Short term loans are a great option for businesses because most lenders will not require a minimum credit score in order to accept an application. Unfortunately, lenders make sure that the borrowed money is protected by setting a rigorous payment schedule. Depending on the lender, they may require that payments be made daily or weekly, rather than monthly. Having to pay back a loan daily, or even weekly, can be quite challenging for some business owners. So, thinking about a payback amount you can comfortably afford is the best place to start when it comes to deciding how much of a loan you should request. Thinking about this amount as a monthly payment could make it even easier because the payment can always be broken down into a daily or weekly amount if the lender chooses to use that payment schedule.
Start by thinking about the total amount of money it’ll take to cover your business expense. Input that number in the loan amount field of the short term loan calculator. Then, think about a realistic interest rate a lender might set on the loan. Keep in mind that interest rates are determined by adding a premium to the prime interest rate. While you can’t negotiate the prime rate, you can negotiate the premium that the lending company will set. Try to be realistic when you enter the interest rate into the short term loan calculator. Finally, think about how long you believe it’ll take you to pay off the loan. Since these are short term business loans, the length should be fairly short. Once all of the fields are populated, your result should return a monthly payment based on the information you provided.
Play around with the fields on the short term loan calculator to come up with a payment you feel comfortable with. Then, keep those numbers close to you throughout the business loan application process so that you can wisely negotiate with various lending companies. If you can’t come up with a monthly payment you feel comfortable committing to, look into other business funding options that offer a little more flexibility with terms.
