Short Term Loan An Overview of Short Term Loans
Author: Grant Olsen
Date posted: 02.08.21

With no collateral required, no restrictions on the use of funds and a lightning-fast turnaround, unsecured short term loans are among the most flexible and popular products. These loans go up to $1 million, generally take 1-2 days to fund and have term lengths ranging from 6 months to 3 years.

Short Term Loan

Business growth is one of the most common key considerations for any business owner. Obtaining a short-term loan can prove helpful in those growth efforts. Typically, businesses have two main options when it comes to funding – secured loans and unsecured loans.

 

 

What is an unsecured short-term business loan?

Just as the name sounds, an unsecured business loan is a type of loan granted without requiring collateral. Instead, the lender focuses on other factors such as creditworthiness and cash flow of the small business to determine if they qualify.

Unlike secured loans that can have strict qualifying metrics, unsecured short-term business loans are much easier to get qualified for and have a much faster turnaround time – Days instead of months. With the increased development of Internet technologies, businesses can get an unsecured loan from online lenders in a few hours.

Benefits of short term loans

 

  • A simple and quick application and funding process –Typically only a completed application and a few months business bank statements are needed to apply. Approvals can be issued within hours and in many cases, funding can occur within one day.
  • No collateral required. This greatly speeds up the process and also eliminated the risk of losing that collateral in the event of a potential default.
  • Flexible credit score requirements. The minimum credit score needed for an unsecured short term loan is typically just 500 or higher. 
  • Allows flexibility on use of funds. With the traditional secured loans, banks often put in place tough measures controlling how the business can use the funds it receives. In most cases, the bank will need you to give a detailed proposal of how you intend to utilize these funds before approval. With an unsecured loan, there are no restrictions on the use of funds. You have total control over what to do, whether it is to hire new staff gets more operational space, among others.

Wrap up

If financing is needed quickly and an easy application process is desired, an unsecured short term loan could be a great option for your business.

About The Author | Grant Olsen

Grant is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV and has been featured on FitSmallBusiness.com and ModernHealthcare.com. Grant has a B.A. in English from Brigham Young University.

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