When is a Short Term Business Loan a Good Choice?

when is short term business loan a good choice
Are you an entrepreneur who has a great opportunity to invest in your business and increase revenue or overall productivity in that way?

Unfortunately, 99% of times, you need to invest a certain amount of money right away in order to seize that opportunity. The problem is that you don’t have the amount of money required.

Besides, you can’t afford to go through the hassle of a complicated process or a long waiting time to get the necessary funds. You have no time to lose. It would be a shame to miss that amazing business opportunity just because of the money!

Fortunately, you don’t have to. There is a way to get quick, immediate access to financial funds and take advantage of the opportunity that will bring your business to the next level. Short term business loans and business credit cards are always convenient options in such situations.

What are a short term business loan and business credit cards?

A short term business loan represents a lump sum of cash you receive and that you’ll need to pay off over time, the payments will include interest and other fees.

business credit scores
On the other hand, business credit cards are intended to be used by a business only when the need arises and have to be paid once they have the liquidity.

However, how to decide which one to choose?

Well, it depends on what fits your business needs. The best way to find the answer to this question is to go through some practical examples that give indicators of whether you should opt for short term business loans or business credit cards.

Let’s look at some examples

Online t-shirts, take advantage and buy in bulk

Sara Davidson started a small business selling customized t-shirts online. She came across an opportunity to buy a large number of t-shirts in bulk. By buying them at such a low price she could save hundreds of dollars and would make more profits.

buy bulk online
Unfortunately, the offer only lasts a few days. Her business is a small startup that still doesn’t generate more than $50,000 a year.

After closing a big deal with a school, she felt confident that she could pay back the borrowed money very soon.

Therefore, she decided to apply for a business credit card.

The Language School, bridge loan in the offseason

Annie Jones runs a medium language school that teaches students various languages. Her business generates around $100,000 annually and has been doing so for over three years.

However, during summer, Annie had a slow season, so she didn’t have enough funds to meet payrolls and other expenses.

She knows that the school year starts during September and that the new students that’d seek language classes would allow her to get back on her feet. But she needs a quick cash injection to raise her working capital and pay her dues.

So, Annie decided to get a short term business loan.

Sandwich Shop, buy new equipment to meet demand and increase capacity

sandwich shop owners
James Jackson has recently opened a sub sandwich shop. His business has been operating for about a year and he managed to generate income of $30,000.

After his initial success, James realized that if he invests in additional equipment he would improve work efficiency, which in turn would let him serve more clients and gain more profits.

Unfortunately, he didn’t have financial resources for that kind of investment, so he decided to apply for a short term business loan. With a high demand for his sandwiches, James was sure that he could return the borrowed money soon.

Final thoughts, invest capital to maximize your returns

Does any of these situations sound familiar? Are you experiencing similar challenges in your business? Do you need a fast cash injection to enhance your operations and increase your income?

If so, then you could definitely use a short term business loan or business credit card. However, to have a better idea of what option you should choose, contrast the pros and cons that each one brings to your particular business and needs. It’s always the best decision to get more information.

An informed decision is always the right one.

Photos courtesy of us.fotolia.com

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