UNSECURED SHORT-TERM LOANS
Unsecured Short-Term Loans are by far the most widely used type of business financing available today. These loans fund within 12-48 hours and almost any business can qualify for one of these types of loans. Unsecured Short-Term Loans are no longer strictly for people who are in a tight spot financially; many companies are now using them for a host of reasons, such as speed, leverage, ease of qualifications, cheap cost of money and direct pay.
These loans require the least amount of time to be spent by the busy business owner, the least amount of paperwork and effort and can fund very quickly. Many savvy, cost of money-conscious business owners are using these loans to ultimately protect their margins because short-term loans are going to be dollar for dollar the lowest cost capital available.
Did you know that the average consumer pays over 100% in total interest paid over the life of their 30-year mortgage? Alternatively, what about a 10% APR based loan for ten years, that is a total of 58% percent in total interest paid over the life of the loan on an amortized loan. An 18-month short term unsecured loan would cost a business, pennies on the dollar when compared to the more traditional APR based long-term loans.
These loans should not be used to catch up on bills or pay off old debt unless the business is expecting revenue to increase shortly (like when the slow season will be over soon) because of the short-term nature of the repayment can eat into a businesses’ cash flow. However, if these funds are being used for anything that will increase revenue such as inventory, expansion, new employees, equipment or any other business need that will improve profitability, they are a perfect way be able to move nimbly and protect your margins due to the low cost of capital.
While almost any business can qualify for short-term unsecured loans, the businesses’ health plays a part in the overall term and cost of money. Find out what your business qualifies for today with a free consultation.