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Spotcap's short term loans – main features
A short term loan can help your business cover unexpected expenses. The main features are:
Access to finance will help your business to:
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With our short term lending approach, you only ever pay interest on what you draw-down. Get a loan estimate using our payment calculator:
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Understanding Short Term Business Loans
What you need to know as a business owner
What is a short term business loan?
- Short term business loans are designed to be repaid over a relatively short period of time. The purpose of a short term loan is to meet a company’s immediate financial needs. These may include making seasonal payments, bridging gaps in cash flow or purchasing equipment. In contrast to long term loans, short term loans can often be generated more quickly and easily.
- Short-term business loans may or may not be tied to an asset. A lender might ask for your home or other assets as security before issuing this form of finance, or they might ask for a personal guarantee.
- Part of the essence of a short term loan is the relative speed in which it can be processed. As a result, these types of loans are versatile, suiting fast-moving commercial environments.
Why is access to short term credit important for small businesses?
- Limited access to short term finance is one of the biggest challenges and most restrictive factors a small business will face, especially during seasonal fluctuations, high-growth periods and temporary downfalls in demand. Many SMEs turn to short term loans to bridge gaps in funding and keep business running smoothly. However, obtaining a credit facility from a traditional lender can be challenging. Fortunately, the advent of alternative finance has diversified the financial options available to SMEs.
- A short term loan is a good option for businesses that need fast access to finance to grow and manage expenses. This type of loan is designed to provide you with the working capital you need to meet immediate business needs. For example, to make hires, ease your cash flow, purchase equipment or machinery, or cover emergency costs. Short term loans can help small businesses manage unforeseen costs or take business opportunities they would otherwise miss.
Small and medium sized businesses and short term loans: A historical problem
- As core drivers of innovation and employment, small businesses are central to macroeconomic health. A significant number of SMEs would use short term finance to grow if it was available to them, but they often struggle to obtain it from traditional lenders. Quick access to finance has long been a problem for Australian small businesses that have survived turbulent economic and market conditions.
- Application processes have become more rigorous, with increased financial regulation and stricter business performance indicators. Traditional financial methods make it difficult to quickly acquire loans when businesses need them. At the moment, securing funding with traditional financial channels can take as long as two months, and to apply you often need five years of financial documents – not to mention many hours of meetings and signings just to complete the application.
- Small and mid-sized businesses will struggle with these processes. Fortunately, there are now other available options. Technological innovation has created an opportunity get ahead with smarter and cheaper ways to implement common business practices.