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5 Situations in Which to Consider a Short Term Loan for Your Business

  • By Admin
  • 01 Sep, 2017
There are all kinds of reasons to take out short term loans for personal purposes, but in some cases, you may want to consider a short term loan for your business. Wondering if a short term loan is the right business move? Here are several situations where it makes solid financial sense.

1. Paying for Startup Expenses

Have you always dreamed of starting your own business? Do you just need a few supplies to get started? Then, you may want to take out a short term loan to cover your startup costs. As your business is new, you will have to rely on your personal credit to get the loan. However, that infusion of cash may be just what you need to follow your dreams.

2. Accessing Discounts on Inventory

If you run an e-commerce site or a brick-and-mortar store, you need to keep your virtual or real shelves full of inventory, or you won't make any money. Of course, if you buy the inventory at a discount, you stand to make even more in the long run.
Unfortunately, if you don't have the funds that you need, you won't be able to take advantage of the discount. In cases like this, a short-term loan provides you with the ability to save money.
That's not the only type of discount you may take advantage of with a short term loan. If there's a sale on equipment, marketing, or anything else you need for your business, a short term loan can help you make those purchases. To decide if the loan is financially savvy, just make sure that the amount you are saving is more than the interest rate on the loan.

3. Covering Seasonal Gaps in Cash Flow

Running a business is challenging, and in some cases, you may not have enough cash on hand to cover various expenses. A short term loan can be an effective way to take care of gaps in your cash flow. However, you need to be careful about using a loan to cover everyday expenses.
If you expect your revenues to increase soon, a short term loan makes sense. For instance, let's say you own a seasonal business such as an ice cream truck. You don't make any money in the winter so you can't afford to buy gas or other supplies at the beginning of summer.
However, you know that if you take out a loan you will be able to repay it easily when the summer time revenue starts pouring in. In situations like that, you may want to turn to a short term loan.

4. Handling Payroll

Your employees are one of the biggest assets you have. If you get to payday and you don't have the funds to pay them, you should definitely consider a short term loan. Again, as indicated above, you should have a plan in place related to how you are going to repay the loan, but a loan helps to ensure that you don't write a bad check to your employees.
Additionally, if you don't have the funds you need to cover payroll taxes, you may want to take out a short term loan for that as well. The penalty for not paying payroll taxes can be huge. In fact, the IRS can assess a penalty that is equal to the amount of unpaid taxes. That is basically a 100% penalty. If you get a short term loan with a lower interest rate than that, you are coming out ahead.

5. Avoiding Long Term Debt

In other cases, you may just prefer the format of a short term loan. If you need funds for your business but you don't want to be locked to payments over a long time period, a short term loan makes sense.
If you're ready to apply for a short term cash loan or find out more information, contact us today. At Central Finance, we do our best to approve your loan application.
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When discounted shopping deals come out around November and December, many people use the deals and savings to shop for the holidays, but there are numerous ways to turn the deals into savings that can be spread out all throughout the year.

If you do not have enough money saved up for holiday shopping, then consider a small loan to help cover purchases. With some proper planning and tips, you can save even more money than the loan amount covers. Learn how to take advantage of the deals and get the most out of your holiday shopping.

Everyday Gift Card Deals

The holiday shopping season is a good time to stock up on gift cards. Gift card deals may include a variety of promotions and discounts. For example, you may get to purchase a gift card at a certain percentage off.

Many stores will offer free gift cards with the purchase of other items. You can save the gift cards and use them throughout the year. For example, if you purchase an item from a big box store you wanted for the holidays, save the gift card for everyday things like groceries.

If stores offer deals on gift cards, purchase gift cards you will use for various needs. The savings quickly add up. For example if you purchase a 100 dollar gift card at 10 percent off, then you will save ten dollars on the purchase. Then if you use the gift card to purchase items on sale in the future, you stack the savings on top of each other.

Household Items

The holiday shopping season is a great time to save up on a variety of household goods. On the smaller end, you have the option to purchase items like towels, washcloths, pillows, and sponges. The items will be heavily discounted at a variety of stores. The use of a loan can help cover the purchase price instead of paying more money for the items down the line.

You may find you need a bigger purchase like a kitchen appliance. If appliances like refrigerators or dishwashers need replacement soon, you do not need to wait until the appliance breaks. Take advantage of the sale prices so you do not pay more in the long run.

If you end up saving hundreds of dollars on an appliance, then the savings will be worth getting a loan for. You may even find good deals on a variety of furniture. If you are in need of a good table, chair, or couch, shop the deals and compare with original prices to ensure you get the biggest discounts.

Rewards Cash & Rebates

Even if you cannot find gift card deals for stores you prefer to shop at, many stores offer rewards cash or rebates for purchases. The key to getting the most out of rewards cash is with the purchase of items you will actually use as opposed to just buying items to get the rewards cash.

For example, in department stores and clothing stores offering discounts, purchase items you will need like socks and underwear. Use the rewards cash in the future for shoes or clothes as needed.

Rebates are another ideal option and a great way to use a small loan for big savings in the future. Make practical purchases for everyday items and you can spend enough for rebates and cash-back offers. A lot of rebates are now paid out with prepaid debit cards. With the cards, you have the option to spend the rebate money anywhere you choose.

For maximum savings, use the rebate cards on things like gas and groceries. The savings really add up throughout the year and you could save and earn back more than you actually spent. For more information on small loans and our application process, contact us at Central Finance. We can help you get set up with a loan in the days that lead up to your holiday shopping so you can plan all of your savings.

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