When are Short-Term Options the Right Solution?
New small business loans are ideal when you need a quick injection of cash to cover daily operations, buy stock, pay off longer-term loans or avert a crisis.
Inventory Loans Small Business
If you need new stock or equipment, maybe because you’ve received a large order, business inventory loans are great as they can help you bridge the financial gap.
Emergency Business Loan
Anything can happen in business. If you can’t cover the cost of an accident, theft or any other unexpected event, a short term emergency loan can provide a quick solution that doesn’t leave in debt for years.
You Have a Short-Term Need
Sometimes, there may be a deal that’s too good to miss. If you’ve been offered a great deal on something that will help your business but you don’t have the capital, short term money loans can be a great way to seize the moment.
Advantages and Disadvantages of Short Term Loans for Small Businesses
Even the best small business loans have their advantages and disadvantages. To ensure you get a deal that’s right for you, make sure you consider the following positives and negatives:
Advantages of Short Term Loans
Build Your Business Credit
As a new business, it can be tough to prove you’re a reliable borrower if you don’t have any credit history. Short term loans are a form small business line of credit that can help you build up a better reputation.
Seize Growth Opportunities
Getting a business loan can be for something as simple as seizing an opportunity. If you don’t have the capital, short term business loans can help you take advantage of a great deal.
Quick Approval and Funding
In most cases, you’ll receive the money for your short term loan within a few days (sometimes a few hours). Indeed, look online and many lenders will entice you with headlines such as “business loan instant approval.”
Disadvantages of Short Term Loans
Higher Interest Rates
Short term business loan interest rates can be high. Because you’re repaying the debt over a shorter period, lenders can charge upwards of 14% APR to cover their costs.
Know the Risks
Naturally, with less time to pay, short terms loans can put you under more pressure. If you find a short term loan online, make sure you’re prepared for higher interest rates and frequent payments.
How to Qualify for Short Term Small Business Loans
To apply for a short term loan online and have any chance of being accepted, you’ll need to provide the following:
Get Your Paperwork ready
To speed up the application process, make sure your accounts are in order and you’re ready to provide all the details about your business.
Show an Ability to Pay
You’ll need at least some financial and assets/capital to prove you’re able to meet the repayments.
Reasonable Credit Score
Because short term loans can be higher risk than other financial products, you’ll typically need a strong credit score of 500+.
Low Credit Utilization
Ideally, you don’t want to ask for more than 30% of the total credit available to you. The total credit is based on your credit score and assets.
How Much Can You Get from a Short-Term Loan?
Getting a small business loan is all about necessity. In other words, you shouldn’t borrow unnecessarily or more than you can afford. What’s more, getting a business loan should be factored into your company’s plan and not something you do on a whim. With that in mind, short term loans usually range from $2,500 to $250,000.
Short Term Business Loans For Bad Credit
Perhaps one of the most overlooked benefits of short term loans is that you don’t always need good credit. Yes, a strong financial history will help you receive a better deal. However, you can find lenders that advertise themselves with these types of slogans “short term loans online bad credit.” Basically, when it comes to short term loans bad credit offers, you’ll probably have to pay a higher interest rate. But there are deals out there and, what’s more, they can help you improve your credit score in the long term if you make repayments on time.
Boost Your Business With Short Term Loans
The best small business loans are a great way to bridge financial gaps and take your company to the next level. Although short term loans aren’t for everyone, they can cover unexpected costs, seal a once-in-a-lifetime deal or help you through a temporary downswing. By finding the right short term loans online, you can cover your financial problems and, potentially, make a success of your business.