subject: Short Term Business Loans: Suitable source of finance for business needs [print this page] Short Term Business Loans: Suitable source of finance for business needs
Business is based on the money completely and it is obvious. You are making big mistake, if you think that business can be run easily without much finance. Usually, most of the entrepreneurs like to borrow money from banks and lenders to tackle business properly. Before obtaining money from financial institutions, it is mandatory to consider almost every important point. In United Kingdom, there are various types of financial products and services available. Choosing a correct product according to the requirement is very important. Many times, people get confused as well due to availability of numerous services. Whenever you search for better financial service, please keep in mind that you should borrow cash for minimum time period. Short term business loans can help you a lot in such circumstances. These loans are also known as small business loans and are easily available with all lenders and financial institutions in UK financial market.
With long term loans, you pay small monthly payment for long period of time. As a result, business owners pay huge amount at the end of the day to lender. In short term business loans, lenders provide cash for the period of 6 months-5 years. Hence, individual can start a debt free life shortly and you have to pay very minimum interest rate. As far as usage is concerned, entrepreneur can use the cash for any purpose, like buying machinery, tools, equipments, new technology, land, office, etc. This financial service can be divided into two categories, secured and unsecured loans.
Secured loan Here, consumers can avail bigger loan amount in the range of 10000-250000 for the period of 1-5 years. This option provides cheap interest rate and APR because needy person has to place collateral against the funds. It is a risky option for borrowers.
Unsecured loan It is an ideal option for those entrepreneurs who are living as tenant or do not want to pledge collateral against the money. However, you get slightly high interest rate here with small loan amount in the range of 5000-75000 for the period of 6 months-2 years.
Short term business loans are approved on the basis of borrower's monthly income and repayment capability.
