Short term loans can be the saving grace for your business, especially in a time of need. They can make a project you can’t fund possible, or help you pay your bills when you know money is on the way but won’t be there in time.
Have you ever wondered how to get a short term loan? Well, it’s the same way you get any other loan! You make a plan, apply, and wait for your acceptance or denial. The only major difference is the time frame to secure these loans doesn’t take nearly as long as other loans. With a well throughout plan, you can snag a short term loan almost instantly if you play your cards right.
How do you use a short term loan? To answer that, we put together a few examples of how you can use a short term loan to save your business in a time of need.
Let’s take a look at how a short term loan can save your business and drive progress.
Fund a Project
Having that major contract in the window can be the saving grace for any business, but what if you can’t afford to fund the project on you own? Well, if you don’t find a way, you will lose the contract.
This is where a short term loan can come in handy. If you know you will be able to get a loan to cover the materials needed to complete the job, you can pay it back in the short timeframe given with the profits. It’s a great way to make sure you can secure the profit potential of a job if you can’t front the cost of materials on your budget.
Pay Employees
Maybe you had the money to fund the project, but project ran a bit longer than expected. In the end, you won’t be able to pay your employees because the profit from the job won’t clear your account in time.
This is another great time to secure a short term loan to supplement your employee pay. You know you will have the money to pay it all back, just not in time for payday. A short term loan will be your best bet to make sure your people can get what they are owed, so they can pay their bills.
Cover Your Bills
Speaking of bills, a short term loan can really help you pay yours too. Say you are in the same situation as before, but you have the money to pay your employees. The only problem is, once your employees are paid, you won’t be able to cover your bills until your money from the job clears your bank account.
Don’t let your bills go up due to late fees. Get a short term loan to cover your bills, and pay it back when your money clears your account.
Tools for Tasks
Have you ever been in the middle of a job and realized you needed another tool to get it done? So you look for what you need, and the numbers are a bit more than you bargained for. It’s not exactly a tool that Johnny down the road will have either, so what can you do? Well, you can get a short term loan to snag your necessary tools, and pay it back when your job is complete with the profits from the job.
This is best for tools you know you can use again and will use again. Large items like car lifts are expensive upfront, but they will ultimately pay for themselves as time goes by.
Conclusion
Short term loans can come in handy when they are used properly, but you need to be careful. Due to the nature of these loans, they tend to have higher lending percentages, and can quickly become too much to handle if they aren’t paid back right away. If you don’t have a plan to pay them back right away, you might want to look into other financing options that won’t have you falling down the rabbit hole called debt.
These loans are easier to get on short notice, but you will have to pay them back on just as short of a notice. If you do get one of these short term loans, make sure you budget them accordingly.
If you aren’t careful, a simple short term loan can quickly sink your profits and could even close your doors due to the high interest rates.
Have you ever used a short term loan? What did you use your short term loan to accomplish? How did you budget the debt to pay it back? Share your stories in the comments below.
