Short-term business loans are an alternative to a traditional bank term loan, with its five- to ten-year commitment. Short-term loans are tailored to help you fund your business’s growth right now without encumbering you for the future. Short-term business loans could be set up for as few as three months–or as many as 24. And because they are business loans and not merchant cash advances, you build your business’ credit history as you repay them. That can be important in the future when you are ready for a larger or longer infusion of capital.
You should also keep in mind that, unlike a traditional bank loan that must be repaid through a fixed amount every month, a short-term business loan can be repaid through small amounts that are automatically deducted from your sales every day. You don’t need to take even a minute away from your customers.
Additionally, short-term loans can help businesses pay upcoming taxes so they don’t run into issues with the IRS. By taking out short-term loans, companies can avoid running up their credit cards while waiting for the next revenue stream.
In general, most lenders will consider your credit score, time in business, and possible collateral to determine whether or not the small business owner will be able to get the loan.