RidgeCrest Financial Group

Whether you're aiming to increase cash flow, face an unscheduled expense, or capitalize on a new opportunity, a short term business loans may be the quickest money your business can acquire. Short-term loans are usually paid back in a few months to a year, perfect for temporary financing or bridging seasons. If you're asking how to get a loan without being buried in paperwork or turmoil, you are in the right place. Here is a simple, step-by-step guide to securing a short-term business loan and make smart financial choices for your business.

Knowing What a Short-Term Business Loan Is

We are in the same boat, so let’s define what we mean by a short-term business loan. Short term business loans are designed to provide businesses with quick access to cash, normally repaid within 3 to 18 months. Short-term loans are distinct from long-term financing, which provides sustainable capital for purchases of large equipment and property and can be paid off over an extended period. In contrast, a short-term loan is best used when demands in the business arise where immediate cash is needed; examples include covering payroll, purchasing inventory or stocking for peak season, or dealing with an unexpectedly high bill while you wait for a client to pay. Key Benefits Include:

Fast approval (at times within 24 hours)
Less paperwork than traditional lending
Potentially spend the funds confidently where you deem best

Assess Your Need and Your Business Readiness Start by assessing how much do you need and why? Do you have a clear understanding of what you want the loan for – the lender will want to know too. You Can Use a Business Loan Calculator to Project:

How much you can borrow
The amount payable monthly
Your total interest expense over the term

This will help figure out how much your business can afford to repay while still allowing your business to operate in a stable manner. Also, look at your:

Credit score (both personal and business)
Cash flow score or history
Current debts

Don’t worry too much if you don’t have perfect credit. Many lenders who specialize in providing short-term business loans tend to serve borrowers who have fair credit. These lenders tend to focus more on your revenue and cash flow.

Review Your List of Lenders

The business lending world has changed. You do not need to rely on large banks for business loans. You have been exposed to a growing marketplace of lenders: Online lenders - quick approval and less requirements Credit Unions or community banks - personal and often times lower rates Alternative lenders - flexible terms and can work with borrowers with credit troubles Each category of lender has different eligibility requirements. Be sure to review and compare lenders on the following;

Interest rates
Terms of repayment
Fees (ie, origination fee or prepayment penalties)

Collecting Your Documents

Although short - term business loans are often easier to request, you still have some paperwork to deal with. Usually, these includes:

Business bank statements (typically 3 - 6 months)
Proof of ownership
Tax Returns (either business or personal, depending on the lender)
Business licenses or registrations
Profit and Loss Statement

Having everything together will speed the approval process along and help you appear to be a competent and professional borrower to lenders.

Apply online or in person

A lot of lenders currently have online applications that are very simple and only take a few minutes to fill out. Typically, you will have to fill out some basic information about your business, upload documentation, and possibly link your business bank account for speedy verification. Pro Tip: Always double check your application. The last thing you want to do is hold up the application process due to inaccurate information. Lenders like to see accurate, honest information from businesses applying for a loan.

Final Thoughts

Obtaining a short-term business loan does not need to be stressful. You can confidently make financial decisions for your business with a little planning, and the right tools—a business loan calculator, and awareness of business lending! If you're ready to take that step, consider going with a trusted provider, like Sole Capital Group, with products that work for your business financing needs.