It’s safe to say that if you need of funds to deal with a short-term issue with cashflow or to take advantage of an offer you can’t refuse, then you’re going to want access to funds pretty quickly.

For details of all the funding types available download our guide

According to the Funding Exchange SME Lending Monitor, which collates data from 300,000 businesses, just over a quarter of businesses that it surveyed draw down funds within 14 days of applying.

That’s great, but times do vary and some funds from some debt finance products can take longer to find their way to your bank account than others. This is because the decision-making process can vary depending on the lender and the type of funding offered.

Let’s have a look at different types of funding and how long it typically takes for applicants to be able to draw down funds:

• Commercial loans
• Invoice finance
• Trade finance
• Crowdfunding
• Advice

Commercial loans

If you’re after a quick fix, a short-term loan might be easier than a longer term one because it’s likely to involve smaller amounts. Banks and alternative funders have various decision-making protocols in place. How quickly you get a decision and can draw down funds depends on whether you satisfy their criteria and how quickly you provide the information that they ask for.

Typically, the decision-making process for a commercial loan through a traditional bank takes from three to six weeks and with alternative lenders from one to three weeks. It all depends on whether your go for fixed or variable rates of interest and whether the loan is secured or unsecured. Business loans are handy because they are available at any stage in the business lifecycle and they’re cost effective. Click here to find out more about how Pegasus Funding can help you source a commercial loan.

Invoice finance

There are two types of invoice finance, discounting and factoring. They both work by releasing funds that are held in your unpaid invoices. You are basically raising funds based on the debt owed to you.

Invoice finance is a form of quick release finance and it’s a great quick fix for short-term cashflow problems. Because funding is secured against invoices and no other assets are required up to 90% of your invoice value may be released to you within 24 hours, however putting a facility in place will typically take between one and four weeks.

Click here to find out more about how Pegasus Finding Solutions can help you with invoice finance.

Trade finance

Trade finance is a great way of financing imports and exports, as well as your supply chain. If you have confirmed customer purchase orders and suppliers quotes in place, you can finance the transactions using funds from an external lender. Trade finance allows you to purchase the materials or stock to fulfil the order without leaving you out of pocket while you are awaiting payment from your customer.

If you are importing, trade finance closes the funding gap between an order you’ve received from a UK customer, and the payment required by your overseas supplier. It works to ensure that there is a trust between the buyer and the seller, mitigating exposure for both. Typically a facility or trade can be put in place and funds drawndown within one to two weeks.

You can also take advantage of stock finance which is not based on a single buyer/seller relationship, but on the purchasing and storing of your stock. The lender will have security over the stock for a period of between 90-120  days typically. This provides a revolving facility which a business can draw down as and when it needs it.

For more on trade finance click here.

Crowdfunding

Crowdfunding is all about you making a successful pitch to a pool of potential funders via an online platform. How long it takes for you to get funding depends largely on the quality of your pitch, how engaging your product or service is and the funding goals that you set yourself.

According to some sources the average length of time a campaign takes is 35 days, our view us that this is nearer to three to six months . Successful funders update their campaigns eight times to promote it and engage with potential funders on a platform such as Kickstarter, CrowdCube and Seedrs.

As your campaign progresses you will receive pledges from funders. You will receive these payments once the project has closed successfully.

Project supporters will be charged when they make their pledge. The funds will be transferred to you once the project closes successfully. Payments will be transferred into the specified bank account within seven working days after the project has closed and you have successfully verified your ID against your bank account details.

To find out more about crowdfunding click here.

Advice

You can usually access funds for your business, from as quickly as 24 hours after application in some cases. If you need more advice on debt or equity funding solutions call 0203 327 0567 or fill in our contact form and one of experts will be pleased to assist you.