As you’re probably aware, businesses are always growing and evolving, which means that there will be some point where you find yourself in need of more funding to cover your expenses and other business-related costs.
If you have great credit and can secure financing through traditional means, that’s great; but if you don’t, then finding the right short term business loan could be your solution to fixing your commercial needs. It’s easier than you think!
Is it time to get some help?
If you can’t fix your commercial needs on your own, it may be time to look into short term business loans.
These loans could be used to cover things like inventory or equipment expenses or to provide working capital if you’re dealing with slow seasonality.
Because these types of loans are more tailored to businesses, they tend to have better interest rates than personal loan options and aren’t typically subject to penalties for early repayment (though always check with your lender).
Short term business loans also don’t require collateral, meaning that even if you have bad credit (or no credit), lenders may still be willing to work with you.
If you need working capital and need it now, then consider getting a short-term business loan.
However, as mentioned earlier, not all lenders work with people who have bad credit.
If you have limited funds and need to get your business up and running quickly, it may be time to consider whether you can apply for a different type of loan—one that may be subject to stricter standards.
Applying for a short-term business loan
If you’re looking for a financial solution to fix your commercial needs and meet your funding requirements, then applying for a short-term business loan is an option worth considering.
But how does it work? In general, businesses opt for short term loans as they are provided at lower interest rates when compared to long-term loans.
A quicker approval process is another factor that makes short term business loans an ideal option in today’s scenario.
For example, if you want to start or expand your retail outlet and have all required documents handy, chances are you could get approved within 24 hours of applying.
If that doesn’t make sense right now, don’t worry!
To put it simply, short term business loans are tailor-made for businesses that are expanding or require funding for inventory and/or working capital needs.
These loans tend to be around $10,000 – $1 million and can be issued for any period between 1 to 12 months. Typical uses of short-term business loans include
The lending process explained
When you’re in need of a financial solution, finding one that’s fast and affordable can be difficult. That’s why short-term business loans are becoming increasingly popular; they’re an alternative to traditional lending methods and offer more than one loan option depending on your personal needs.
Most loans last 12 to 24 months, making them ideal for dealing with pressing commercial needs like paying employees or purchasing equipment.
As opposed to long-term financing, which is usually tied to larger purchases like real estate or vehicles, short-term loans work well for emergency situations that require quick solutions.
These loans also have competitive interest rates compared to other types of consumer finance options available today.
The application process for a short-term business loan is similar to other types of loans you might take out, but that doesn’t mean you should rush through it.
Be sure to provide lenders with all pertinent information up front. Don’t forget to include how long you need to make payments and proof of ownership when applicable, as well as contact information for yourself and any business partners.
Make sure everything is clear and accurate before submitting your application so your chances of getting approved are higher.
Securing your funds fast
Most business owners are looking for financial solutions that will help them meet their short-term needs. One of those solutions is a short-term business loan.
If you’re in need of an influx of cash, these loans can help. You’ll receive funds quickly and get on your way to achieving your goals without having to put off projects until later or risk missing out on an opportunity because you don’t have money right now.
And when it comes to financing, time is always money—these loans are fast and convenient. These days it can take weeks or even months to receive funding from traditional lenders; if you need funds immediately, short term business loans might be more up your alley.
Apply for one of these loans and get funds quickly. Many are completed within 24 hours. You’ll also enjoy low fees, which can help you keep more of your money and spend less time paying fees.
And because they’re unsecured, you won’t have to put up collateral, too—it just means your funds will be released faster because there’s no waiting around for approvals or getting caught up in complicated paperwork.
What are your options for repaying?
The main options for repaying business loans are either: (1) paying it back within one year, or (2) paying it back within five years.
Whatever option you choose depends on your business’s cash flow and cash position. To pay off a short-term loan quickly, make sure you can dedicate enough money to pay off your loan in less than a year.
For example, if you need $100,000 to grow your business but only have $60,000 in cash flow per year, consider taking out two loans: one for $40,000 and another for $60,000.
A short-term loan is typically used to fill in financial gaps until you can secure more permanent financing.
The most common reason for repaying it in less than five years is because your business needs working capital quickly and can pay off that loan just as fast.
For example, if you have an upcoming project that requires $20,000, but don’t have time to wait for a long-term loan approval process, consider taking out a three-month loan for $20,000.
The benefits of getting help from the bank
There’s no doubt that business owners want to finance their companies themselves. After all, having multiple sources of financing can complicate things and make it difficult to get things done quickly.
In some cases, taking out a loan or two is good for businesses–but don’t go overboard. If you’re looking for $250,000 to open your first franchise location, think about how borrowing money will impact you down the road.
If there’s any chance of you needing funds in six months, keep searching for local investors instead. Banks may be willing to help small business owners as much as they can–but if you aren’t careful about managing your debt and spending wisely, there are plenty of circumstances where your loan request won’t pan out.