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Different Types of Short-Term Emergency Loans

A short-term emergency loan can help your small business to keep on kicking as you manage any existing issues causing the cash flow to be affected and fall short. Maybe there is a delay in shipping the products needed on your shelves or materials needed for production, or you’ve lost a big account or underestimated expenses, or perhaps you under-budgeted for an upcoming project. Whatever your reasons and instances are, such loans are intended to offer short-term help and must be repaid on time. Here are some ways you can get short-term emergency loans

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Loans for small business management 

 The SBA is the United States that organizes short-term emergency loans for competent business owners. The agency has several offices all over the U.S that covers recovery, investment, and even disaster loans to businesses that are qualified. If you’re looking for an SBA office near you, feel free to visit the SBA website. A counselor will be reviewing and assessing the situation your business has and provide a recommendation regarding the options that can help and match what you’re experiencing now the most.  

Banks for small businesses 

Go to a financial institution that keeps your business accounts and inquire regarding the business loans you can get for short-term emergency purposes. Usually, banks can offer the traditional short-term business loan you require or provide you a business line of credit or signature loan. Inquire to other banks to make sure that you’ll be having the greatest terms and rates as much as possible.  

Own line of credit 

Small businesses, especially a mere partnership or proprietorship, can secure an emergency business loan good for the short-term by getting the owner to represent on a personal line of credit. Another way for this method is for small business owners to utilize a business or even personal credit cards, especially when they have low-interest rates and high credit limits.  You just make sure to utilize credit once you’re self-assured that you can repay the amount of money you’ve borrowed within a limited time.  

Friends and family 

For short-term loans, a lot of owners of small businesses turn to their friends and family first instead of directly reaching a financial provider. Usually, family and friends can provide flexible repayment terms and lower interest rates. When you need to extend your payment date for you to totally repay the money your borrowed, there’s a possibility that your personal relationships can be affected. To prevent this, you must establish a formal written agreement that entails all your terms and condition about your loan. 

Resources you must avoid 

You should stop the urge of borrowing money from companies that cash paycheck, which charges really high-interest rates. As much as possible refrain from withdrawing money from your personal retirement or home equity accounts. If you do such irresponsible acts, it can possibly place your business and personal finances at extreme risk in the future when everything goes the wrong way. Make sure to be wise in every decision you make as you apply for any type of loan.