Loans-Short and Long term business loan, Long term Personal loans

Short term Business loans:

A short term business loan is an option for an established business that has a strong clientele support and patronage. The reason is that there are strict repayment rules for short term business loans and if the loan is taken to cover operating costs of the business until the payment is received from a customer, and the loan is to be repaid as soon as the money is received. Lenders are more likely to give a new business a short term business loan because the loan is usually for less money, and the repayment schedule is shorter. The loan amount may be used for initial investments for the business, and should be able to repay it back in a timely fashion.

Long Term Personal Loan:

A long term business loan is usually used to fund larger investments and expenses for a company. New business loans can fall under the long term business loan category. Some business units seek to procure this loan to meet the working capital needs, for expansion/growth of the business unit. As the name suggests, long term loans are those which are to be re paid over a long duration of time. They are acquired for purchasing land, production of plants and heavy machinery etc. A debt-based funding arrangement that a business can set up with a financial institution. Long term loans require collateral security of the assets and a part of the total amount is required to be paid after a stipulated period (ex: 6 months or 1 year).

These loans can also be categorized in other two sub categories like Secured loans and Unsecured loans. Let us read more about them.

Long Term Business Loans:

It is a loan granted for meeting the specific long term needs of the business. A long term business loan is usually used to fund larger investments and expenses for a company, especially if the company is going through a period wherein less money is generated. New business loans can fall under the long term business loan category. The bank may offer other types of funding in the form of new business.

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