the length of time you’ll be repaying the loan and any additional loan fees the lender charges.
To keep costs low, you may want to research lenders with the lowest interest rates to see if you can balance the interest charged with a fast funding speed.
Frequently asked questions
Read the full article here
