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.
Sure, a short-term loan sounds great – but, with so many variations of short-term business funding, how do you know where to begin? Never fear, let’s dive into the process now and clear up any concerns.
When Should You Consider a Short-Term Loan?
Before choosing to apply for a short-term business loan, you must first decide what the loan will be used for. By establishing the purpose of your loan, you will then be able to determine how much you need to borrow and whether short terms or long terms will work better for you in the long-run.
If shorter terms sound more appealing, it’s probably ideal for you to opt for a short-term loan as this option will ultimately reduce the cost of paying back your loan.
How Does Short-Term Business Lending Work?
Short-term business finance works in much the same way that traditional 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. Unlike the hidden fees often associated with loans, the factor rates of our cash advances are clearly explained in the funding agreement, this way 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
- The overall health of the business
At Fast Capital 360, we take a look at the bigger picture before determining the best possible rate for you given your financial history.
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:
- Quick access to funds
- Limited paperwork required in the process
- No constraints on what the money is used for in the business
- Debt only lasts for the duration of the funding term
- Internal approval rating of 89%
- At least six months in business or six months of ownership
- A minimum operating revenue of $120,000
- Up-to-date bank statements and financial records
- A personal credit score of 520 or higher
Where the major financial institutions tend to reject merchants with less than perfect credit scores and lending histories, we make a concerted attempt to provide short-term loans for every type of business owner.
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.
There are multiple reasons for a business owner to choose a short-term loan. The most common reasons include:
- Emergency repairs and unforeseen expenses – When money for repairs is needed quickly, a short-term loan gets a business back to operating normally without paying for the money they need over an extended period of time.
- Accounts receivable – Businesses that operate on accounts can use short-term loans to bridge the gap between expenses and full payments coming in.
- Cash flow – When a business needs cash to execute a planned part of a business plan, they need the capital to do so. A short-term cash flow loan provides them with the ability to get over the hump and then repay quickly.
- Operational costs – when businesses need extra staffing during the busy season or need to purchase a specific piece of equipment for a job, a short-term loan can ensure that they afford the pieces to do the job right.
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|
Regardless of how long a business has been operating or where, virtually everyone runs into at least one of the above problems. When they do, the big banks often don’t do enough to get a business through their more difficult financial scenarios. That’s where we do things differently.
Unlike loans, our small businesses funding is built to provide you with the right amount of cash flow as quickly as possible. You shouldn’t be forced to wait around for months just to receive a funding decision. Afterall, you have a business to manage.
In 2008, the country experienced its worst economic downturn in more than a generation. Seeing the small business economy dry up and thousands go out of business, we were determined to create a company that could support multiple industries in a way that made sense to them. When we were founded in 2009, we set out to create a funding model that was more accessible to businesses of all sizes and types.
Today, Fast Capital 360 funds thousands of companies across the country looking for loans, both small and large. Since our inception, we’ve funded more than a quarter billion to businesses in the U.S., and we’re just getting started.
We understand that the decision to take out a short-term loan is a big one. Our business advisors are here to discuss every option available to you and to lend their knowledge of the industry without ever pressuring you to make a decision.
From seasonal business loans to unforeseen expenses, short-term business funding makes the difference for companies everywhere. Our programs are here to ensure that you keep things running as smoothly as possible.
As a business owner, it’s your job to make hundreds of decisions a day; we make short-term business funding an easy one.