When you run a business, there is nothing more important than the effective allocation of capital. If you have a sound financial plan, it is simpler for a business owner to minimise operational costs and ultimately maximise growth. In case you are unable to get additional capital from a bank, you could reach out to an alternative online lender to fulfil your needs.
There are all kinds of business owners, and each one has a different requirement- it’s not a one-size-fits-all approach. For instance, if a specific type of financing works for a business, it might not be very beneficial for others. Before we delve deep into why short term loans are helpful, let us understand what they mean.
What is a Short Term Business Loan?
In a nutshell, short term loans allow businesses to borrow a set amount of money upfront and then pay it back with interest, at regular interests. Unlike traditional long-term lending, you have to pay instalments in a shorter period of time, which generally ranges from 12 to 24 months. There’s another difference between long term and short term business loans – these are either secured or unsecured. You could opt for either, based on your requirement.
Advantages of Short Term Loans
Here are specific reasons why short term loans are your best bet:
They have a quick application process
Gone are the days, when business owners travelled from lender to lender to get a loan. Today, the process is much more straightforward and hardly requires any time if you decide to opt for a short term business loan. Yes, it’s as easy as placing your next food order – just at the click of a button.
You do not have to spend time on paperwork or scheduling meetings, just to get the capital for your small business. The application can be filled and submitted in as little as a few minutes, right within the comfort of your home. The quick process especially helps if your business has immediate expenses – you don’t have to wait for lengthy approvals!
You Can Get Short Term Loans Much Faster
With the surge in alternative lenders, getting a short term loan in India is no longer a hard task. The approval of loans happens in three days or so, with funds being deposited into a nominated bank account in a speedy manner. Say goodbye to days and days of waiting for your business loan to get approved! The entire loan application process, from application submission to the credit of funds to the borrower’s account, takes three days, subject to the applicant providing all the documents in one go along with the loan application form. Fortunately, this is especially helpful for a small business owner who does not have to wait too long to get the desired capital.
Short Term Business Loans are Flexible
Here’s another reason why you should go for short term business loans – after all, they can be customised to suit your individual needs. You can choose the repayment terms, varying interest rates as well as the repayment options. For instance, you can repay the short term business loans within a stipulated period (chosen by you). That is not all – the applicant can choose between 12, 18, and 24 months to repay the loan. Also, they have to pay EMIs every month. All in all, this flexibility is a boon for small business owners.
Short Term Business Loans are More Cost-Effective in the Long Run
There’s no denying that short term business loans are extremely helpful and fulfil your business needs without any hassle. Not just that, the quick repayment proves to be cost-effective in the long run. Even if a traditional long-term loan has a long repayment cycle, it can add up and make a high cost.
Short Term Business Loans Absorb the Impact of Seasonal Variations
Even if your business is small, you will still experience ups and downs, as well as seasonal fluctuations. They might be minor, but they could hamper your earnings. Eventually, this might lead to shutting down of your business, in case you have no other stream of cash flow. That’s when a short term business loan comes to use, especially in times of seasonal uncertainty.
Short Term Business Loans Help You Manage Capital.
You might be just starting out or plan to take things to another level, but you need capital to help your business grow. Most small business owners do not have ready money, which is where short term business loans come in handy. You can use it for multiple purposes, including the purchase of equipment, staff wages, inventory, marketing, and other daily expenses.
Short Term Business Loans Provide Security During an Emergency.
As mentioned above, one doesn’t really know when a stormy day might strike and slow down your business. There could be an unexpected business emergency that might leave you without funds and crash your business.
Since short term business loans take a few minutes to apply, they can provide you with a safety net when you need finances the most. After all, you don’t want your hard work going down the drain, isn’t it?
Short Term Business Loans are Easy to Qualify For
When you compare short term business loans to traditional ones, there is a significant advantage. What may you ask? These short term loans have an excellent track record of approval. If your business has a CIBIL score of 700+, you can get a short term business loan. It’s not as if the lender won’t check your personal and business credit scores, but the process won’t be too stringent.
Is a Short Term Business Loan Right for Me?
You must account for all your needs, and weigh the pros and cons, before going for a short term business loan. If your business has a quick stream of cash flow, a reliable method to repay debts, and an immediate need for capital – get a short term business loan today.
As Warren Buffet rightly said, Price is what you pay. Value is what you get!