The time it takes to get a business loan depends on the type of loan, the lender and how quickly you can provide the information they need. A straightforward unsecured loan from an alternative lender can be approved within 24 hours and funded within a few days, while a secured loan from a high street bank can take several weeks.
If you need money quickly, the type of lender you choose and how well you prepare your application make the biggest difference. This guide explains each stage of the process, what can slow it down and how to speed it up.
Key Points
- An unsecured loan from an alternative lender can be approved within 24 hours, while a secured or bank loan can take several weeks.
- Missing documents, mismatched figures and valuations are the most common causes of delay.
- Preparing your documents in advance, choosing the right lender and using a broker can help you get funds faster.
What Are the Stages of Getting a Business Loan?
The stages of getting a business loan usually are the following:
- Eligibility check: The lender or broker checks whether your business meets its basic criteria, usually with a soft credit search that doesn’t affect your credit score.
- Application: You provide details about your business, how much you want to borrow and what it’s for, along with supporting documents.
- Underwriting: The lender reviews your bank statements, accounts and credit history to decide whether to lend and on what terms.
- Offer: If you’re approved, the lender sends you an offer setting out the rate, term and repayments.
- Acceptance and checks: Once you accept, the lender completes final checks, which may include a hard credit search and identity checks.
- Funding: The money is paid into your business bank account.
Some of these stages can take minutes, while others can take days or weeks, depending on the lender and your circumstances.
How Long Does Each Type of Business Loan Take?
Different types of business loans can take varying amounts of time to apply and be accepted for.
- Unsecured business loans from alternative lenders – a decision within 24 to 48 hours is common, with funds often released within a few days.
- Short-term loans and tax funding – often similarly quick, since these are usually unsecured and assessed mainly on your bank statements.
- Asset finance – often a few days to a week or two, depending on the asset and the supplier.
- Secured loans and bridging loans – usually longer, as the lender needs to value the property or asset and complete legal work.
- High street bank loans – can take several weeks, particularly if you’re not an existing customer or the bank asks for a detailed business plan.
At Acceptance, most applicants get a decision within 24 hours, with funds released in as little as 48 hours. Funding is usually completed within a week, although this can take longer if a lender needs more information.
What Can Slow Down a Business Loan Application?
The most common causes of delay for a buisness loan application are:
- Missing or incomplete documents. If a lender has to come back to you for bank statements or accounts, your application is paused until you send them.
- Figures that don’t match. If the turnover on your application doesn’t match your bank statements or accounts, the lender will need to ask questions before going any further.
- Out-of-date company records. Lenders check your details against the Companies House register, so overdue accounts or old addresses can raise questions.
- Credit history issues. CCJs, missed payments or defaults don’t always mean a no, but they may mean extra checks or a referral to a specialist lender.
- Valuations and legal work. Secured loans need the asset or property to be valued, and solicitors may be involved.
- Weekends and bank holidays. Lenders and banks don’t usually process payments on non-working days.
How Can I Get a Business Loan Faster?
To get a business loan faster, you can follow these basic steps which will make sure you are well-prepared for a quick application and decision.
Get your documents ready before you apply
Gather your recent bank statements, company details and identification for the directors before you start. If you’re a sole trader, have your SA302 tax calculation ready to show your income. Our guide on the documents you need to apply for a business loan explains what lenders usually ask for.
Choose the right type of loan
If speed matters, an unsecured loan is usually quicker than a secured one, because there’s no valuation or legal work. Think about whether you really need to offer security, or whether a smaller unsecured loan would cover what you need.
Apply to the right lender first time
Every rejected application costs you time, and repeated hard searches can count against you. Before you apply, it’s worth understanding whether applying for a loan will affect your credit score, and how soft searches let you check your options without leaving a mark.
Use a broker
A business loan broker knows which lenders are likely to approve a business like yours and how quickly each one works. Instead of applying to lenders one at a time, you complete one application and the broker sends it to the lenders that fit, which can save days or even weeks.
Respond quickly
If a lender or broker gets in touch with a question or a request for documents, reply as soon as you can. A quick response can be the difference between getting funds this week and next.
Is a Faster Business Loan More Expensive?
No, a faster business loan is not necessarily more expensive. The speed of a business loan depends more on the type of loan and the lender’s process than on the price. Some fast unsecured loans do have higher rates than slower secured loans, because the lender is taking more risk without security. Always compare the total amount repayable, not just how quickly the money arrives.
If you know you’ll need funding for a specific date, such as a tax deadline, start the process a few weeks early. That gives you time to compare offers properly rather than accepting the first one available because you’re out of time.
See also: What Are the Benefits of Using a Broker Over a Lender?