For Short Term Needs: Short Term Business Loans

Author: Amanda Thompson

Money is required for a business both in long term as well as short term basis. Most of time, borrowers avail business loans to meet their long term monetary needs. But if anyone requires money for a short period of time, then what will they do? In that case, they also can avail business loans, as short term business loans are also available in the loan market.

As the name refers, short term business loans are available for a short period of time. These loans are repayable within 90-120 days, but depending on the situation, this period can be extended up to three years.

Borrowers can avail short term business loans both for new as well as existing business. Generally, it is seen that some banks, lending companies or financial institutions etc exclusively provide short term business loans only.

However, short term loans are available both in a secured as well as in an unsecured form. To avail the secured option, borrowers have to pledge a security against the lending amount. As a security, borrowers can use any valuable object including home, other real estate, automobile and so on. Oppositely unsecured option is available without any security. Therefore, if you are a non-homeowner or do not want to use your property against the lending amount, you can meet you short term capital needs with short term business loans.

While applying for short term business loans, borrowers need to submit the following documents:

Borrowers need to submit their business profiles, where their business types, period and annual turn over should be mentioned properly.

If borrowers want to avail short term finance to start up their own ventures, a blueprint of their business plan should be enclosed with their application form. It will justify their repayment capacity.

Obviously, while applying for short term business loans, borrowers should mention clearly the loan type, purpose and amount.

And moreover, borrowers have to submit their personal financial history including details about tax returns.

Now, it comes to the interest rate of short term business loans. Since, these loans are available for a short period of time; hence the interest rate of these loans is a bit higher. But to make the interest rate pocket friendly, borrowers can follow some methods:

If borrowers opt for the secured option, it will enable them to get the amount at a better interest rate.

Borrowers can avail the unsecured option with better terms and conditions as well. In that case, a bit searching is necessitated.

Besides, having a good credit score enables borrowers to negotiate with lenders in order to make the interest rate flexible.

Source: http://www.articlealley.com