Having a small business is no easy task. While you may have uncountable plans to grow, it’s not that easy to help them all come to fruition. Especially if you have no cash available.
All business owners usually need to get financing fast, so they may need to apply for some loans. Whenever you decide to start researching lenders, it may be hard to know which financial product is the right one for you. After all, there are quite a lot of options on the market that may be suitable for your business. But short term business loans are a great option.
Secured lines of credit are another viable financing option for businesses in need of fast funding. By using assets such as equipment, real estate, or accounts receivable as collateral, businesses can secure a line of credit with lower interest rates and higher credit limits, providing more financial flexibility and access to larger funds when needed. Secured lines of credit offer a secure and reliable funding solution for businesses seeking to manage cash flow, cover operational expenses, or embark on expansion projects.
What is a Short Term Loan?
First of all, it is important to say that the name of these loans refers to that a short term loan must be pay off in full in about 6 to 18 months. That offers a perk to the borrowers because the cost of capital will be always lower than the one in other types of loans.
Another benefit that these loans provide the borrowers is that after their applications are approved, they go through quicker than other traditional business loans.
How a short business loan can help your business
This kind of loan can benefit your business in different ways, but three advantages are crucial to mention in this article.
- Financial protection
If you are a small business owner, you have already learned that sometimes it is difficult to separate your personal life from business finances. For this reason, you may have felt tempted to pay out of pocket to fund your own business.
This can be dangerous for credit on both sides, so to get a short business loan can be the perfect solution to keep your two accounts separate and healthy.
- Deal with inventory
Extra money can be the answer you have been looking for when you are low on inventory, especially if a busy period of the year is coming up.
A short business loan can improve any kind of problem regarding stock by offering you the funds you need to provide your clients with the variety of products they usually want.
- Expand your business
There is a lot of different situations that can lead you to expand your business, such as renting a new office, opening an online store and hiring more staff, among others. A short term business loan allows you to access the things mentioned above or any other that can help you to make your business bigger without experiencing additional stress.
That’s all great in theory, but what about real life? Let’s look at a case study.
A short term business loan that changes someone life
Sheri originally started her business at her home. Five years ago, she had an idea that she developed into a real business: to design, manufacture and sell clothes for moms-to-be.
According to her own experience, sometimes it was difficult to find cool, comfortable and beautiful clothes while being pregnant, so she wanted to make future mothers look more fashionable.
But when her designs started to become more and more successful, she realized that it was time to expand her business and get some help.
Sheri got the necessary information to apply for a short term business loan.
She had to check if she met the qualifications required, for example, a specific personal credit score number, certain time in business and a definite amount of annual revenue. On the other hand, each lender demanded different requirements to grant her the loan she needed.
When she finally found the one that fitted her business needs, she expanded her business by hiring dressmakers, contacting a marketing online company to promote her products, and renting a formal office to run her thriving company.
Don’t let your business stagnate, look for financing
Short term business loans can be the ideal financial product for those entrepreneurs who want to change the course of their business towards real success. For that reason, if you have a good business idea or need funds to make your business grow, it may be beneficial for you.