Working Capital/ Short Term Loan
A short term loan is a type of loan that is obtained to support a temporary personal or business capital.
A short term loan is a type of loan that is obtained to support a temporary personal or business capital.
Last Updated Date: May 17, 2022
Kumari Bank Limited is a commercial bank existing as the fifteenth industrial financial institution of Nepal by beginning its banking operations from Chaitra 21, 2057 B.S (April 03, 2001) with an objective of offering competitive and current banking services financial market. Kumari Bank Limited has acquired Kasthamandap Development Bank, Mahakali Bikas Bank, Kakrebihar Bikas Bank, Paschimanchal Finance. Kumari Bank Limited is currently trading on Nepal Stock Exchange with the symbol KBL. KBL has provided a dividend return of 8.5 percent in the fiscal year 2074/75. Kumari Bank Limited has appointed Kumari Bank Limited as its share registrar. The Bank has been imparting both Domestic and International Visa Debit Card and Credit Card, accessible in all VISA linked ATMs in Nepal and India, presenting extra offerings to the clients thru its 108 ATMs and quite a few POS terminals by exemplifying exact company governance, proactive danger management practices, and most efficient corporate social responsibility. Along with this, the Bank has additionally been presenting today's Mobile Banking, Internet Banking, Viber Banking, and QR PaymentsKumari Bank Limited have been providing wide-range of modern-day banking services through 221 factors of illustration located in a number of urban, semi city section and rural components of the country, with 186 branches, thirteen extension counters and 22 Branchless Banking Units. The bank aims to supply progressive products and offerings to their customers, use these innovative products to reap financial inclusion, and do so by exemplifying exact company governance, proactive danger management practices, and most efficient corporate social responsibility.
A short term loan is a type of loan that is obtained to support a temporary personal or business capital need. As it is a type of credit, it involves repaying the principle amount with interest by a given due date, which is usually within a year from getting the loan. A short term loan is a valuable option, especially for small businesses or start-ups that are not yet eligible for a credit line from a bank. The loan involves lower borrowed amounts, which may range from $100 to as much as $100,000. Short term loans are suitable not only for businesses but also for individuals who find themselves with a temporary, sudden cash flow issue.
Short term loans are called such because of how quickly the loan needs to be paid off. In most cases, it must be paid off within six months to a year – at most, 18 months. Any longer loan term than that is considered a medium term or long term loan. Long term loans can last from just over a year to 25 years. Some short term loans don’t specify a payment schedule or a specific due date. They simply allow the borrower to pay back the loan at their own pace. When your business doesn't qualify for a line of credit from a bank, you might still have success in obtaining money from then in the form of a one-time, short-term loan (less than a year) to finance your temporary working capital needs.
There are many advantages for the borrower in taking out a loan for only a brief period of time, including the following:
As short term loans need to be paid off within about a year, there are lower total interest payments. Compared to long term loans, the amount of interest paid is significantly less.
These loans are considered less risky compared to long term loans because of a shorter maturity date. The borrower’s ability to repay a loan is less likely to change significantly over a short frame of time. Thus, the time it takes for a lender underwriting to process the loan is shorter. Thus, the borrower can obtain the needed funds more quickly.
Short term loans are the lifesavers of smaller businesses or individuals who suffer from less than stellar credit scores. The requirements for such loans are generally easier to meet, in part because such loans are usually for relatively small amounts, as compared to the amount of money usually borrowed on a long term basis.
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