Short-Term Business Funding: There When You Need It
Every business owner has had at least a few instances where they needed money fast. Whether they needed a seasonal business loan or were in dire need of quick repairs, it’s a natural part of running a business.
Short-term business funding is the process of receiving capital quickly, using that cash flow as needed and then paying it back in small installments over the course of a four or six-month term. These small, short-term business loans are often a huge difference maker during an important time, bridging the gap between almost possible and in your grasp.
In recent years, the need for quick working capital has grown exponentially; small business owners need to stay competitive, and sometimes a short-term loan is the best way.
How Does Short-Term Business Lending Work?
Short-term business finance works in much the same way that other loans do. Once you’re approved, you receive a set amount of cash then pay it back with the included funder’s fees over the course of several months.
Repayment structures involve a daily, weekly or monthly scheduled payment. The factor rate of the business loan is clearly explained in the lending agreement, so you know exactly how much you’re paying and when you’ll be making payments.
Oftentimes, short-term business funding programs have daily payments. The daily structure is a lesser burden than monthly payments, allowing businesses to budget more easily and feel more confident in their payment schedule.
The factor rate for short-term business funding is based on a number of factors, the most predominant elements of which are business revenue, short-term business history, long-term business history and the overall health of a given business. The table below is one example of how capital may be paid back if the factor rate of the fast business funding was 1.14.
|Funding amount to be paid back||$114,000|
|Due date||12 months|
|Number of payment days in a month||21|
|Number of payments||252|
Why Choose Short-Term Capital?
The disadvantage to short-term business loans is that they tend to have a higher factor rate than other forms of funding. In many cases, however, the benefits of short-term finance outweigh the higher interest rate.
Many business owners choose short-term business funding because of:
Our online business financing service is unsecured, so you never have to pledge collateral just to receive your loan. With Fast Capital 360’s short-term business funding, cash can arrive in as little as one business day.
As a business owner, it’s your job to make hundreds of decisions a day; we make short-term business funding an easy one.