Given the state of the economy, a number of companies in all industries are experiencing significant lulls. These struggles are commonly associated with decreased consumer spending; however, problems in business can seemingly arise through any variable.
To quell financial struggles and to relieve the problem of a cash deficit, short term loans are made available by a number of financial lending institutions. Fast business loans–which typically have maturation periods of as little as 90-120 days and as long as one to three years–are helpful at evening a company’s cash flow, for those businesses where the accounts payable schedule is shorter than the sales cycle.
Typically, fast business loans are met with very specific repayment plans. For example, in a case where a business is taking out a loan to even out the cash flow until the customers have paid the business, a lender would expect repayment as soon as the company receives their money. In contrast, a short-term business loan for a company with inventory purposes would be repaid as soon as the inventory is sold off.
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 risky and are for less money. Before fast business 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.