Everything You Ever Wanted to Know About Short-term Business Loans

All businesses need cash on hand. But not every business should go about acquiring that cash in the same way.

To grow your business over the long term, there are often short-term opportunities that you will need to take advantage of. To seize those moments, you need to ensure you have easy access to funds.

Depending on your needs and circumstances, you will likely want to pursue one of two options to get the money you need to make those investments: a business credit card or a short-term business loan.

But how do you know which one is right for your business? Here’s why a short-term business loan might be right for you.

Simple and easy to understand

Unlike many long-term loans, short-term business loans are easier to arrange and come with less cumbersome paperwork. Most of the time, you can apply for the loans online without ever meeting with a lender in person.

Let’s say you’re a retailer. You own a camping store, and you need an influx of inventory at the beginning of the spring camping rush. Since your store is a few years old, you’ve been through this season before and know how much inventory you need.

You can sign up for a short-term business loan for the precise amount of money you need, and you can establish terms and conditions that are friendly to your circumstances. Before you get the money, you will know the interest rate on the loan and the timeframe you have to pay it off.

Quick money and a lot of growth

Because the short-term business loans are simple to apply for, you can usually acquire them pretty quickly. That’s why these types of funds are perfect for businesses who need money for a single purchase in a narrow time frame.

Let’s say you own a restaurant and you need a new industrial-sized refrigerator. Perhaps you know of another restaurant that’s looking to quickly sell their lightly used refrigerator and upgrade to a bigger one. It’s the perfect opportunity for your business, one you don’t want to miss out on. Unfortunately, you don’t have the cash, and you know if you don’t act fast, some other restaurant is going to scoop it up.

In that case, a short-term business loan is perfect. You can get the money you need as soon as you need it. Because the forms are short and simple, and the application process is extremely user-friendly, you can usually get the loan money within a matter of days.

Opt for a credit card when there’s less certainty

Short-term business loans are great when you know exactly what you need and when you need it. But sometimes, the amount of cash you need can fluctuate each month. When your business expenses are more unpredictable, a credit card can be a great option.

If you own consulting business, odds are that you or your employees have to travel a lot for work. Oftentimes, you might need to schedule last-minute business trips to meet with clients.

In these situations, a credit card gives you the flexibility you need to react and adjust to situations as they arise. You can easily put these kinds of expenses on the credit card without having to fill out paperwork and wait to receive the funds. Having an accessible line of credit is essential for handling unexpected situations or even emergencies.

Do you know what option is right for your business?

Only you can answer that question. But if your business might have a specific need for quick cash or if you encounter seasonal flows where you know you will need more merchandise and inventory, chances are the situation might be right you to acquire a short-term business loan.

Even if you don’t need a loan right now, it makes sense to start doing your research today. The more prepared you are to get a short-term business loan, the better you’ll be able to handle the situation when you need one.


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