Short Term Business Loans
The loan availed for period of few months to a year, either from a bank or a financial institution to meet temporary need of cash of a company. These loans are mostly collateral free depend on the lender and the terms of loan.
What Are Short Term Business Loans?
Small business often need short term loans than long term debt financing. Business prefers short term loans because of lower interest rates and more favorable terms than factoring and merchant cash advance. This type of loan is easier to get than an unsecured business line of credit.
This is a type of debt financing where the business seeks credit from other businesses those serve as their suppliers. In this the supplier usually extends the term of your business.
Working Capital Loans
This is a short term business loan that helps to fund your day to day operations such as cash flow requirements, bills, inventory, salaries etc. These are unsecured and usually availed by small and medium business.
Line Of Credit
It is similar as using business credit card. The credit limit is set and the business is able to tap in the line of credit as needed. The monthly installment payments are made against the amount borrowed. Annual percentage rate is charged low.
Merchant Cash Advance
These are generally available to the business which has steady flow of credit card receipts. Interest rates are higher and the term of maturity is short. The borrower makes the loan payment by allowing the lender to access its credit facility.
It uses company’s account receivable to raise cash for short term. It used when business is not qualified for loans by banks or other financial institutions. Business sells its invoice to the factor at a discount in order to collect cash.
These are the emergency short term loans that are easy to obtain. High street lenders also offer this type of loan. It carries very high interest rate. It has a drawback that the entire loan amount and interest should be paid in one lump.
Manage Cash Flow
A short term business loan is a facility that should be mainly used to manage your cash flow. These loans tend to be expensive in long runs and if used carelessly it can become great risk for your business.
Features Of Short Term Business Loan
These are EMI based loans.
No collateral required.
Repayment option is monthly or weekly.
Flexible repayment options.
Interest rates are based on eligibility.
Both online and offline business can apply.
How It Help?
The short term loans are mostly used to buy the inventories for the business whose sale is seasonal. These loans are also used to raise the working capital that covers the deficiencies in fund so that the business can meet the payroll and other expenses. These loans can also be needed to pay your own bills i.e. to meet your own account payable obligations. If your company is cyclical business than you may need short term loans to even out cash flow.
How To Qualify For Short Term Business Loan?
You have to present comprehensive documentation to the lender whether it is a bank, credit union, SBA, mutual bank or any other type of lender. The lender will want at least the record of your payment history for other loans, your business cash flow history, and payment history to your supplier. The lender can also ask for your income statement. Your qualifications help to determine whether your loan should secured by collateral or it should be unsecured.
Benefits Of Short Term Business Loans
Less Time For Incurring Interest:
The short term loans are need to be paid off within a year so there are lower total interest payments. The amount of interest paid is significantly low than the long term loans.
These loans are considered less risky than long term loans. These loans have short maturity dates. The borrower’s ability to repay the loan is less likely to change so the lenders tale less time to process the loan.
Easy To Acquire:
These loans are lifesavers for small businesses or individuals who suffer from less stellar credit scores. The requirements for short term loans are easier to meet, because such loans are generally for small amounts.
Collateral Free Loans:
These loans are short term loans so these are collateral free. You can get the loans for your business without pledging your business or personal assets.
What Our Clients Say?
Here are few reviews and comments from our clients.
The Financing Compass worked extensively with me to help me anticipate some of the issues that my business may face. Not many lenders would go to that length. They’ve been extremely supportive and a great resource.
Financing Compass enabled me to take advantage of an incredible opportunity to relocate and expand my business, at a pivotal time. The support I received from Financing Compass staff was priceless.
Working with Financing Compass helped me develop my business plan, ideas, and brand before getting started so that I was prepared to open a successful business when I received my loan.
Are You Looking For Our Services?
If you want short term business loan to start your business you can contact us. We will provide you with the best service that will benefit your business.