Unexpected expenses can hit at the worst time. Whether you’re an individual or business owner, chances are there will be a time where you’ll find yourself in need of additional funds. Finding the right kind of loan option can feel overwhelming, and accruing additional debt isn’t something most people take lightly.
Fortunately, options are available and if you’re not wanting to obtain a large loan paid over an extensive amount of time, short-term loans may be a better fit for you and your goals.
What Are Short-Term Loans?
Typing in short term loans Mississippi, or wherever you’re located, will bring up a list of company’s that service short-term loans near you. These types of loans are typically used for a sudden expense for personal or business capital needs. Short-term loans offer funding with a fee that is expected to be paid in a shorter amount of time, such as, six months to a year.
This option can be essential to business owners, especially start-ups that may not be able to gain credit from traditional banks due to their relatively new business venture. Capital is needed to keep a business funded and when you’re first starting out, all the unexpected costs of running a business present themselves.
When it comes to individuals seeking out a short-term loan for personal needs, this option can be a less stressful one that offers a quick response and deposit in the bank. People shouldn’t be kept from obtaining things they need and with stipulations of a traditional loan being more extensive, an alternative route is required to get access to funds.
What Are the Types of Short-Term Loans?
These loans are offered mainly in several ways:
- Lines of Credit
- Merchant Cash Advance
- Payday Loans
- Invoice Financing
If you’re a business owner seeking a loan, the options you’ll be likely using will be the lines of credit, installment, or invoice financing. With lines of credit, businesses can access funds when needed like a credit card. Payback usually happens monthly with a fee. For installment loans, the funds are wired all at once after they are approved and payments begin on the terms agreed. Invoice financing utilizes a business’s accounts receivables to determine how much to lend. Amounts are paid off once the receivable is paid by the customer.
Personal loans typically use the payday, installment, or lines of credit option. With a payday loan, the individual can take out a loan that represents how much they earn. This loan will be expected to be paid back with a fee, by the following paycheck.
Having options for your business or personal needs is always a great thing to count on when an unexpected cost hits your way. If you’re unable to qualify for a traditional loan or looking for something more short-term that can be paid off quickly, then short-term loans could be a viable option for you.