Updated October 20, 2021
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Are short term business loans right for you?
“Short term” usually means there is a certain amount of time to repay the loan. The term is usually for a year and a half or less.
Start-up companies and small businesses need money fast. Short terms loans can provide access to funds within 24 hours if necessary.
What are the qualifications?
Most owners can qualify for a short-term loan with lower requirements than long-term loans. Short-term loans come in various forms, so each lender will most likely have its own qualifications.
You should be ready to provide the following items:
What is the difference between short-term vs. long-term interest rates?
The main difference between the two loans is the amount of money that you can borrow. The higher the loan amount, the longer it generally takes to repay it.
It also depends on the type of loan you get. For example, a mortgage loan might require a risk analysis process before loan approval. Whereas you can receive some short-term loans right then and there.
Pros vs. Cons
As with most services, there are pros and cons when it comes to short-term loan rates.
Short-term loans have several benefits to help you get loans quickly.
- Low credit requirements
- Fast turnaround on funding
- Minimum requirements on revenue
There are a few disadvantages when it comes to short-term loans.
- Frequent payments are necessary
- High-interest rates
- Increase in the chance of debt
- Higher need for capital to finance
How do I qualify for a short-term loan?
There are a few different ways to meet the requirements for a short-term loan:
- Quality income – being able to pay off your loan on time can be a huge plus to a lender
- Good credit – Having a credit score of 670 or more is ideal. Your credit history may determine the terms of your loan as well as eligibility.
Striking the right balance can mean everything. Short-term loans can help you meet your goals.
- Clients are not paying on time, leaving you short on funds
- Your equipment is not working properly and you don’t have the funds to repair
- Your business is growing and you cannot keep up with the demand
Get a Short Term Business Loan for your Business
Small Business Short Term Loan Resources
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