At some point and time, for a myriad of different reasons, a lot of businesses (whether online or offline) will find themselves in dire need of additional funds.
The need for financing is generally prompted by clear signs of potentially better profits if the business owners expand and grow their operations. So it’s not uncommon to see businesses investing in new, more technologically advanced equipment, renovations, relocation or hiring new staff.
If you, as an entrepreneur and a business owner find yourself in a tough financial situation, you should know that you use short term business loans to solve your investment needs. There are enough banks and alternative lenders that offer such loans.
What are short term business loans?
Short term business loans are essentially a type of business capital that lenders give business owners at an interest.
On approval of your loan application, you’ll get a lump sum upfront, which you are to repay over an agreed period of time. Most short term business loans providers can fund business owners in a short span of days.
So, if there is a time-sensitive opportunity for your business to make some great profit, it’ll be good to invest this short term business loan on it.
Upsides and downsides
The majority of these loans offered by lending companies are near exclusively applied for online. Ergo, it’s easier to qualify for and quicker to fund.
On the other hand, compared to traditional business loans, short term business loans amounts are generally much smaller. The repayment period is much shorter. Interest rates are higher and some loan providers may insist on weekly rather than monthly repayment schemes.
What do I need to apply for a short term business loan?
The online process for short term business loans is generally easy. You will simply need to provide your credit score, bank statements, and tax returns. Applying on-premise, you may need: a copy of your driver’s license, proof of ownership of the business and updated bank statements.
Do I have any other options for quick funding?
Of course, there’s always the good, reliable, old-fashioned credit card.
Today, close to 200 million Americans have credit cards. Surely, you also have easily one or two of these and if you really need quick cash because you don’t want to miss out on a particularly volatile but very promising opportunity.
Well, there are business credit cards too that can help you get quick access to funds and whenever you need them. These are perfect to fund your business’ needs and keeping your personal and professional finances separate.
Plus, by using your business credit card you can start building strong business credit.
You’ve got to do your homework
At the end of the day, you may have to ask yourself: What do I need a short term business loan for? Will getting money to investing in my business (expanding my operations by getting new equipment, or hiring that social media advertising guru) result in better profits? Can I make the repayments on time without adding strain to my cash flow? Or do I just need cash for one-time expenses? If so, would a business credit card work better?
Mull over these questions seriously and, when you have your answers, make the right choice.
It behooves you to look closely into these options until you find one that will suit your purpose and circumstance well.
Short term business loan: Success born out of a website
John has been creating websites mainly for individuals. Initially, he has been doing this as a hobby but nowadays this is his main source of income.
His work has caught the attention of a growing restaurant chain and its management asked him to create and maintain their website. John realizes that he will spend a lot of time creating the restaurant chain’s website and thus he will have to decline requests for other individual websites.
Aside from his personal expenses, John will have to pay upfront business expenses, such as registration fees and the like. He is confident, though, that when the restaurant chain’s website is set up, he will receive more than what he will have spent.
In the meantime, he will need at least $18,000 for expenses. After asking around, he is informatively introduced to short term business loans. After doing his research, John finally finds the right short-term business loan for his needs.
Not having to worry about finances, John finishes creating the website. and now he is receiving requests from other organizations that need websites.
Business credit card: Sucess one shoe at a time
Helen of Portland, Oregon loves shoes. She opened a show store some months ago and now she’s happier than ever. She receives a modest income with the current line of shoes she offers but realizes she needs to expand in order for her to be really successful.
After careful research, Helen realizes she would need more money.
She knows that she will need to buy more models constantly, so a business loan won’t really work (she doesn’t have to go through the hassle of getting loans constantly). She went to her bank and, after talking to a bank executive, she realizes that what she needs is a business credit card.
Now she can make monthly purchases of new models. At the same time, she’s building business credit so that she will be able to get good loans whenever she decides to expand her business.
This opened doors for Helen and her business is slowly getting more and more clients. Not far off in the future, she will think about renting a bigger space to sell even more shoes.
If your business shows great promise with growth and expansion but you’re running on a tight budget, try finding the option that best suits your business and your needs. Don’t let success escape!