Keeping the Business Afloat: Short-Term Loans for Small Businesses

The best way to earn a living is always through a business. This way, you will be your own boss. You make your own rules and you create your own terms. But it is also the most risky. Imagine using your own money for something you are not sure will have a return of investment. The bigger problem is if you have a capital to start your company. Good thing America is debt- or loan-friendly. There are different loans you could take out in order to start a business. For small businesses, it is better to take out a short-term loan. Typically, shorter loans have higher interests. But if you do it long term, you will actually end up paying more in interest. Wouldn’t you want to pay off the loan as soon as you can and then just concentrate on the business after? Short-term loans are also easier to apply for. The money can be available to you in as soon as 24 hours. This is important when the business is having financial problems. Loans are not just for starting businesses i.e. capital. You may also need it while the business is already operational. When you meet business-related financial problems, in most cases, these need to be addressed as soon as possible. This is when short-term loans come in. But where can you apply for short-term loans? Here are some tried-and-tested financing companies: Lending Club The company is known for giving out loans with low rates and high credit limits. You can borrow between $5,000 and $300,000. Although, if you want t a short-term loan, borrowing over $100,000 may not be advisable. That would mean a very steep monthly repayment terms. Depending on the amount, Lending Club’s annual percentage rate is between eight and 35 percent. If this sounds good, here is the catch: You need to have a good credit standing in order to be approved for a loan under this company. However, the company doesn’t have the fastest turnaround time because it is more meticulous than a lot of other financing companies out there. But the amount can be released in less than a week. OnDeck If you really are in a financial bind that needs to be solved ASAP, OnDeck has one of the fastest releasing time. The money could be available in 24 hours. But more often, it would take a few days to be released. But if you really need it, you can make arrangements. But unlike Lending Club, you don’t need a perfect credit record to apply for an OnDeck loan—just as long as you don’t have bad credit either. But because it is less strict on requirements, the annual percentage rate is high: between nine and 99 percent. The repayments are frequent, too: from daily to weekly within three months to three years. StreetShares Another financing company that could release funds within a day to a maximum of five days, StreetShares is great for businesses with low revenue. Its annual percentage rate is not as steep as OnDeck: between nine and 40 percent. But the loan amount is also lower—from $20,000 to $100,000, depending on how much your business’s annual revenue is. Kabbage If you have a bad credit, then there is still a chance to get a loan. It’s going to be difficult but be grateful there is Kabbage. But of course, there is a catch. The annual percentage rate ranges from 24 to 99 percent. It’s so high but for businesses that don’t have a good fiscal reputation, this may be the only choice. That advantage, though, is that there is a possibility that the amount will be released within minutes. Loan amount can be between $2,000 and $150,000. BlueVine Aside from businesses with bad credit, new businesses also have a hard time finding a good credit facility because of the lack of credit history. BlueVine has a minimum requirement of six months of operation in order to allow a business to apply for a loan. Annual percentage rate is between 16 and 62 percent for an amount between $5,000 and $100,000. But the amount can be released in 24 hours. Accion For businesses that have been operational for less than six months, there is Accion. It is a non-profit microlender for startup businesses that need short-term loans. You only need to show that while your business is young, it has sufficient cash flow. You also need to show that your business is making money, to ensure that you are capable of paying off the loan, which has an annual percentage rate of around 10.99 percent. Fundation This is another reputable financial company, which allows borrowers to just process their loans online within 10 minutes. The annual percentage rate is among the lowest: 7.99 percent as minimum to as high as 29.99 percent. But you have to be in business for at least two years to qualify with at least three employees. They also check that you have good credit standing in order to qualify for a loan. There are great reviews about this company. Clients have noted how friendly its customer service is and how knowledgeable the employees are. There are so many financial companies out there willing to give new businesses loans. But some of these companies are shady. This is why this list is created to help new businesses find the better options. It is bad enough that you are having financial problems in the business, finding the right lender should not stress you out as well. As a business hoping to get a loan, though, you should still be able to present a good case to the lender. Just because the lender is listed here, doesn’t mean they will be quick in releasing money to all businesses. You still need to present proof that you will be able to pay off the debt over a certain period of time. So as a business, no matter how small it is, you should have an organized recording and filing system—whether through hard copies or through online files.