Uses of short-term funding (2024)

Aside from traditional banks loans, there are alternative sources of short-term funding that can help businesses grow.

Many of these short-term funding options are ideal for companies that only need extra financing for a couple of days, weeks or months.

Short-term funding for small business owners can be a great way for companies to access cash flow, whether they are first starting out, looking to scale up, or stable and looking to plan for the future.

Funding a start-up

If you’re a new business looking for a short-term funding solution, invoice discounting can offer a fast and simple way to improve cash flow. You can release funds tied up in your outstanding customer invoices, getting paid in days – not weeks or months!

Such short-term funding can be accessed quickly, allowing your business to start operating as soon as possible.

Short-term small business funding can be combined with other finances to help set up your business. There are many aspects which need to be covered including:

Purchasing assets
Paying staff
Covering legal costs
Renting office space
Inventory

Short-term funding can help ensure you have enough finances to meet all these costs and set up your company with a stable financial foundation. These can be combined with government funding for small businesses, other loans, savings or any other finances you already have.

Financing growth

If your business is hoping to grow, whether it’s developing new products or even expanding overseas, then you’ll need to ensure you have enough financial backing to cover all costs involved.

As your sales increase, so will your production costs. This can include expenses such as paying suppliers, deliveries, employees and more. There are many ways a business can grow, but each one will require additional funds to ensure success.

Safeguarding against surprise expenses

To protect against any surprise costs or expenses that may occur, it is always advisable that businesses (especially start-ups and SMEs) have plenty of emergency funds on hand.

For companies that don’t have much back-up, short-term funding can help prevent any financial troubles should your business be hit by surprise expenses.

This could be anything from a hike in the price of supplies and deliveries, to surprise legal costs or tax increases. If your business has not prepared or budgeted for these, then it can significantly impact upon your finances.

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