Business

Short Term Loans

Short Term Loans

November 30
00:00 -0001

Short Term Loans

A short term loan is a form of financing that is attached with a quick repayment schedule—short-term loans may have a maturation period as short as 90 days. The fulfillment of the loan is dependent on the amount of financing; however, all short-term loans possess maturity dates that are significantly shorter than regular loans. 
The repayment schedule associated with the financing is the distinctive characteristic of short-term loans. Unlike regular loans, which commonly have repayment schedules of 30 years, a short-term loan must be repaid in a much shorter timespan (between 90 days and fifteen years) or immediately after the borrower achieves satisfies his initiative for securing the short-term loan. For example, when a business secures a loan to keep afloat while awaiting customer pay for a service, a lender would expect repayment as soon as the company receives pay from their clients or customers. In contrast, a short-term business loan delivered to a company for inventory shortfalls would be repaid as soon as the inventory is sold off. 
Benefits of Short-Term Loans:
Short-term loans are provided to businesses or individuals in need of quick financing—the funds are utilized to satisfy a payment, off-set a loss or to relieve a cash deficit problem. As a result, all initiatives tied to this loan schedule are used to alleviate shortcomings in the short-run; short-term loans are not used for long-term financing needs.  
The primary benefit of these loans is that they are immediately delivered, enabling the borrower to operate with increased liquidity. Moreover, because of their brief repayment schedules, short-term loans do not require serious commitment—the borrower is not indebted to the lender for a significant period of time.
Negatives Associated with Short-Term Loans:
Fast business loans are appropriate for both existing and new businesses. In regards to new businesses, banks or lending institutions will grant short-term business loans over regular loans because they are less risk—short-term loans provide less money at higher interest rates. Before short-term loans are granted, a lender will review the company’s cash-flow history and payment track record. Typically, short-term business loans are unsecured; they do not contain collateral and the bank relies solely on the borrower’s credit history and credit score.
The primary negative aspect associated with short-term loans is that this method of financing is more susceptible to default. This increased vulnerability results because of the loan’s conditions: short term loans have higher interest rates, shorter repayment dates and higher penalties if a default is realized. 
Information on How to Secure a Short-Term Loan:
Short-term business loans are dependent on your credit history and the repay capability of your business—these variables will affect the conditions (interest rate, repayment date and associated fees) attached to your short-term loan. 
Short-term business loans can stretch as far as 15 years; however, lenders are likely to giver shorter term loans to new or unproven businesses. Short-term loans are typically used to pay off the business’s emergency financial obligations.
Share

About Author

admin

admin

Related Articles

Business News

Google and IBM Discover Massive New Market Opportunity Mamadou Ndiaye grew up in the impoverished nation of Senegal.
Deep Fried: Burger King Twitter Hacked Deep Fried: Burger King Twitter Hacked Just two weeks after traces of horse meat were found in beef patties at a Burger King supply center in Europe, the fast-food chain’s Twitter was hacked.
Berkshire and 3G Capital Purchase Heinz for $23 Billion Berkshire and 3G Capital Purchase Heinz for $23 Billion Buffet, the CEO of Berkshire Hathaway, announced on Thursday that it plans to purchase the food giant for roughly $23 billion, adding Heinz Ketchup to the conglomerate’s stable of respected brands.
Martha Stewart Back in Court Again Martha Stewart Back in Court Again On Tuesday, the home decorating and banking icon appeared before the New York State Supreme court to defend her choice to sign a contract with J.
Young Adults are Too Broke for Loans Young Adults are Too Broke for Loans Young adults are facing less debt than they were 10 years ago, but that is not necessarily a good thing.
Lawsuit Alleges Budweiser Waters-down its Beer Lawsuit Alleges Budweiser Waters-down its Beer Beer drinkers across the United States have accused Anheuser-Busch of watering down its Michelob, Budweiser and other beer brands, in class-action suits that seek tens of millions in damages.
CNBC to Purchase “Nightly Business Report” CNBC to Purchase “Nightly Business Report” “Nightly Business Report,” the inventive public television series that has come into financial troubles in recent years, attracted a new deep-pocketed commercial owner, the 24-hour news and business cable channel CNBC, an element of Comcast’s NBC Universal.
Google Launches Touchscreen Chromebook Google Launches Touchscreen Chromebook Google on Thursday introduced a high-resolution Chrome OS portable computer equipped with a touchscreen.
Investigations Continue Into Plywood from China Investigations Continue Into Plywood from China On November 9, 2012, the International Trade Commission (USITC) announced that continuing investigations allege that hardwood plywood from China was subsidized and sold for less than fair value in the United States.
Department of Justice and Federal Trade Commission Sign Memorandum with Two Indian Authorities Department of Justice and Federal Trade Commission Sign Memorandum with Two Indian Authorities On September 27, 2012, the US Department of Justice and the Federal Trade Commission signed a memorandum of understanding with the Government of India Ministry of Corporate Affairs as well as the Competition Commission of India.
Another Taiwan Manufacturer Pleads Guilty to Price-Fixing Another Taiwan Manufacturer Pleads Guilty to Price-Fixing On September 25, 2012, the Department of Justice announced that the vice chairman of a Taiwan aftermarket auto lights manufacturer pled guilty to an international price-fixing conspiracy.
CME Group Software Engineer Guilty of Stealing Trade Secrets CME Group Software Engineer Guilty of Stealing Trade Secrets On September 19, 2012, the US Attorney’s Office in the Northern District of Illinois reported that Chunlai Yang pleaded guilty of two counts theft of trade secrets after working for CME Group for 11 years.
Economists Predict Meager Growth in 2011 Economists Predict Meager Growth in 2011 A number of businesses and financial analysts predict that the United States’ economy will grow only slightly in 2011, a bleaker forecast that was offered in July, when most entity’s called for a stronger improvement.
End of the Road for Steuben Crystal End of the Road for Steuben Crystal Steuben Glass, a name that once evoked images of prestige and sophistication, appears to be vanishing for good.

Guide To: Business Lawyers

Guide to Finding Business Lawyer Guide to Finding Business Lawyer How do I find a Business Lawyer?Business lawyers are essential for commercial enterprises to ensure that they remain knowledgeable of the laws regulating their business and protecting their assets from liability.
Guide to Finding Tax Lawyer Guide to Finding Tax Lawyer How do I find a Tax Lawyer?Tax lawyers specialize in helping clients who need guidance in navigating the complex tax codes of the United States and local state taxes.
Guide to Finding Bankruptcy Lawyer Guide to Finding Bankruptcy Lawyer Questions to ask, Fees, Preparing for appointment.