Short-term business loans represent an easy method of bridging some breaches in your company, usually in cash-flow. They are fairly easy to obtain and can have terms of a maximum of 3 years or a minimum of 90 days.
But what needs would a short-term business loan cover? Quite a few. Let’s see what these are.
Short-Term Business Loans Uses
An short-term business loan is especially helpful when you’re in high need of money and you don’t have it, although you might get it in a certain time span. The money you’d get from the loan can compensate for that gap in the cash flow. Let’s imagine that your company is dealing with an unexpected crisis and you cannot force it to return you financial benefits in a timeframe of 1 or 2 months. This kind of loan gets approved really quickly; subsequently, you can use it in straightening the situation. Then you repay the loan, and that’s about it.
2. Starting a business
Short-term business loans are not only for already existing companies. You can use them as grants to cover the costs you need to launch your business. A short-term loan is an easier and quicker alternative than grants, though. Lenders do not care if your business is excellent or mediocre like grant-givers do. They only care for the repayment.
3. Maintenance and repairs
A business can have its fair share of technical problems and malfunctions. For instance, a short circuit can fry all the computers in your company. You need money to replace them, but you don’t have it. That’s where the business loan comes in handy. In an age when almost everything is computerised, a company without computers is doomed to failure. The main idea is: use a short-term loan to cover maintenance costs for things you absolutely cannot do without.
4. To even the difference between payables and receivables
Receivables represent the money that comes into the company. By contrast, the payables represent the money that goes out of it. This mainly concerns paying your bills on time. If you have a lack in receivables and plenty of payables, it might be a good idea to take a short-term business loan to even out that difference. This works when you know for sure that your receivables are on their way, and they’re going to be there sooner or later.
5. Extra employees
If the production of your company is exceeding your expectations, you might need some additional staff, at least for a short time. Short-term business loans can help you to pay them.
These 5 are the most common needs covered by short-term business loans. For anything more serious than what we’ve mentioned above, you’ll probably need a long-term business loan that involves more money.
But, for minor things, a short-term business loan will work like a charm. Moreover, this is a lot easier to pay back than a bigger one, plus it gets approved in virtually no time at all.
Contact ALC Commercial today for your ideal short-term business loan or enquire here now.