Seven Reason for a Short-Term Business Loan

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Short term business loans are a special kind of loans made to small business owners to bridge a temporary gap in the cash flow. The terms for these loans can vary, depending upon your needs. For example, the term of the loan can be for 90 days or up to 15 months.

Some of these loans are unsecured, meaning the lender requires no collateral. Because the risk is higher for the lender, the interest rate on unsecured loans may be higher. Some loans do require collateral, in the form of inventory, accounts receivable, equipment, or other property. These secured loans generally have a lower rate of interest than unsecured loans.

Short term business loans can be a tremendous help if you are a small business owner facing a temporary cash-flow problem. Here are 7 situations in which a short-term business loan would be useful:

  1. Start-Up Costs

Short term business loans can be granted to both new and existing businesses. Therefore, a promising entrepreneur can finance the start-up costs of her business by obtaining a short-term loan. This is particularly helpful if you simply don’t have the cash to finance these costs yourself, and need a boost to get your business going.

  1. Accounts Receivables vs. Payable

Many businesses are cyclical in nature, and there is often a gap between accounts receivables (cash coming in) and accounts payable (cash going out). If you know this is a temporary situation and your receivables will be coming in quickly, a short-term loan will help you bridge the gap without falling behind on your bills.

  1. Extra Staff

A short-term business loan can cover any short-term operational costs you may have. For example, if you need to hire extra staff during a seasonal push, or a particular piece of equipment to finish a job, a short-term loan can finance your needs so you can get the job done.

  1. Emergency Repairs and Maintenance

A short-term loan can help you make it through an emergency situation. For example, if your computer crashes and you cannot run your business without it, a short-term loan can finance the repair.

  1. Cash Flow

Short-term loans have a briefer-than-usual maturation period than regular loans, which makes them ideal for any temporary cash flow situation. If you don’t have the money now, but you can depend upon money coming in within a certain period of time, a short-term loan would be a good way to fill the need.

Short-term business loans help in a crunch because they offer immediate approvals, meaning you can get cash quickly to help you through a crisis. However, they should be used with caution because they do generally come with a higher APR than other loans. Think of them as a valuable tool in your cache of small business strategies. If you feel your situation justifies a short-term loan, find a reputable lender and a loan officer you trust. They will help you determine the best loan for your business.

  1. Inventory

Inventory financing is when a business seeks funding to purchase salable goods for their business. Keeping the shelves stocked with the merchandise your customers want to buy is an important part of running a successful business. Under the right circumstances and with the right loan terms, financing inventory purchases can be a smart business move—and a good reason to get a small business loan. This is particularly true if you have an opportunity to buy that inventory at a discount.

  1. Expansion

Funding expansion to fuel a growth opportunity is the reason many business owners look for extra capital. While some business owners might have access to investors with the ability to provide capital when needed, many business owners choose to finance growth. When a business owner decides to pursue a business loan, it’s important to recognize that sometimes what seems like the right loan but at the wrong time can negatively impact a business—so it’s critical to evaluate your current situation to ensure a business expansion loan makes sense and that the timing is right.

Start Up Line of CreditShort Term LoansLong Term LoansBusiness Lines of Credit
BitX Funding start-up financing program connects entrepreneurs and business owners with $25,000 – $150,000+ in unsecured business lines of credit. This program can provide you with funding in as little as 10 days and is typically offered with 0% interest financing for the first 6-18 months.Designed to help meet short-term needs, such as unexpected events, or to take advantage of a great deal. Typically, most small business owners qualify.BitX Funding offers true long-term business loans with automatic monthly payments. If you are looking to Fund larger projects that pay back over a longer term with rates as low as 5.49% this option may be right for you?Business lines of credit allow you to draw funds whenever you need. Funds will be deposited directly into your bank account. Repay via automated weekly debits over six months. Your available balance replenishes as payments clear. Lines of credit can go as high as $100,000 with interest rates averaging around 13%.
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Let Us Help

BitX Funding is the online marketplace for small business owners looking to fund a project.

We specialize in connecting small business owners with lenders who will compete for your business. We believe small business owners drive the economy and we are passionate about helping your company reach its full potential.

You can reach a loan specialist by toll-free at 1-800-824-2407, or email at or applying online here and we can guide you on which loan is the best fit for your business.


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