How to Qualify for a Short-Term Business Loan
Being one of the fastest ways to get working capital, there are only three key things to keep in mind when applying:
1. Time in business
Your business should have been operational for at least 3-6 months. How long you've been in business is a risk assessment signal for lenders. The longer the duration, the lower the risk for lenders to provide you financing.
2. Average monthly revenue
Most lending companies require your business to generate at least $10K a month to qualify for short-term loans. Your current revenue numbers help lenders calculate the maximum loan amount your business qualifies for.
3. Credit rating
You can secure a term loan with both good or bad credit. Your credit score is one of the factors that determines your interest rate. The higher your credit score, the better APR you will receive. We recommend borrowers have a score of at least 550.
Popular Short-term Business Loan Uses
Choose how you allocate business funds, whatever your needs. Below are common ways business owners use traditional loans to achieve their goals.
Emergencies:
Unplanned costs come up all the time. With the budget set and capital tied up elsewhere, you might not have the cash on hand to pay for an unanticipated expense. Financing can be used to cover urgent expenses when you’re in a bind.
Fixed Costs:
Some business owners choose to allocate funds towards everyday costs. Working capital can help you cover essential expenses, like rent and payroll.
Cyclic Dips:
During a season slump, cash flow can turn negative, straining the business. A short-term loan can provide the capital you need to comfortably make it through your slowest months.
COVID-19 Assistance:
During the pandemic, businesses across the nation have faced financial hardships related to the novel coronavirus. If revenue has declined, or expenses have risen during COVID-19, we’re here to help.
Equipment Financing:
Machinery and equipment allow you to get the job done. Term loans can be used to purchase the resources you need, when you need them.
Gaps in Cash Flow:
An infusion of working capital can be used to bridge short-term cash flow gips, ensuring your bills get paid on time and in full. Whether you’re waiting on invoices to be paid, or have a pressing need, we have you covered.
