What You Need to Know About Short Term Business Loans?

Posted by Anuj Pandey | Posted on May 19, 2018

Short term business loans can come to the rescue of your company’s financial issues and manage inventory restocking or equipment purchase. Moreover, you can also use these types of funds as an investment for business expansion.

With least difficulties and processing time, you can get these loans quickly owing to their rapid disbursal time. However, banks might make the process a bit complicated for which NBFCs can be a better option.

Which NBFC to choose?

Choose only the renowned institutions that provide short term loans for businesses with several added features.

Features of a short-term loan for businesses:

Short term loans can come with the following features that can provide immense benefits for your business –

1. No collateral requirement

With no collaterals to put up, these loans eliminate the stress you get when pledging a business or personal asset to the lender.

So, what do they need?

These unsecured business loans only need you to match few criteria as laid forward by the financial institution.

2. Quick approval and disbursal

If you have a critical or emergency situation at hand that needs an immediate investment of funds, then short term business loans can prove to be a saviour.

Note: With short and quick disbursal time, your loan will get approved in almost 24 hours.

3. Minimum documentation

With minimum documentation, the overall process becomes simpler and faster, and adds more convenience to customers like you.

4. Large financing options

The large financing options of these short-term loans give you more opportunity to use them in various ways.

How much can I get?

Financial institutions provide up to Rs.30 Lakh to businesses, enough to invest in the betterment of your company.

Eligibility criteria required to apply for a short term loans:

To apply for a short-term loan for your business, you need to fulfil the following criterion –
— Your company should be at least 3 years old (vintage).
— Your company should have filed income tax returns in the last year.
— You need to have your last year turnover audited by a CA.
— You should be between the ages of 22 and 55 years.

Why should you take short term business loans?

You can utilise a short-term loan in multiple ways for your business. Some of these include:

A. Hiring human resources

Hiring more workforce for your business becomes the first step in your company expansion. The recruitment process can call for minor investment, and a loan can fulfil precisely the same.

B. Seed capital

Looking to launch a new start-up?

You will require seed capital, and that’s where a short-term loan comes in. With sound objectives and motives, your start-up can receive the financial push it needs.

C. Opening new branches and offices

Your well-established SME or MSME requires growth and expansion and setting up new branches and offices at other locations fall under this expansion process. However, for that, you need a quick and small investment for which a short-term loan can come to your help.

D. Emergency maintenance and repairs

When your critical plant and machinery comes to a standstill due to some unforeseen circumstances, you will require funds to repair them. Not only that, a permanent fault in them can call for the purchase of new equipment.

What can you do here?

To tackle these situations, a short-term loan can help you with the emergency cash that you need.

E. Maintaining cash flow

One of the superior benefits of short-term loans – enabling the continuation of cash flow! Well known financial institutions like Bajaj Finserv also offer pre approved loans to customers having a respectable CIBIL score. When faced with a temporary cash flow shortage, these loans can keep the funds flowing and make sure your business continues to run.

Now that you have learned all about short term business loans, apply for one today and see your company grow immensely.

About the author

Anuj Pandey is an experienced financial advisor and writer who is well known for his ability to market trends as well as for his financial knowledge. He has worked extensively in the finance sector and also written numerous blogs on finance and startup etc. and how they affect the customer in the present market scenario. He has done MBA in finance. Anuj has also amassed a great name for himself as a financial blogger. Read more