Short Term Business Loans: A Brief Guide

Today is the day of entrepreneurship. With neck-clinching job opportunities and rising competition, it’s always good to go ahead with starting your business. But, having an idea would not help in setting up a business. You would need money to run the operational cost of the same. Even hosting a franchise of some bigger commodity chain lets you be your boss; let’s face it, people nowadays wish not to be bossed around.

But a business needs a large capital. This is where short term business loans come to play. And, this works for not just for a new start-up, or a new franchise. Banks and NBFCs now provide business loans which have proven to be extremely helpful for those who are willing to start their own business. The expansion of a business could be in many forms; sometimes, it is in the form of increasing production if it is a manufacturing business or any business that involves production. It could be an expansion in the form of opening a new branch or increasing the variety of items to be dealt in. Regardless of the form, any expansion of business means the involvement of a large amount of capital.

Short Term Business Loans

Why would you need a short-term business loan?

There can be several reasons as to why you would need business loan, some of the uses of this loan amount include:

1. Managing operational cost
2. Miscellaneous expenses
3. Purchase of equipment
4. Business expansion

In such cases, they should go for short term business loans. A business owner might also be looking for short term business loans to strengthen the working capital, or to cover operational costs.

Types of the short-term business loan offered in Australia:

• Common types of short-term business loans are:
• Unsecured Business Loans
• The business line of credit
• Invoice Financing

Short Term Business Loans

What, and why short-term business loans?

Here are a few need to know facts about short term business loans:

• Short term business loans are loans you can avail with minimum documentation; and most importantly, swift access to funds.
• Most short-term business loans can be availed within a handsome amount so that you can use this amount for different purposes.
• With most of such loan providers, you can customize the credit criteria, so that they perfectly fit your business. This adds to the ease of utilization and returns in later times.
• Unlike traditional loan institutions, most short-term business loan providers do not charge any prepayment charges. With these institutions, you, therefore, do not have to worry about foreclosure of your loan agreements. However, this condition may vary with different providers, hence its always advisable to consult with the bank and compare the charges and interest rates before applying for a loan.
• Most short-term loan providers set a tenure ranging between 1 to3 years. Like that, business owners can choose a tenure that best suits their needs.
• Short term business loan is very quick. Their processing takes lesser time and hence it’s a good choice to go ahead with this type of loan.
•  As touched upon earlier, short term business loans follow a very simple application procedure; that demands minimal paperwork. Nowadays, most such loans can be applied for, and availed, while in the comforts of your office. What you need is a good internet connection. 
• Most short-term loans are collateral-free loans. Unlike traditional loan institutions, you do not have to mortgage your business, or parts of it, to get the loan approved.
• Eligibility criteria for short term business loans are minimal. Even though different agencies have different terms and conditions, they all keep it to the minimum.

Conclusion- All the above-mentioned factors would have given you the right picture of short term business loans. However, it is always advisable that you must first compare the rates offered by different banks and then take a call on the same.