Who are short-term loans meant for?
Throughout the year, various opportunities pop up for businesses that are almost too good to be true. Unfortunately, financing these opportunities can be a major concern, which is why many businesses miss out. Similarly, many small businesses go through brief periods of difficulty that can be alleviated with the right finances. Unfortunately, many loans come with long repayment periods.
Short-term loans are the exception. Much like standard term loans, these loans provide businesses the option of borrowing money and paying these loans back in fixed installments over a predetermined period of time – at an annualised rate of interest over the course of the repayment period. The repayment period for these loans, however, only lasts a few months. How can you tell if a short-term loan is for you?
- You need assistance paying off a general business expense. Term loans are best suited for business borrowers who are in need of finances to support general business expenses like paying off utilities or giving your premises a new look.
- You’re looking to pay your loan back in a few months. If the size of your loan is manageable and you only want your repayment period to last a few months, short-term loans are perfect for you and your business’needs.
- You have a good credit history. This mostly applies to borrowers seeking assistance from banks – they determine your eligibility based on your personal and business history. However, there are several non-bank lenders who would have a more diverse, yet potentially high-interest, qualification process.