How and When to Use Short Term Loans


By Contributing Author

How and When to Use Short Term Loans

There are a number of reasons why someone might have a short term cash shortage. It could be that their business is in the early stages of development, and they’ve found themselves paying more expenses than they’re currently earning. It could even be that their home needs some repairs doing, but at present they don’t have the cash to pay out for the work to be done. Regardless of the reason, one thing is for certain – we can’t pluck money out of thin air. It can be extremely difficult to know what to do in these situations, however short term loans can be a perfectly viable solution for many people. If you’ve ever found yourself in a situation where you need to borrow and pay back a sum of money in a short space of time, then here is some advice on how and when short term loans should be used.

You Find Yourself in a Cash Flow Issue

If you were ever to find yourself with cash flow issues and in need of a short term loan, there are short term loans from Personal Money Network readily available. However, let’s first have a look at some of the reasons you could find yourself in a difficult cash flow situation.

It could be that you’re a business owner, and your income peaks and troughs at various times of the year. If you have an uneven income structure, although in the prosperous months you’re likely to be very comfortable, what do you do in the calendar months when things aren’t so busy? Especially if you still have outgoings to consider within your business, such as employee payment and supplies. Well in these quieter months, this is when a short term loan could slowly become your best friend.

It could even be that your business has supplier bills to pay in these time frames, or that in the early days you need a little help getting going. All of these possibilities are relevant as to why you could be applying for a short term loan.

Helping Out Seasonally

It’s no secret that at certain times of the year, we all have to pay out more in expenses – but have you ever thought about how that works for businesses? Sure, they might take in more in earnings in the long term, but quite often, say at Christmas, they’ll require extra staff which is a huge outgoing.

You’ll likely have noticed the amount of Christmas job applications that are advertised around this time of year, ready to recruit and train just in time for the holiday season. This is great for people looking for temporary work, but have you ever considered how much businesses have to pay out in these busy periods? Of course, as mentioned, after the shopping rush, companies are more than likely to make their money back, but in the initial stages it can be difficult to balance the difference between outgoings and incomings. In order to bridge the gap, a lot of businesses – particularly small businesses – may require a short term loan in order to tide them over. Of course, it’ll be easily paid back once the holiday season comes to an end, but in the mean time it could be the difference between thriving and struggling.

Emergency Expenses

Finally, in life, generally speaking, we all try and be as well prepared as we can be for any eventualities. However, regardless of what we do, accidents will happen, and therefore emergencies can’t always be prepared for in advance. The worst thing about this is, these accidents aren’t always easily solved, and a lot of the time actually involve us having to spend money at little to no notice.

Say for example you’re a landlord with tenants. It is entirely your responsibility to meet the safety living standards of property for the tenant, so if something breaks or becomes unsafe, it’s on your head (and bank account) to fix it.

Unless you’re particularly handy or it’s a small job, chances are you’re going to end up having to hire someone to do the job for you. A lot of the time, especially when properties and their appliances are older, you’re actually going to end up having to replace items within the house. At short notice, buying an entire new appliance can seem nigh on impossible if you don’t have the cash at the time, and this is where a short term loan could be helpful.