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.