Short-term business loans have become more and more popular compared to their traditional 5-10 year term loan cousins, but many small business owners might still be feeling unsure of what they need to qualify. There are plenty of reasons why short-term loans are attractive to small business owners, like the fact that shorter loans could provide more future flexibility—as borrowers won’t be tied down with ongoing loan payments for the next 5 or even 10 years.
The caveat is that, while they have shorter terms and might offer more flexibility, short-term loans are substantially pricier than their medium-term cousins, and often come with daily or weekly instead of monthly payments.
So what specifically do lenders look for when you apply for a short-term loan? Let’s take a closer look at the qualifications you’ll probably need to meet in order to secure a short-term loan—along with some of the most common potential deal breakers.
Short-term loans can be a versatile option for your short-term financing needs, ranging from upgrading your technology and equipment to taking advantage of new business opportunities. Here are some of the loan qualifiers you should be aware of:
Just as there are positive qualifications that could help a borrower quickly secure short-term financing—high credit score, high bank balances, and so on—there are also plenty of negative attributes that would sink most applications.
There are many great benefits to short-term lending. But the qualifications—and the potential deal breakers—aren’t always so crystal clear. By reviewing the information outlined above, small business owners can apply for their next short-term loan with confidence.