Situations Where Short Term Loan Is The Right Financing For Your Business
Your business will always need external financing but how do you know which type of financing is right for you?
Here are three situations when borrowing on a short-term basis is more ideal:
Your retail business is deluged with UK shoppers on a Black Friday so you’ll need more sales staff. You’ll be paying more wages so you need financing.
You are operating on a low cash flow and you need to bridge finance bills that ought to be paid right away otherwise, you fail to avail of offered discounts. A bill from suppliers is one example.
Equipment has broken down and needs immediate repair. A short-term loan could help you address repairs or equipment rental while your own equipment is being serviced.
Choosing the best type of loan – whether short-term or long-term is critical because there are instances when you’ll need a longer repayment period as in the case of acquiring a building or a new business. On the other hand, bridge-financing the purchase of inventory may only require short-term borrowings.