Where commercial business loans are concerned, there are quite a number of options that one can explore. The terms and interest rates that are charged on these loans vary from one lender to the next. The short-term commercial loan will work very well for any person who is looking to fund a small project but there are also the long-term loans that can be used for much bigger projects and issues.
Typically the short term loan will come with a term of between one and five years. The long term loan son the other hand come with a much longer term of more than five years. Generally, the amount of money given for short term loans is much less compared to that given for long term loans. A large number of businessmen actually consider the short term loan to be an expense as opposed to being a form of financing. This is because of the impact that it usually has on the balance sheet and the income statement.
At this point you might be asking which one would work best for you. The choice that you make should depend on the purpose for which you intend to use the loan. In the event that you are looking to take care of a small project that can be completed within a short time period such as doing repairs here and there or buying certain equipment, it would be good for you to take the short term loan. Larger projects such as the replacement of equipment, expansion of business or a large scale repair job would typically require long term loans.
One p[point to note though is that the interest rates that are charged on the short-term commercial loan are normally much higher compared to those that are charged on the long term loan. This is mostly due to the fact that the short term loan requires to be paid back in a shorter time period. While looking to get this loan, ensure that you walk around and talk to various lenders before settling on a particular one. Make careful comparisons of the terms that you are being given and the interest rates that you are being charged.
After all is said and done, it is important that you take a loan that will match your needs at the specific time. You do not want to take a long term loan to purchase a machine with a short shelf life. You will find yourself still paying for the machine long after the shelf life of the machine is over.
Sometimes as an investor you may come across a property that requires quite a huge amount of money to purchase it but because of limited resources you forfeit that opportunity. What many investors especially the beginners are not aware of is that there are several financial institutions which provide short term hard money loans within a very short period of time. such kind of loans are usually preferable to huge investors such as real estate companies that often buy land and other property that they come across. The term hard is used simply because it is somehow hard to pay back.
These loans are normally provided by individuals or other small groups based on either your credit score or your collateral. The good thing is that you may have a low credit score but still qualify for the loan since what they usually look at is the size of your assets. If you are an investor and you are looking forward to increase your financing sources then these types of loans are best for you. However you should be aware of the risk involve before you get into it.
There are several pros and cons of short term hard money loans. Below are some of the advantages and disadvantages.
More options for collateral
The good thing about hard money lenders is that they accept many types of collateral unlike other financial institutions. You can even use your anticipated cash flow from the asset you want to buy or even your home as collateral. They can also lend you up to sentry five percent of the value of the property you want to buy. And just in case things don’t go your way and you are unable to meet the LTV ration then you are allowed to use assets such as your retirement benefits, house etc. as collateral.
These loans are very easy to get and most experienced investors use such loans to finance renovations and repairs since they can quickly close the transaction and then establish separate accounts with the financial institutions in order to pay for the renovations and repairs.
Higher risk and cost
One disadvantage of short term hard money loans is that they attract high interest rates and lenders always demand upfront fee. You also stand to lose your property used as collateral just in case things don’t work out.
In summary, short term hard money loans are a quick way of getting finances especially for the big investors such as real estate companies. However, it is important to understand the risk involved before applying for the loan.
WHAT TO KNOW ABOUT SHORT TERM COMMERCIAL LOANS
Short term commercial loans are given, upon application by financial institutions to both small and blue chip corporate entities to finance its short term operations like expenditures. Also where there is an emergency on financial or a crisis that needs money as soon as possible to sort out the issue. These short term loans come in hand because they become a great solution in terms of finance to those corporate or organization who are faced with hindrances of covering expenses which emerge to be of urgency. Traditionally, debt financing only occurred with loans that would take a period of 5 years or more to be able to repay it back. However with these emergencies, the short term commercial loans have made it easier for business entities to finance their operations.
Short term commercial loans have strict terms before a financial lending institution approves your loan request. In some cases the lender request to look at the company’s books to ascertain it credit worthiness before granting the loan request. The time limits for short term loans are strict and may range from a few months to one year. The borrower stipulates what the intended purpose for requesting the loan and when it is likely to be financed with the specified interest rate.
Many reputable lending institutions provide these loans by physically going to the banking premises or by doing it online where one has a busy schedule upon filling the requisite forms. Advisably, it is important to visit the bank and talk to the guys at the credit section to find out the packages they have, the interest rate chargeable and the repayment period that works with the period that you are able to service the loan.
It is advisable for one who intends to seek a loan to know and fully understand the pros and cons of short term commercial loans before proceeding to apply because one big disadvantage of applying these loans is that they are much more expensive by reducing profit margins due to the high interest rates than long term commercial loans and if one is not careful enough they will end up worsening their financial situation and even will put one in the bad side of the lenders because maybe the borrower might have delayed paying up all the money plus interest as agreed hence defaulter as rarely do loan lenders desire to work with culprits of defaulting and even one can be put out of business.
A long hard look and examination of the economic trends today, every person particularly business people need debt finance. Virtually all business entities including the small underfunded shopping store near your home needs or has once used debt finance in one way of the other. This finance is also available for personal use. US Funding Solutions has a product that we all need, short term commercial loans, for both mammoth million dollar companies to small proprietorships worth tens of thousands of dollars.
Short term loans offered by US Funding Solutions are usually payable in a short period of time, mostly in less than three years. In these three years, you will be required to make monthly, weekly or quarterly payments. US Funding Solutions usually engages with all their clients to ensure that the installments to be paid are not oppressive of their clients. In fact, US Funding Solutions offers one of the cheapest lending rates that you can find in United States.
The policy behind the low lending rates is informed by the fact that every borrower needs friendly commercial terms that will allow them acquire finance without much struggle. US Funding Solutions will be your big partner who ensures that you do not lose your money to unnecessarily high and oppressive lending rates.
Why Should You Obtain a Short Term Commercial Loan?
Short Commercial loans are very crucial for a business entity or person for 2 main reasons:
- Capital. Every Dick, Harry, Juliet and Lorna knows quite well that if one lacks capital, even with the most brilliant and promising idea, they are doomed to not reach and end up realizing their ideas. However, US Funding Solutions offer Short Term Commercial Loans and consequently help you realize your ambition and escape the pain of being poor. The cash obtained from the US Funding Solutions facility will assist you and your company has enough cash to carry out the day to day activities that you do.
- On need basis funding. Businesses have their ups and downs. Sometimes, the company may be making hundreds of thousands but others, the business could be making losses. There are other instances where opportunities come up yet the funds available are not sufficient. In these instances, US Funding Solutions provides Short Term Commercial Loans to help you out. That facility will avail the funds that you need to take advantage of that opportunity and even make more.