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Instant loans are a good way to get a fast injection of cash. But are they the best option for your business? When you are just starting out in business or have been running your business for a short period of time, getting access to funding is not always easy. Banks will often turn you away for not having a business credit rating, and other lenders might require you to have a longer financial history for your business before you can consider applying. While there are other options for small businesses, such as angel investors or crowdfunding, to consider, these can often be time-consuming, which is not always ideal if you need to raise cash quickly. So, is an instant, short-term loan the answer?
Designed for Personal Lending
The fact that a short-term, instant loan is designed for personal use could work in your favor if you need money for your business. As long as there are no restrictions on what you can use the loan for, you can apply for instant loans in Canada and have the money in your personal account quickly to spend on your business. In many cases, as long as you pay the loan back, it is up to you what you use it for, and there’s no need to worry about your business’s financial records or credit rating as you personally are being assessed as a borrower rather than your company.
Get Access to Cash Quickly
Compared to the majority of business lending options, an instant or payday loan can be an ideal option for getting access to the cash you need as quickly as possible. Some lenders will even approve the loan to be paid to your bank account within mere minutes of having the application approved. If you’re in an emergency situation and need a quick influx of cash, it can definitely help you out.
Lend Smaller Amounts
Short-term and instant loans are generally designed to cover emergency expenses; therefore, you can usually borrow much less money than with a long-term, conventional business loan. This might be ideal if you need cash quickly but don’t need a huge amount. If you only need a couple of hundred dollars to pay an expense or buy something that your business needs urgently, then a short-term loan might work.
While there are a few advantages to consider when it comes to getting a short-term loan for your business, like anything, it is worth weighing up the downsides too. Short-term loans often have high-interest rates, so if you are not careful, you could end up paying back double what you borrowed. Along with this, since they are generally repaid on your next payday, some lenders prefer employed borrowers rather than business owners, which could impact your ability to get approved.
If you need cash quickly for your business, then a short-term, instant loan is just one option to consider. It may be worth applying if you need a small amount of money straight away.
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