5 Valuable Benefits of Securing a Short-Term Loan

Nov 12, 2020
rand currency

A significant chunk of building a successful business is looking for continuous expansion, which can be mostly done with financial resources. Nobody is in business to break even, the same way that business owners should not be content in achieving stability. A hallmark of a successful business is that the owner understands how to take calculable risks. 

Enterprising individuals should not be afraid of borrowing money from reputable loan providers. Provided that an individual has sound financial management skills, they can take advantage of these five benefits. 

Improved cashflow 

Every business has good days and bad days. Smaller companies without adequate financial backing are particularly at risk because a few months of low sales numbers can cause them to shut down. The best way to avoid this scenario is to have adequate financial planning. 

Part of sound financial planning is to run the worst-case scenario and always have a backup plan. One way to stay liquid through periods of slow growth is to secure short-term loans that can be used to pay off suppliers, employee salaries, and other operational costs. 

Take advantage of seasonal trends 

Even small businesses can benefit from seasonal upticks where the demand is too much for their operational capacity. A short-term loan can help you ramp up production and take advantage of the seasonal increase in demand. 

This is a crucial business strategy because the inability to keep up with demand will force your customers to look at your competition, resulting in lost revenue. Before the demand becomes too much for your current staff and equipment to handle, consider taking out a short-term loan. 

Expansion opportunities

Certain factors can contribute to a business owner’s desire to expand. Whether through sheer ambition or the ability to take advantage of a growing demand for certain goods and services, an owner may want to expand and establish dominance while there is no serious competition. 

The cost of expansion will be extensive, which is where short-term loans come in. The extra capital you can get from short-term loans––such as those offered by Hoopla Loans––will allow you to purchase additional equipment, hire more staff, or even rent out a bigger space for your planned expansion. 

Improved credit rating 

In many cases, having a less than ideal credit history is better than having none. By taking out a loan and, more importantly, paying them on time, you are establishing yourself as a good payer. This lowers your associated risk from the eyes of a loan provider. Ultimately, this gives you access to bigger credit lines and allows you to take longer-term loans in the future!

Ability to tide over emergencies 

Good planning is everything in business, but even the most seasoned business owners can get surprised by emergency threats. For this reason, it’s crucial to always have a backup plan to ensure business continuity, especially for emergencies caused by natural disasters or crime.

Most established companies do this with adequate insurance coverage. However, if you’re a small business still trying to establish your foothold in your target market, you might not have enough resources to do so. The next best thing is to take out a short-term loan. Using the borrowed cash, you can then pick your business back up and continue operating! 

Conclusion 

It’s not an exaggeration to say that successful business owners are always in debt. Every form of business carries risk; the trick is knowing which ones to take for maximum reward. If you decide to take out a short-term loan, use it as an opportunity to improve your business so that you will achieve your business goals and pay the loan back to get a better credit rating!

Hoopla Loans is your best bet for fast and easy online loans in South Africa. It takes only four minutes to apply for a loan using our app, and you’ll get your money within hours. Contact us today to learn more!