Title: Short-Term Loans - Loans - LAWS.com
Headings: Short-Term Loans
Short-Term Loans
Benefits of Short-Term Loans:
Negatives Associated with Short-Term Loans:
Information on How to Secure a Short-Term Loan:
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Content: Unlike regular loans, which commonly have repayment schedules of 30 years, a short-term loan must be repaid in a much shorter timespan (between 90 days and fifteen years) or immediately after the borrower achieves satisfies his initiative for securing the short-term loan. For example, when a business secures a loan to keep afloat while awaiting customer pay for a service, a lender would expect repayment as soon as the company receives pay from their clients or customers. In contrast, a short-term business loan delivered to a company for inventory shortfalls would be repaid as soon as the inventory is sold off. Benefits of Short-Term Loans: Short-term loans are provided to businesses or individuals in need of quick financing—the funds are utilized to satisfy a payment, off-set a loss or to relieve a cash deficit problem. As a result, all initiatives tied to this loan schedule are used to alleviate shortcomings in the short-run; short-term loans are not used for long-term financing needs. The primary benefit of these loans is that they are immediately delivered, enabling the borrower to operate with increased liquidity. Moreover, because of their brief repayment schedules, short-term loans do not require serious commitment—the borrower is not indebted to the lender for a significant period of time. Negatives Associated with Short-Term Loans: