Short-Term Business Loan – Meaning, Interest Rate, Pros And Cons

In the dynamic world of business, financial flexibility is often the key to success. Short term business loans have emerged as a valuable tool for entrepreneurs seeking swift access to funds to meet immediate needs. Whether it's bridging cash flow gaps, capitalizing on time-sensitive opportunities, or effectively managing unforeseen expenses, short term small business loans provide a temporary infusion of financial resources. Read ahead to know more about short-term loans and their features.

Understanding Short-Term Business Loans

Short-term small business loans are financial instruments designed to provide businesses with quick and temporary access to capital. Unlike long-term loans that are repaid over several years, short-term business loans are typically paid back within a shorter period, often ranging from a few months to a year. These loans cater to immediate financial needs, making them an attractive option for businesses facing cash flow challenges or seeking growth opportunities.

Tenure Of Short-Term Business Loans

The tenure of short-term business finance varies depending on the type of loan and the lender's terms. With SMFG India Credit, you can get a repayment period ranging from 12 to 48 months.

Interest Rates For Short-Term Business Loans

Interest rates for short-term business loans can vary based on factors such as the borrower's eligibility criteria, creditworthiness, the loan amount, the lender’s policies at the time of application, and so on. Generally, short-term financing options tend to have higher interest rates compared to long-term loans due to their shorter repayment tenure. Lenders perceive short-term small business loans as riskier, given the compressed time frame for repayment.
It's essential to carefully review and compare interest rates from various lenders before committing to short-term business loans. While the interest may be higher, the advantage lies in the quick availability of funds, which can potentially outweigh the cost.

Depending upon your financial profile, SMFG India Credit provides short-term business finance at affordable and competitive interest rates to help you fund your short term funding needs without any hassle.

Benefits Of Short-Term Business Loans

1. Speedy Access To Funds

When time is of the essence, short-term loans are most useful. They offer rapid approval and funding with minimal documentation, allowing businesses to seize opportunities or address urgent needs without delay. SMFG India Credit provides instant* short-term loans in as little as 72 hours* after loan approval.

2. Minimal Documentation

Short-term small business loans require minimal documentation as compared to long-term loans. This facilitates an easy and fast loan process. SMFG India Credit understands that every moment spent on paperwork is a moment away from focusing on your business. With our small business loan, you'll appreciate the advantage of reduced documentation requirements.

3. Collateral-Free Short-Term Business Loan

Accessibility is key for small business owners, and short-term small business loans offer just that. SMFG India Credit provides collateral-free business loans up to INR 75 lakhs*, meaning you won't need to put up collateral, allowing you to safeguard your assets while still gaining access to the necessary funds. 

4. Easy Application Process

Many business owners also consider short-term business loans from online lenders because the application process doesn’t require too much time. SMFG India Credit allows the convenience of a 100% online and paperless application process, which further improves the ease and feasibility of the loan process.

5. Relaxed Eligibility Requirements

Short-term business loans have relatively relaxed eligibility requirements as compared to secured long-term loans. SMFG India Credit has simple eligibility requirements for its short-term business loan, i.e., the age limit is 21 to 65 years and the borrower’s minimum turnover should be INR 10 lakhs in the last 12 months. To understand the additional requirements, please check out our eligibility criteria page.

Conclusion

Short-term business loans provide quick and flexible financial help for immediate challenges, making them a crucial tool for businesses in need.

To help you fulfil your immediate financial needs, we at SMFG India Credit provide short-term business loans. We offer 100% online and paperless application on business loans ranging from INR 50,000 to INR 75,00,000* ensuring that you have required funds to tackle your immediate financial challenges. With flexible tenures spanning from 12 to 48 months, we offer convenient repayment options that suit your preferences. Check your EMI according to the loan amount required through our online calculator and apply for our short term business loans today.