How long does a business loan take to get approved?

There are times when business owners need to find a business loan in a hurry. And some types of business loans can be super quick to arrange. So, “how long does a business loan take to get approved?” and is there anything you can do to speed things up?

In this guide, we take a look at how long it takes for a business loan to get approved. We also answer common questions like “what type of business loans are quick to arrange?” and “is quick business finance more expensive?”.

Table of Contents

How long does a business loan take to get approved?

So how long does it take for a business loan to get approved? The answer is that it depends on lots of factors including the type of lender, type of business loan and the financial health of your business.

In general traditional lenders can take longer to approve business loans than smaller lenders.

Some types of business finance usually take longer to arrange. Secured loans often take longer to set up than unsecured loans because the lender needs to check out the worth of your assets. Equity finance can also take a long time to arrange because investors need time to assess your business plan and your financial reports.

Being prepared will give you the best chance of getting quick business finance. Applying to the right lender, for a quick to arrange loan and getting all your paperwork ready will help speed things up as much as possible.

Key points

  • Traditional lenders often slower than new business loan companies
  • Larger loans with longer terms usually take longer to arrange
  • Secured loans be slower to set up than unsecured finance
  • Having all your financial records ready can save time
  • Some merchant cash advances, invoice finance and small business loans can be arranged within 24 hours.
  • Flexible finance allows you to dip into the loan pot when you need it.

A summary of the different types of business loan and how long they take to arrange

Here is a summary of the different types of business loan and how long they take to arrange:

Types of business loanHow long it takes to arrangeWhat affects the length of time

Bank overdraftIf you have a business bank account then it may come with an overdraft facility. If not you may simply need to ring your bank to arrange one.It depends if you have an existing business bank account. A new bank account can take a few weeks to open.
Simple business loanCan take anything from a few hours up to several weeks.The type of lender, the size of loan and if it’s secured may affect how long it takes to arrange.
Asset financeAsset finance can take a while to arrange as lenders will assess detailed financial information and may perform an asset valuation.The size of your loan and length of term may affect how long your finance takes to arrange.
Merchant cash advanceMost lenders can make a quick lending decision on the same day or within 24 hours.You may need to link your business bank account to the lender.
Invoice financeCan be quick to arrange with some lenders advancing your loan within 24 hours.You may need to provide detailed information on how quickly your customers usually pay.
Commercial mortgageThis can be lengthy to arrange as the lender will need to see financial statements and perform a property valuation.Some lenders may provide quicker loans than others.

Business acquisition loanThis can be a complex process as the lender will need to see finance records and details of the business you are buying.Depends on the nature of your business acquisition and your financial records.

Equity financeThis sometimes takes months as you will need to provide detailed information and draw up a legal contract.This depends on the investor and the success of your negotiations.

What type of business lenders can approve your loan quickly?

Specialist business loan companies are often set up with small businesses in mind. They understand how small businesses work and why you might need quick business finance.

Some lenders can pre-approve your business for a loan in under 60 seconds. Not only that, but they can fully set up your loan and give you access to your finance within a few days. Other lenders may take weeks, or even months, to process and approve your loan and make a payment.

If you’re in a hurry, it’s worth doing your research before you apply for a business loan. Spending a few hours now could save you a long time and a big headache waiting for business finance to come through.

What type of business loans are quick to arrange?

Smaller, unsecured business loans can be quick to arrange. Lenders won’t need to value assets and may have a simpler application process.

Here’s a summary of types of business finance that are often quick to arrange:

  • Merchant cash advance - this can often be arranged within 24 hours, although you will usually need to link your bank account to the lender.
  • Buy now pay later finance - this can be arranged quickly and will allow you to access money from your customers more quickly.
  • Invoice finance - this is often quick to arrange and will release cash tied up in unpaid invoices.
  • Small unsecured loan - this may be arranged quickly with some lenders.

What types of business loans are slow to arrange?

Larger business loans and those with longer payment terms are usually slower to arrange than smaller loans. Other factors like the use of the business loan and whether it is secured also affect the time it takes to arrange business finance.

Here’s a summary of types of business finance that are often slow to arrange:

  • Large loans with a long payment term - lenders may have extra application procedures in place.
  • Secured loans - lenders will need time to value your assets.
  • Commercial mortgage - lenders will need time to value your property.
  • Equity finance - investors will take time to evaluate your business plan and a formal contract will need to be put in place.

What affects the length of time to approve a business loan

Here is a summary of the main factors that affect how long is takes to get a business loan:

  • Lender’s process - every lender has a different application process and some take more time than others.
  • Lender’s workload - applying during a busy period can affect the time for a lender to process your loan application.
  • Type of finance - some types of finance are quick to arrange, because the lender has immediate access to your records.
  • Amount or length of term - a longer term and a larger loan amount may require more checks from the lender.
  • How long it takes to provide information - you can speed up the process by having documentation, financial reports and bank statements ready when you make your application.

What can I do to speed up applying for a business loan?

Here are a few ideas to speed up applying for a business loan:

  • Research lenders and find those with a quick application process.
  • Consider applying for a loan that’s quick to arrange like a small unsecured loan, merchant cash advance or invoice finance.
  • Prepare for your loan application by getting together information like bank statements, financial records and details of assets used for security.

Why are flexible loans helpful if you need quick business finance?

Flexible business finance is not always the fastest to arrange, but it is very quick to access once you have it in place. For example, a business overdraft or a business line of credit will let your business borrow funds up to a pre-agreed level. You can usually borrow these funds straight away, with no further checks.

Frequently asked questions

What can I do to bridge the gap while I’m waiting for business finance?

If you’re applying for a business loan, then it can sometimes take a while to arrange. So, is there anything you can do to tide you over until the new funding comes in?

Here are some possible tips and options:

  • Apply for a short term loan - some loans are very quick to arrange and could tide you over for a few weeks.
  • Apply for a bridging loan - bridging loans are designed to help with short term funding needs. Interest rates can be expensive, but you’ll hopefully only need it for a short period.
  • Speak to your existing lenders - some lenders will consider letting you roll up your interest or have a payment holiday.
  • Slow down your expansion plans - sometimes businesses need to delay expansion plans or rearrange short term commitments to help them cover a funding gap.

In the longer term, it’s a good idea to work at forecasting your cash flow so you can head off any problems before they get too serious. Predicting your cashflow at least a few months in advance means that you’ll have longer to apply for any business finance in the future.

What business loan has the quickest application process

Simple, unsecured business loans, merchant cash advances and invoice finance can all be quick to arrange, depending on your lender.

Secured loans such as asset finance, commercial mortgages or business acquisition loans, may be slower to arrange as they require a detailed asset valuation.

Is quick business finance more expensive?

Quick business finance can be more expensive for a couple of reasons.

It’s partly because you might not have time to shop around if you need finance in a hurry. It’s also because quicker forms of finance, like merchant cash advances and unsecured loans can charge higher interest rates.