3 things to consider when seeking a short-term financial solution

Linda D. Garrow

Want to have a business but don’t have the capital? Loan funds are often the mainstay. If you also take this policy, then be smart in applying for a loan. One alternative is that you can apply for a business capital loan without a short-term guarantee.


What is a Short Term Loan?

There are many categories of loans based on the time of repayment. One of them is a short-term loan. This loan is a loan product with a repayment period of no more than one year.

Many use it to solve the problem of stagnant trading business capital. In addition, this loan can also be used to cover primary needs which are increasing day by day. When income does not increase, then this loan can be a solution for you, for more information: https://www.withuloans.com/


Where to Apply for a Safe and Reliable Short Term Loan?

You can get safe types of short-term loans at various lender services. Some require a guarantee, and some do not require a guarantee.

If you don’t have assets as collateral, then choose a fintech with a product in the form of peer-to-peer lending. This loan has the following characteristics:


    Tenor or short repayment period

    The limit is small and limited

    Easy submission

    Simple terms even without a guarantee

    Can be accessed via the website and application


However, those who are new to the term fintech, first understand the meaning of the term. Fintech stands for financial technology which is an innovation in the field of financial services that can be practically accessed.

In the business world, especially today, many companies, both large and small businesses, cannot simply rely on internal sources of funding, but can also come from short-term debt.


How to calculate the risk 

However, as a businessman, you also need to use external sources of funds such as credit or debit. Debt is needed as a tool to accelerate and help the company to run effectively and efficiently without being disturbed by the problem of lack of capital. If used properly, debt is very helpful for companies in managing finances so that they remain stable and all company needs can be met.


  • Calculate your short-term debt risk

When you decide to go into debt, you should make careful planning so as not to endanger the finances of the company you are running. The purpose of the loan funds should be clear and in detail.


At the same time, this plan can be used to convince lenders, because with a clear purpose it can also show your ability to make payments according to maturity. In addition, you have to think about risk anticipation by preparing a backup plan so that the company can face the worst possibility in the future. This also helps companies to be more careful in using loan funds.

  • Debt according to need


In applying for debt, try to focus on the initial goals and needs of the company. Meet the needs that have been determined previously. Firmness in using loan funds will reduce the risk of misuse of money or loan funds, for mare information:  withuloans


For example, you want to borrow from a bank to pay for the purchase of raw materials from a supplier. You need to calculate how much money is borrowed and the ability to repay it within a certain period. If it’s too big, you could have a hard time with it.


  • Neat bookkeeping

Bookkeeping is also the most important thing that needs to be considered in the development of a business. Bookkeeping is the process of collecting and recording data and information related to business finances in an orderly and detailed manner. With good recording and bookkeeping, the company’s movements will be seen more clearly, able to control operational costs and know the assets owned, as well as good debt management, will also be obtained if the books are recorded properly, neatly, and correctly.

  • Paying debts on time


In a debt agreement, there must be principal, interest, and maturity. Debt arrears means increasing the company’s burden. Not only the principal debt is not paid, but the interest on the debt will also increase. Moreover, coupled with the fine due. Therefore, try to pay debts or installments on time according to the agreed tempo.


  • Measuring debt with the current ratio

Based on the repayment period, debt can be divided into short-term debt (current debt), medium-term debt, and long-term debt. Short-term debt loans are usually used to fund needs that support the company’s daily activities and are immediate and cannot be postponed.


This short-term debt generally must be met or paid within a certain period (at least one year). Paying off short-term debt generally uses current assets as sources. To pay the obligations or short-term debt, the first thing the company should do is calculate the ownership of the company’s assets or assets. When the company is billed to pay off its debts, it will calculate how much of its current assets or assets can cover the debt. The greater the value of the current ratio, the more liquid the company is said to be.

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