Most businesses experience slow times at some stage of their business life.In some seasonal industries certain products must be ordered and paid for many months before they are sold. A short term business loan can help even out cash flow when your accounts payable terms are less than your sales terms.
Short term business loans can run for as little as 90 to 180 days or as long as 1 year often depending on the purpose of the loan. Purchasing new machinery, investment in research and development and expanding operations are just a few uses for a short term business loan. Private Non Bank Business Lenders have grown in popularity especially since the big 4 banks have tightened their credit/lending policies which have shut out many sme clients/customers.
Private Funders allow business owners the opportunity to repay the loan without severely affecting the financial framework of the company as long as the business has a viable exit strategy and plan to repay the loan.The main difference between short term loans and long term finance is the timing of cashflows. Usually short term financial decisions are those that involve cash flows within the next 12 months and long term obligations are usually defined as longer than one year. A Business line of credit allows borrowers to pay off a balance and then re-borrow funds as required by the business.This differs from a short term loan where the borrower receives a lump sum of cash and can borrow more only after the short term loan has been repaid
