Business owners often struggle with cash-flow issues. An intermediate-term loan can help. These loans can provide business owners with a much-needed supply of cash that they can invest in their marketing efforts or product development. Business owners, though, will have to meet certain requirements to earn one of these loans from a bank. The National Business Information Clearinghouse says that businesses often rely on these loans to purchase new equipment or expand their services or physical site.
Intermediate-term loans differ from long-term loans in one key respect: These loans usually run for fewer than 3 years before they come due. During the life of the loan, business owners pay back their bank or lenders in monthly installments. Some intermediate-term loans have balloon payments at the end of a set period of time, meaning that business owners must pay the remainder of the loan's value in a large lump sum.
Business magazine \"Entrepreneur\" says that intermediate-term loans are abundant. However, different banks are willing to take on different levels of risk. Some banks will require more evidence that a business will be able to pay back a loan than will others.
What Business Owners Need
Before giving business owners intermediate-term loans, banks want to know how much capital the businesses have. Lenders want to see assets that can be turned into cash quickly. Lenders can rely on these liquid assets to repay their loans in the event that a business owner defaults on payments. A business owner's capital may include apartment buildings, other real estate and stocks.
A Strong Business Plan
Lenders will also want to see a strong business plan before lending money. They'll be especially interested in the expenses and revenues that business owners project for their ventures. If these figures seem poorly researched, the odds are good that lenders will pass.
\"Entrepreneur\" recommends that business owners shop carefully for an intermediate-term loan. The magazine also advises business owners to tell potential banks that they are talking to more than one lending source for possible cash. This will encourage banks or other lenders to offer their best loan products, and will help business owners get the best interest rates and loan terms.
Don Rafner has been writing professionally since 1992, with work published in "The Washington Post," "Chicago Tribune," "Phoenix Magazine" and several trade magazines. He is also the managing editor of "Midwest Real Estate News." He specializes in writing about mortgage lending, personal finance, business and real-estate topics. He holds a Bachelor of Arts in journalism from the University of Illinois.