Short Term Business Loan | Different types | How to avail?

Short Term Business Loans- For Growth of Business

Short-Term Business Loan:

As the name suggests, short-term business loans are unsecured loans that can be utilized in emergency scenarios in the business. These are funds availed or borrowed for short-term period from the banks or lending institutions. They are helpful in sorting the temporary cash crunches of the business. Usually the tenure of such loans is for a period of a few months to up to one or two years. Nowadays, one can avail Business Loan in India under various schemes by Government.

Growth with Short-Term Business Loan:

The short-term business loan helps the borrower in growing and developing the business and taking it to new heights of success. One can always avail these loans for the following purposes-

  1. In case of emergency of funding needs like increase in demand, machinery breakdowns, etc.
  2. For bridging the gap between the financial crunch that is temporary and the regular cash flow in the business.
  3. To hire new recruits and professionals.
  4. For starting a new line of business.
  5. For managing any gaps in the working capital, that can actually used purchases and stock inventories.
  6. For expanding the business and opening a new branch.
  7. For increasing the client base.

Types of Short-Term Business Loan:

There are different types of Short-term business loan that one can avail as per their needs and requirements-

  1. Flexi business loan- In this type of loan the borrower is being provided with a pool of funds from which they can borrow money number of times. The interest is charged only on the amount utilized by the borrower. It is of great help if a small business wants to stabilize its cash flow or wants to meet the short-term needs of the business.
  2. Credit card loan- This type of short-term business loan can be availed against the limit that can be utilized through credit card. The period of the loan tenure in this type of loan are very concise and short, anywhere from 2 to 6 months.
  3. Loan against securities- This loan is provided against the pledged security by the borrower to the lender. One can avail it without liquidating the assets of the company and on/ against mutual funds, company stocks, bonds, etc.
  4. Overdraft- Sometimes bank lets a person avail amount from the account in spite of less funds in the borrower’s bank account. This is called the overdraft facility.
  5. Machinery and Equipment loan- If there is a sudden fault in the working equipment or breakdown of machinery, this type of loan can help in upgrading or replacing it with the new one.

Availing Short-Term Business Loan:

A person can avail a short-term loan for the business from various banking and non-banking lending institutions. The applicant is liable to problems faced while availing Business Loan in India. They can get unsecured loans of up to Rs. 30 Lakhs with attractive interest rates and easy monthly EMI payment scheme and options. There are various schemes provided by banks and government that provides short-term business loan to the applicants.

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    Author: Anil Agrawal
    EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or anil@ezybizindia.in.