If you’re looking for business funding, such as lines of credit, invoice financing, or general business loans, you may come across the terms “short-term finance” and “long-term finance”.
In this article, we’ll define, and explains the reason for getting short-term loans.
Short-term Financing Definition
Typically, installment loans extend fixed payments over several years, and borrowers might return early (sometimes for a fee). The long payback time means you’ll pay less per month, which can help you budget.
Short-term loans are generally due in a year or less, sometimes in weeks. Due to weaker credit standards, short-term loans often have higher interest rates and fees.
Reasons to Get Short-Term Loans
Most short-term loans are the last choice for borrowers who can’t get other loans.
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