What is the easiest type of business loan to get?

2 May 2022

How easy a business loan is to obtain depends on your business' circumstances and requirements and the lender and type of finance you want. You might find getting an unsecured business loan easier if you don't have business assets.

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Some business loans are easier to obtain than others. Every lender and product has a set of requirements that you'll have to meet to be eligible. Remember that the most accessible business loans can sometimes have the highest interest rates. 

What makes a business loan easy to get?

Before exploring some business finance options today, let's establish what we mean by "easy". For some, a business loan is easy to obtain if the application process is fast, whereas others will prioritise easy access to finance.

1. Eligibility criteria

Some lenders have stricter eligibility criteria than others. A business loan might be easier to obtain if it does not require you to have more than two years' trading history and a perfect business credit score

2. Application to funds in the bank

Some business owners might put a loan in the "easy to get" category if the application process is fast. Unsecured business loans tend to be quicker because you don't have to go through the asset valuation process. 

A lender or platform's technology infrastructure can also speed up the application process. Funding Cloud can provide business owners with instant, pre-approved offers. Our fastest time from application to credit approval is 21 seconds.

3. Application simplicity

Some loan application forms are more complex than others. The documentation required will depend on the lender you're looking to borrow from. Business banks will typically require extra documentation, such as a business plan or insurance. 

It can help to have the following documents to hand:

  • Business bank statements

  • Financial accounts

  • VAT returns

  • Management accounts

  • Directors' details

  • Proof of ID and address

4. Loan amount

Some lenders provide businesses with higher loan amounts than others without imposing strict eligibility criteria. Loan amount aside, the business finance market is opening up, and companies can choose from accessible options. 

5. Cost of capital

Typically, the easier a business loan is to obtain, the higher the interest rate is likely to be. Accessible funding - funding available to businesses with fewer options - comes with a higher risk to the lender so that the interest rates can be increased.

It's essential to understand what you're getting into when you take on any business debt, let alone debt with high interest. Be sure to explore all of the business finance options available to you to make the right decision for your business.

Merchant cash advance 

merchant cash advance is unsecured finance that can provide your business with a quick cash injection. You pay it back automatically through a percentage of your credit and debit card sales, so there are no fixed monthly payments to worry about (the amount you pay fluctuates in line with your trade). 

Find a merchant cash advance

Invoice finance

Invoice finance is quick to obtain and uses your unpaid invoices as security. The lender advances you up to 100% of your outstanding invoices' value, and the loan - plus a service fee - is repaid when your client pays up. It's a short-term form of finance.

Find Invoice Finance

Revolving credit facility

Revolving credit facilities are also unsecured. You agree to a maximum amount with the lender and can access funds for your business whenever you need them. RCFs can be suitable for business owners who experience cash flow fluctuations and need the occasional cash flow boost to support their working capital needs. 

Find revolving credit facility

E-commerce finance 

E-commerce finance is funding for online retailers that don't have physical assets. If you opt for e-commerce finance, the lender will usually give you a loan which you'll repay using revenue from the sales you make on your e-commerce platform. 

Find e-commerce finance

Stuart Lawson

Chief Commercial Officer

Stuart is Chief Commercial Officer at Funding Options where he plays a key role in driving the growth of the business and its relationships with more than 120 partners. A finance industry veteran, he has a strong background in alternative finance, corporate and commercial banking, as well as global transaction banking.

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