Whatever stage of development that your business is at, it’s important to consider your funding requirements. Funding can be used for a whole range of sources – everything from covering short-term cash shortages, to investing in research and development, or fuelling the continued growth and expansion of your business.
One of the funding options that you may wish to consider is a short-term loan. Short-term loans provide you with a specific amount of cash, which is required to be paid back within a certain period. Fees and interest will be payable on the amount that you’ve borrowed.
Short term loans will generally be for relatively short periods of time, and generally for lower amounts of finance.
One of the key benefits of a short-term loan is that they are generally easier to obtain than a longer-term loan for a larger amount. Short-term loans may also be available from non-traditional lenders, not just larger financial institutions.
Beyond cash-flow, there’s a number of reasons you may decide that a short-term loan is right for your business:
Seasonal trends: If your business has peaks and troughs in demand, then a short-term loan can help smooth out some of the financial pressures that this creates.
Expansion: If you’re expanding into a new market, growing your sales team, or increasing production, then a short-term loan can help you cover the up-front costs incurred.
Emergencies: No matter how thoroughly you’ve planned the operations of your business, there’s always unforeseen emergencies that are difficult to prepare for.
The down-side of short-term loans is that they’re generally more expensive than other types of finance. When you’re considering your funding requirements, it’s important to seek independent advice.