Sometimes in business, at the most in opportune moment, stuff just goes wrong.
You can have all the contingencies in the world, including up to date and appropriate insurance, but stuff breaks, goes offline, off the road, catches fire, gets stolen or some other version of business problem that stops you delivering your services or manufacturing your products or helping your customers. When that happens you’re losing dollars and this is where short term funding comes in handy for a business.
Consider this circumstance: A fire incident occurred and damaged a vital production machine and the business needed to replace the machine immediately to avoid a loss in trade. Insurance will ultimately cover the payment for the new machine (making a equipment finance an unnecessary and in the longer term a more costly option) but short term funding was utilised to make the payment to the supplier for the new equipment. $370,000 was made available to the business so they could pay their machine. Time from enquiry to settlement? 48 hours.
Unsecured lending is a great finance product when you can see a tangible benefit and return on the cost of the funding.