What happens when customers sometimes don't pay up when they should or when your business needs a quick uptick of cash.
Reasons to borrow money from a bank may vary depending on the business owner, but one thing most of them will agree with is that they'd rather consider using short-term business loans and business credit cards than commit to longer 5-10 year term loans. The reason: they don't want to go through a long application process or have collateral (a car or their home) tied to the business loan.
These valid financial alternatives enable business owners to get immediate access to money to fuel business growth and cash in on one-time opportunities.
These are two very different types of financing, so which one should you choose? You may have concerns similar to the following three entrepreneurs who contemplated whether getting a short-term business loan or a business credit card was the right move.
Because he is only a consultant, once his clients learn to put his marketing principles into practice, that cash flow stream will cease. He needs to seek for new clients continuously.
By adding staff members, he can leave the office and allocate time to meeting with new clients to expand his growing customer list. Furthermore, he also likes to regularly update his social media knowledge by taking some online courses. But all that takes money.
After comparing the benefits of short-term business loans and business credit cards, he decides to borrow $15,000 that he can pay off in 24 months. This money will help pay his new employee’s wages for a couple of months and also a couple of courses.
While there are some free articles for the general public, there’s a monthly subscription that gives payers access to another part of her blog. The paid section includes actionable tips for all stages of business growth and information on how to start a business, productivity, and management.
Her readership list includes thousands of individuals.
Lately, she’s having a hard time being a full-time blogger because she doesn’t seem to have enough time to write In order for her to carve out more time to write, she decides the best thing is to bring in more staff.
She knows that an accounting manager can take care of finances while an office assistant can send email blasts about upcoming articles and answer readers' questions. But she doesn’t have the capital to hire anyone.
She decides to start looking into business loans. Since her revenues exceed $30,000, she should qualify for the needed $20,000 short-term business loan. By extending repayment terms to 48 months, she has access to the money now but can comfortably repay the loan.
Now she has all the time she needs to pursue her passion.
Ever since he opened his computer repair shop, it has been a hit. He works non-stop to keep his customers' gadgets and machines in tip-top shape.
Newer ESD, hand tools, a digital multimeter, a loopback adapter, and a toner probe are his go-to implements, but these are expensive tools. God forbid one of them suddenly breaks. He knows he needs to be prepared for that eventuality. Having extra money to buy motherboards and hard drives would also help him be more productive and repair computers faster.
He decides to use a business credit card because it would allow him to make fast purchases online or at retail shops at any time.
Because customers pay before they pick up their computers, he knows he will have sufficient money to pay off the credit card balance before each due date.
All of these business owners knew it was the right time to borrow money. They each had specific goals they wanted to reach and felt that a boost of cash was the next, logical step. They researched loan options and decided whether a short-term business loan or a business credit card was the best financial solution. Then they moved forward confidently.
Alone in India, as per the report of Bloomberg, around 50% of total borrowings are invested in short-term loans.
How about you? Have you been thinking now is a good time to make your business dreams a reality?
Reasons to borrow money from a bank may vary depending on the business owner, but one thing most of them will agree with is that they'd rather consider using short-term business loans and business credit cards than commit to longer 5-10 year term loans. The reason: they don't want to go through a long application process or have collateral (a car or their home) tied to the business loan.
A Marketing Expert's Business Is At a Standstill
Jesus is a small business owner who recently opened his agency as a marketing consultant. He loves dedicating his time and expertise to building a strong social following for brands online. His business has a steady flow of regular clients, he helps them set up their online marketing departments and their social media strategies.Because he is only a consultant, once his clients learn to put his marketing principles into practice, that cash flow stream will cease. He needs to seek for new clients continuously.
By adding staff members, he can leave the office and allocate time to meeting with new clients to expand his growing customer list. Furthermore, he also likes to regularly update his social media knowledge by taking some online courses. But all that takes money.
After comparing the benefits of short-term business loans and business credit cards, he decides to borrow $15,000 that he can pay off in 24 months. This money will help pay his new employee’s wages for a couple of months and also a couple of courses.
A Blogger Struggles with Cash Flow
Writing is what Jenna does best, and when she decided to mix her love for words with her love for technology, she opened her own Fintech blog.While there are some free articles for the general public, there’s a monthly subscription that gives payers access to another part of her blog. The paid section includes actionable tips for all stages of business growth and information on how to start a business, productivity, and management.
Her readership list includes thousands of individuals.
Lately, she’s having a hard time being a full-time blogger because she doesn’t seem to have enough time to write In order for her to carve out more time to write, she decides the best thing is to bring in more staff.
She knows that an accounting manager can take care of finances while an office assistant can send email blasts about upcoming articles and answer readers' questions. But she doesn’t have the capital to hire anyone.
She decides to start looking into business loans. Since her revenues exceed $30,000, she should qualify for the needed $20,000 short-term business loan. By extending repayment terms to 48 months, she has access to the money now but can comfortably repay the loan.
Now she has all the time she needs to pursue her passion.
A Computer Repair Shop Owner Needs Equipment
Damien has cashed in on the fact that computers always stop working at the wrong time. People will always need having their PCs and laptops repaired, that’s a fact.Ever since he opened his computer repair shop, it has been a hit. He works non-stop to keep his customers' gadgets and machines in tip-top shape.
Newer ESD, hand tools, a digital multimeter, a loopback adapter, and a toner probe are his go-to implements, but these are expensive tools. God forbid one of them suddenly breaks. He knows he needs to be prepared for that eventuality. Having extra money to buy motherboards and hard drives would also help him be more productive and repair computers faster.
He decides to use a business credit card because it would allow him to make fast purchases online or at retail shops at any time.
Because customers pay before they pick up their computers, he knows he will have sufficient money to pay off the credit card balance before each due date.
All of these business owners knew it was the right time to borrow money. They each had specific goals they wanted to reach and felt that a boost of cash was the next, logical step. They researched loan options and decided whether a short-term business loan or a business credit card was the best financial solution. Then they moved forward confidently.
Alone in India, as per the report of Bloomberg, around 50% of total borrowings are invested in short-term loans.
Ashutosh Jha
Ashutosh Jha is a professional blogger, Blog and IT Consultant. He writes about Blogging, SEO, Making Money, Internet Marketing and Web Design.
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