The early days of a small businesses’ growth can be extremely trying. This is usually the make or break period for any company. It is where the men are separated from the boys. The hardest part about this period is the fact that there just isn’t a consistent revenue stream for the company to survive sometimes, let alone expand and grow. This is why so many companies take out loans at the beginning of their development so they growth capital.
The problem is that small businesses still run into issues from time to time when it comes to liquidity. Traditional bank loans are not a good option when it comes to this situation. This is because a long-term loan takes way to long to be completed to help anyone through an emergency situation. This is why a lot of new companies turn to short-term loans to help guide them through these times. If a company needs some equipment financing to help repair or replace a piece of equipment that is broken and is vital to their day to day operations a short-term loan is very advantageous. This is not the only advantage of short-term loans.
1. Payment – Many lending companies that offer these types of loans offer a few different ways that the company can pay back the funding that they have received. Businesses can even choose the daily option to make small incremental payments every day until the principle is paid off. There are also options for weekly and monthly payment plans.
2. Red Tape – It is a much more simple process to be approved for a short-term loan. Companies must just provide bank statements proving that they meet the minimum requirements for whatever loan it is that they are seeking. This information can be processed entirely online. Most people receive a response in just one day and have their funds in a maximum of 5 business days.
3. Collateral – Most short-term loan lenders do not require the small businesses that are seeking these loans to offer up collateral against it. This means that companies that are seeking these loans are taking a much lower risk when it comes to their assets. This is ideal because many of the companies that are seeking these types of loans are not in a position to take a big risk in terms of assets. This, along with the speed, are the two main reasons they are so effective.
With this, trying to grow your business has a lot of ways, you may try them and take the risk, and make sure that study them beforehand 😉