David S Capo Discusses 3 Loan Options for Short-Term Financing

With twenty years of experience in the financial industry, David S Capo enjoys providing education to individuals and businesses about various aspects of finance. David S Capo knows that short-term financing can sometimes be a lifesaver for businesses experiencing a financial crisis or reduction in business flow. Here, David S Capo outlines three loan options businesses may want to consider when seeking short-term financing.

The best option for short-term financing really depends on the size and specific needs of your business. According to David S Capo, small and medium businesses may want to consider senior debt. Businesses that use this option can often become approved for larger loan amounts based on their current assets. Although interest rates can be higher with this option, David S Capo points out that if many assets exist this may be a good option.

Much like senior debt, subordinated debt’s financing criteria is similar with the exception that assets are not required for collateral security. Many businesses find subordinated debt more appealing because, should a business fail or go bankrupt, this type of debt comes after primary debt. David S Capo acknowledges that senior debt may be a smart option for businesses that are already up and running and have an existing bank.

Convertible debt is another option that many businesses find appealing, particularly startups and new businesses. This type of debt does not require assets for collateral security nor does it require that the borrower is currently generating monthly revenue. David S Capo points out that, in his experience, this option is very popular.