What exactly is a short-term business loan and how can short-term financing help a business?
Managing cash flow is a perpetual challenge for anyone running a business. If you manage a small or medium-sized business there are a range of hazards, delays and problems that can mean you experience a temporary shortfall in income. From seasonal trade issues, slow payments and market fluctuations, managing business finances can sometimes feel like navigating an obstacle course.
As a business, you have to be able to meet your outgoings in a timely manner if you’re to continue trading. In some cases, severe cash flow problems can ultimately lead to the closure of an otherwise profitable business. One means by which businesses of all sizes can overcome cash flow problems is through a short-term business loan.
Why is short-term financing for businesses important?
Short-term financing is a vital tool for businesses looking to bridge a cash flow gap, ensuring that daily operations run smoothly. Short-term financing provides quick access to the capital needed for covering immediate expenses such as inventory purchases, unforeseen emergencies or payroll.
In dynamic markets, where you need to move quickly to take advantage of commercial opportunities, short-term financing enables businesses to adapt quickly to changing customer demands.
What are the benefits of short-term financing for businesses?
If you want to know how short-term financing can help a business then it’s important to consider some of the benefits. These include:
- Short-term business finance is accessible
Short-term business loans are usually not secured on assets, so there’s less administration. Lending criteria tends to be less exacting, meaning that smaller, short-term loans are easier for most businesses to access. You can have the capital you need quickly, making it perfect for emergencies. What’s more, the application process is also relatively simple, meaning you won’t waste time dealing with paperwork and gathering documents.
- Short-term finance is cleared quickly
Unlike longer-term loans that you’re likely to be paying for years to come, short-term finance is structured to be paid back over a relatively short period of time. This reduces the risk of unforeseen circumstances pushing you into financial difficulties at a later stage.
- You pay less interest overall
Interest rates on short-term business loans will usually be higher than those found on longer-term financing options. This is because the lender will generally have lower lending criteria for short-term loans, meaning they carry extra risk. However, because the loan is being paid over a shorter period of time, the borrower will pay less interest on the loan amount overall.
- Short-term finance is flexible
Whether you need funds to purchase extra inventory, to settle an unexpected bill, need extra working capital loans to cover an increased wage bill, or are launching a new marketing campaign, short-term business financing may be the answer. It’s a fast, flexible option enabling businesses to react to unforeseen circumstances and seize new opportunities.
Short-term business financing with Business Finance House
At Business Finance House, we can help you access the financing you need when you need it. Short-term business loans are ideal when you need fast, flexible funds with a shorter-repayment period. We work with 80 lenders to find the most appropriate loan for your particular circumstances.
With a wealth of experience, our expert team is on hand to help you find the right funding solution for your business needs, we cover all locations, from business loans in Liverpool, Cheshire, or nationwide!
Want to know how to get a short term business loan, then why not contact us today to find out more and to discuss your options?
