short term business loans

Why Would Anyone Need Short-Term Business Loans? What’s the Point?

Businesses need capital to operate. Too many manufacturers have orders in, but a lack of funding to simply purchase material and get on with production. Businesses can be in the ideal position to expand, but not permitted to do so because of monthly flow limitations. Personnel may need to be paid, but payments may take a while to arrive.

All manufacturers, traders, and distributors have short term financial needs that vary on a day to day level. Without immediate funds, opportunities can be lost. Operations can be at a stand still and fail to produce. The valuable time spent establishing a business is wasted if not financed to function in its day-to-day requirements. There is a day-to-day cost of business that can completely halt or collapse a business if not met.

What are Short Term Loans?

Short term loans are perfect for immediate money crunch problems. They cover any immediate business expenditures like expansion, covering basic operational costs, meeting monthly capital requirement, and so on. They are unsecured loans to meet all your short-term needs.

Short term business loans are:

  • Easy to avail
  • Offer lightning quick approval that gets you money within days
  • Perfect for those who failed to secure long-term loans
  • Require no collateral
  • Is completely digitized and processable online within a few clicks
  • Offers upto INR 1 Crore
  • Is hassle-free
  • Is tailored to the repayment needs of the business
Every small business owner is different, as is every small business. The purpose of short term finance is to meet your business’s needs to make loans and repayment convenient for you.

Short-term loans versus long-term loans

What are the differences between short-term loans and long-term loans?
  1. Long term loans are always multi-year proceedings with complex requirements and stipulations.
  2. Short-term loans usually have a tenure of a single year with capital being dispersed within days.
  3. Small to medium sized businesses don’t require long term funding, but rather a more convenient alternative means of funding to manage their equipment leasing and daily needs.
  4. With short term business loans bad credit isn’t a problem as with longer term loans.
  5. Long term loans lack the flexibility term finance offers. They are simply too large and too complex with burdens that can significantly cog down a simple, small business.
  6. There is a popular misconception that short term finance borrowers have higher interest rates than long term loans. In lots of cases, the built up interest over several years in long term loans is often significant and overlooked.

Short Term Business Loan Rates

They might appear to be higher, but the short tenure plays a large part in how much interest is actually paid back. Short term business loan interest rates are competitive owing to the large number of lenders available. Long term loans are older loan options and are much more heavily regulated by the government. These regulations can lead to complexities that are too big and cumbersome for small and medium enterprises. These stipulations lead to higher barrier of entry for long term loans. Short term loans are much more accessible to the bulk of businesses. Long term loans have payments dispersed over many months. Short term loan repayments are much more frequent. They can instill a sense of discipline and routine for small business owners with their frequent payments. While many traditional businesses have their needs met with long term loans, business has evolved as well. The new age of business is rapid-fire, incredibly competitive with a need for funds that is fast and furious. Internet-based businesses have high speed demands that have upped the speed of markets. Everything is online and digitized. Short term business loan India brings borrowers and lenders online. Short term term financing has adapted to modern times and offers the same rapid-fire processing and immediate availability for businesses in faster, more competitive markets than ever before.

Am I Eligible for Short Term Loans?

Short term loans have very simple, transparent, and easy terms to qualify for:
  • Has your business been operational for a period of 1 year? If so, yes.
  • Do you have a business registration certificate? If so, yes.
  • Has your business had an annual turnover of INR 24,00,000? If so, yes.
  • Has your business returns been filed for the previous year? If so, yes.
  • Has your business’s past year turnover been audited by a chartered accountant? If so, yes.

What Documents Do I Need?

  • Income tax returns for previous 1-2 years
  • Audit reports for previous 1-2 years, including associate companies
  • Debtor and creditor list with transaction details
  • Previous 12 months bank statements
  • Certificate of incorporation
  • Aadhar card
  • Equipment and machinery invoices

Conclusion:

  • The need for short-term loans grows more massive day by day. The one-size-fits-all model of long term loans always ensures that there are people in the market for loans more suited for their uniqueness.
  • Short term loans meets that critical gap.
  • Many short-term business loans are made with convenience and speed in mind for the new digitized age. They are an alternative to traditional bank loans, and are more competitive in nature than old finance models.
  • They factor in the needs of small  and medium-sized enterprises and are always a good option to have when long-term financing fails.
  • As the speed and intensity of our markets ramps up, so do our needs for daily functioning.
  • The whole process is online with minimal hassle.
  • The entire vetting process is extremely short, with most people receiving their loans within days.
  • Have your business assessed and see if you can avail a short term loan so that you get the much-needed funding your company requires today. Get a short term loan today!

Short Term Business Loans FAQs:

1. Does term financing have prepayment charges?

There is no penalty for paying off your loan earlier than stipulated time period with short term loans.

2. What are the hidden charges not mentioned up front?

There are absolutely no hidden charges

3. Can short term loans be used towards purchasing equipment and machinery?

Yes, they can.

4. Should I try availing a short term business loan?

It is common for new business owners to wonder what their loan can or can't cover. If you cannot wait for alternative financing, give short term business loans a shot. You might be surprised.