By Fernando Berrocal

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As a brand-new business owner, you’re well on your way to discovering the different problems that arise when launching and developing a startup. Every kind of entrepreneur is knowledgeable regarding the challenge of securing the funding necessary to start a brand-new startup. Even after your organization has been pretty much established in the marketplace, it doesn't take much to negatively impact your cash flow. You'll need to locate another source of funding at that point. Then, a short-term internet business loan can be the ideal response to this specific issue.

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A short-term business loan is meant to be returned in a short period, as the title effectively suggests. Depending on the amount requested and the loan lender, the wait time might range from three months to even a few years down the line. An overdraft or line of credit could be a smarter alternative in some circumstances. However, following the 2007 - 2008 World Financial Crisis, different banks worldwide tightened their business lending standards. These financial institutions will only provide this form of financing to businesses with excellent credit scores. 

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So, the question to ask in this situation is the following: What are the main advantages of a short-term online business loan? In this post, we will go over the main advantages–and drawbacks.

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The Convenience Factor

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Regular banks often have somewhat challenging business loan application procedures; it can be pretty intimidating for any business owner. There are different documents of incorporation,  balance sheets, and often three years (sometimes even more) worth of trading records and tax filings. All of this (and, sometimes, even more!) may be requested by these financial institutions. 

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On the other hand, there is a lot less paperwork to worry about when using a business online loan program. That will provide you with more time to manage and develop your startup business–and assist your startup team with their needs.

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Loan Flexibility

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With a short-term online business loan, you are empowered to choose the payment plan that is most suitable for you and your team, your business, and your cash flow under a flexible payback structure. You will be given the option of selecting the loan repayment period, which can be expressed in whatever time frame you choose.  This can be in days, months, or even years. By choosing this route, you may reduce any negative effects on your cash flow (as well as your interest costs).

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Overall Cost

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Even though so-called alternative business lenders have a reputation in the corporate environment for being rather pricey (when compared with regular lenders), this isn't always the case. Some online business lenders frequently provide new businesses (or individuals with substandard credit scores) with better rates than banks and other financial institutions. It’s up to you to do your respective research–and compare amounts, interests, time, and other facilities and choose the best option available.

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The Speed of the Process

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Traditional banks aren't recognized for making decisions quickly because of their laborious business loan application process. If you've suddenly run into a cash flow problem and need money as soon as possible, this might be quite disastrous.

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On the other hand, online business lenders are known to act fast to process the loan–and provide the funds. Within 24 hours of applying, you could have access to an emergency business loan in your business account. These enable you to concentrate on promptly meeting your market's needs–and your business development.

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Security of Information

Since you aren't handing up piles of unnecessary paperwork that traditional financial institutions require, it goes without saying that your organization's confidentiality is pretty much protected. There are fewer chances of business papers getting a leak in the marketplace–in other words, you will feel more secure that your competition won't know what you are up to.

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In 2022, there is no need to have a strong credit score (or a long business history) to secure a short-term internet business loan. Maybe that was the case some years ago, but with the internet at your disposal, these terms are more flexible. Don’t be hesitant to apply; online lenders are more concerned with your business's capacity to pay back the startup loan in the time specified. 

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There are several possibilities available, so do thoughtful business research on various business lenders.  Select the one that seems right for your situation, and then move forward with it. Keep in mind that you have a lot to gain and nothing to lose in this situation–be ambitious with your business decisions.

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Ready to bring your startup to the next level? Apply to MassLight’s next batch. MassLight supplies capital and a dedicated tech team. We take equity in return. Have questions? Refer to our FAQ page.