Small businesses and startups often need loans to expand their businesses. But most of the time, they are not eligible to receive a line of credit from a bank. A short term loan is a valuable option in such cases so that you can meet the capital needs of your business. Individuals can also avail short term loans for temporary cash flow issues. The typical loan repayment term is around 12 months. Keep reading this to find more details about cheap short term loans.
Short term loan
Short term loans are renowned for their quick approvals. These interest rates for short term loans are between 5 and 10%. These interest rates are advantageous for most of the people as they have to repay the amount within a short and fixed time. Because the amounts available to the borrower are low, lenders do not take a long time to approve the loans and transfer the amounts. You can receive the payment to your bank account in less than 24 hours. Better yet, you don’t have to provide any collateral to get these loans.
Help for companies
Starting a business is easy, but sustaining it and taking it to new heights is not at all easy. Gone are the days when fewer people were interested in starting a business. It’s a different story today. Almost everyone is interested in starting a small business which creates fierce competition in the market. Achieving expansion and renovation goals is only possible if you make good profits. But a short-term loan can help you achieve many business goals. With a short-term loan, you can:
- Start a recruitment campaign.
- Invest money in advertising.
- Provide training for your staff.
- Take charge of business emergencies.
Provide a personal guarantee
As mentioned above, you don’t have to provide your business or personal assets to get a short term loan. This characteristic makes these loans fall under the category of “unsecured loans”. Unsecured loans are great for small businesses. But some lenders may ask you to provide a “personal guarantor” so that they can lend you a short-term loan. This collateral puts the lender at ease and ensures that you can repay the installments.
Getting loans with bad credit
Most of the time, people cannot find loans because they do not have an established credit history or a bad credit history. Credit history is the indicator for a financial institution that you can repay the loan. However, there are many factors that can lead to bad credit, preventing many businesses from obtaining loans. But you can find short term loans even if you don’t have a good credit history. Lenders don’t have to provide you with huge amounts of money, so they are happy to give you loans even if you have bad credit.
Simplified eligibility criteria
Financial institutions are not negligent and do not help people who lack credibility. The strict requirements make it difficult for individuals and businesses to obtain loans or even appropriate financial assistance. However, the best thing about short term loans is that you don’t have to show big ties. financial institutions or get yourself verified by agencies to get these loans. The basic eligibility criteria urge small business owners to get loans urgently.
Here are the eligibility requirements for obtaining short-term loans:
- You must be over 18 years old.
- Your business must be registered in the UK.
- You must have been a trader for more than six months.
- Your business should earn over £ 5,000 per month.
Most business owners comply with these eligibility requirements, so it is not difficult for them to get short term loans.
Limited paper work
Financial institutions are infamous for asking their customers to fill out huge forms. On the surface, they have to make sure that the person they are loaning the money to is legitimate and has the means to return it. However, in reality, credible people are the ones who end up going through difficult directives and must sign all commercial documents. Getting a loan is the best example of how difficult it is to get verification from multiple bureaus. But things are easier when it comes to short term loans. Lenders who provide do not fill out complete and detailed forms, which means that these loans are less about paperwork and more about convenience for clients.