Generally, substantial loan amounts are meant to be paid off in a long time, like 25 years. They also require plenty of formalities beforehand. But if you are on the lookout for instant cash support, you can opt for short-term loans to be paid off within 6 months to 1 year.
Based on your requirements, you will find multiple types of short term cash loans listed by financial organisations, money lenders, and banks. Usually, these loans have a high-interest rate and can be used by small business owners to maintain cash flow.
There are various types of short term loans available. Some of them are as follows:Instant Cash
Merchant Cash Advances
This type of short loan is well suited for small or medium sized business owners that allow their customers to pay via credit or debit card. Here, the lender provides a cash advance that actually works like a loan. The borrower then actually allows the lender to access their credit facility.
As a result, each time a customer swipes their card inside the business store, a small cut is paid to the lender. The process continues till the borrower has paid the principal and interest amount.
Lines of Credit
It is a short term cash loan category where banks or financial institutions allow the borrower to tap into a limit. Much like using a credit card, you can take the required amount for your business. Based on the borrowed funds, the amount per monthly cash payment may vary.
However, do note that you cannot withdraw the amount beyond the maximum limit imposed. Due to its advantages like in-built flexibility, most people prefer this type over its alternatives.
As the nomenclature suggests, this short term loan has a fixed payday. Usually, borrowers consider this option in the case of emergencies because of the easy availability. However, this loan comes with very high rates of interest. The principal amount is deducted out of your next month’s paycheck for repayment. As a result, the payday loan amount will depend on the amount of money you earn.
It is also known as a cash advance or a check advance loan. To reduce extortion, several laws have been implemented to regulate high fees related to such cash loans.
Are you a business owner waiting for your customers to clear the pending dues? In that case, you can opt to take short term cash loans for the same. All you need to do is collect the invoices and present them to the respective lender.
Here, your company can quickly attain cash without casting any risk to the assets. Additionally, this loan method is sufficient to provide you with a much-needed boost in credit card sales.
Also termed swing loans or interim financing, bridge loans allow you to get instant cash to meet the necessary obligations.
This loan type is often used in the real estate industry when the borrower needs cash between purchasing and selling the house.
If you are a small business owner, you have undoubtedly been in a position where you need instant cash. However, you cannot apply for a conventional loan due to time constraints.
In such cases, short term cash loans come to the rescue. Most banks or finance lenders these days provide you with an option to borrow money with a paying limit of 6 to 12 months. In some instances, this limit can also be extended to 18 months.