types of loans / Unsecured Small Business Loans /
Short-Term Business Loan
Getting a short-term business loan can help you bridge gaps in working capital.
What is a short-term loan?
Whether you are in the startup phase, experiencing a slow business cycle or just need to ensure positive cash flow, access to working capital is a crucial component for business survival.
Short-term loans are designed to meet immediate financing needs, like bridging gaps in cash flow, dealing with unexpected needs for extra funding and taking advantage of new business opportunities.
Rather than pull funds from other parts of your business, a short-term loan can cover your costs while keeping your daily accounts payable intact.
Is a short-term loan right for my business?
Short-term loans can be extremely beneficial during a growth period, fluctuating cash flow times or when there is a need for seasonal purchasing. If you know that taking the loan will put you in a position to pay back the loan quickly, a short-term loan may be the solution.
Some instances where a short-term loan can benefit your businesses include:
- Accounts receivables vs. payables – Short-term loans can help cyclical businesses bridge cash flow gaps.
- Short-term operational costs – If you need to hire extra help during the holiday season or require a particular piece of equipment to cover a large job, a short-term loan can help get the job done.
- Cash flow – When you don't have funding now but can depend on the money coming in soon, a short-term loan can help you get over the hump and operate your business as usual.
- Emergency repairs – The unexpected occurs from time to time. Whether it's a computer crash or malfunctioning packaging equipment, you can get funds to cover your costs for when an emergency arises.
How can I get a short-term loan for my business?
Traditional lenders are more conservative in their lending practices, giving small business owners few places to turn for the working capital they need. Traditional lenders offer short-term loans as lines of credit with the option of paying interest only with principal payoff at a specified time in the future, from 90 days up to a year or more.
Other lenders like Kabbage Funding™ provide new ways to get the working capital you need to make sure you won't miss an important opportunity. With Kabbage Funding, you can draw from your line as often as you want, and you won't be charged any early payment fees if you pay off your loan quickly.