Benefits of Short Term Commercial Loans

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Benefits of Short Term Commercial Loans

Short term Texas Commercial Loans can help a business grow to the next level or get through some cash-tight times. Find out how to evaluate your business’s needs and learn about the expectations you’ll be required to meet before the loan application is approved.

Mandy Newall Arizona Home Loan SpecalistsWhen a company is in need of cash fast, a short term Commercial Loans may be the way to go. In contrast to a conventional five- or ten-year term bank loan, short terms are typically offered with a repayment structure of between three to thirty six months. Usually these loans have higher approval rates than long term loans, and can be paid in smaller daily or weekly payments versus a monthly lump sum. Ensure you can manage the daily or weekly payments prior to agreeing on the terms of this loan.

Short term Texas Commercial Loans can benefit businesses by getting cash in their hands quickly. For new businesses, getting approved for this type of loan can prove helpful down the line when the company may need to expand to applying for a more traditional and larger loan with longer terms. Showing a bank that you were able to pay off a short term shows good faith.

For new businesses or ones that need to establish business credit, short terms also are easier to get approved for and once the business credit history is well established, that is another indicator that traditional banks look for when reviewing a long-term loan application. Typically, short term lenders do not require a credit score minimum, as traditional banks would for a conventional long term loan.

Short term loans can get approved quickly, so you can get your cash quickly.

Once the application process has been completed and approved, businesses can receive their cash advance in as little as 24 hours. This is one of the best benefits of these loans — cash fast.

Yes, short terms have many benefits but they do have some disadvantages, too.

Short term Texas Commercial Loans are very beneficial in many ways, however, it’s important to understand the disadvantages, too. Typically the annual percentage rate of these loans is much higher than the APR of a conventional long term loan because the amount of time the borrower has to pay back the loan amount is much shorter. The estimated APR can be factored by taking the finance charge plus the interest rate and converting it into the APR. Lender fees associated with short terms are also something to take into consideration. The shorter the term, the higher the APR — so it’s a good idea to try to negotiate a longer term of three years versus a shorter three- or six-month repayment schedule.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
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About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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