Best short-term business loans

Small businesses in need of immediate financing can receive fast funding through short-term loans.


LOAN AMOUNT

$10k-$5 million

TIME TO FUND

1-3 Business Days

LOAN TERMS

6 months-7 Years

Best short-term business loans.

The following lenders offer business financing for terms of 12 months or less.

Lender/funder*Best loan/financing typeLoan/financing amountMin. time in businessLoan/financing termMin. credit scoreTime to funds (after approval)
Funding CircleTerm Loan$25,000-$750,0002 years6 months-7 years660As fast as 3 days
Kapitus
Business cash advance
$10,000-$750,000
3 years6-36 months6401 business day
OnDeckBusiness cash advance$5,000-$250,000
2 years
6-18 months
625
Same day
BlueVineLine of credit$250,0002 years6-12 months650Same day
Raistone CapitalInvoice factoring$50,000-$50 million+1 year30-180 days+N/A1 business day

Funding Circle – Term Loan

Funding amount

$25,000-$500,000

Term

6 months-7 years

Min. credit score

660

Time to funding

As fast as 3 days after approval

Funding Circle offers a short-term loan from $25,000 to $500,000.

Pros:

  • Best SBA alternative
  • Fixed monthly payments
  • No early repayment fees that lets you save on interest
  • Large loan amounts available

Cons: 

  • 2 years minimum time in business requirement
  • Longer possible time to receive funds than other lenders might take

Funding Circle – Term Loan

See loan options Read review

Funding amount

$25,000-$500,000

Term

6 months-7 years

Min. credit score

660

Time to funding

As fast as 3 days after approval

Funding Circle offers a short-term loan from $25,000 to $500,000.

Pros:

  • Best SBA alternative
  • Fixed monthly payments
  • No early repayment fees that lets you save on interest
  • Large loan amounts available

Cons: 

  • 2 years minimum time in business requirement
  • Longer possible time to receive funds than other lenders might take

Kapitus – Business Cash Advance

Funding amount

$5,000-$250,000

Term

6-36 months

Min. credit score575

575

Time to funding

As little as 24 hours, once approved

Kapitus offers a business cash advance with terms up to three years.

Pros

  • Best renewal experience
  • Approval within 4 hours
  • 575 minimum credit requirement
  • Payments taken from bank account can be daily, weekly, or monthly

Cons:

  • Doesn’t build business credit (borrower may be able to self-report to credit bureaus)
  • One year in business required

Kapitus – Business Cash Advance

See loan options Read review

Funding amount

$5,000-$250,000

Term

6-36 months

Min. credit score575

575

Time to funding

As little as 24 hours, once approved

Kapitus offers a business cash advance with terms up to three years.

Pros

  • Best renewal experience
  • Approval within 4 hours
  • 575 minimum credit requirement
  • Payments taken from bank account can be daily, weekly, or monthly

Cons:

  • Doesn’t build business credit (borrower may be able to self-report to credit bureaus)
  • One year in business required

OnDeck – Business Cash Advance

Funding amount

$5,000-$250,000

Term

6-18 months

Min. credit score

600

Time to funding

As fast as same day after approval

OnDeck offers short-term financing with terms of up to 18 months.

Pros:

  • Best online closing experience
  • Fast funding
  • Can help boost your credit because they report to the major credit bureaus 
  • No prepayment fees

Cons: 

  • Potentially costly factor rates compared to other types of financing
  • Weekly payments

OnDeck – Business Cash Advance

See loan options Read review

Funding amount

$5,000-$250,000

Term

6-18 months

Min. credit score

600

Time to funding

As fast as same day after approval

OnDeck offers short-term financing with terms of up to 18 months.

Pros:

  • Best online closing experience
  • Fast funding
  • Can help boost your credit because they report to the major credit bureaus 
  • No prepayment fees

Cons: 

  • Potentially costly factor rates compared to other types of financing
  • Weekly payments

BlueVine – Line of Credit

Funding amount

Up to $250,000

Term

6 or 12 months

Min. credit score

650

Time to funding

As fast as 24 hours after approval

BlueVine’s short-term line of credit come in six or twelve-month terms.

Pros

  • Best line of credit for speed to decision
  • Fast funding
  • Option for monthly or weekly payments

Cons: 

  • Not available to businesses in Nevada, North Dakota, and South Dakota
  • Fees for drawing on your line of credit
  • Personal guarantee for the funding required

BlueVine – Line of Credit

See loan options Read review

Funding amount

Up to $250,000

Term

6 or 12 months

Min. credit score

650

Time to funding

As fast as 24 hours after approval

BlueVine’s short-term line of credit come in six or twelve-month terms.

Pros

  • Best line of credit for speed to decision
  • Fast funding
  • Option for monthly or weekly payments

Cons: 

  • Not available to businesses in Nevada, North Dakota, and South Dakota
  • Fees for drawing on your line of credit
  • Personal guarantee for the funding required

Raistone Capital – Invoice Factoring

Funding amount

$50,000-$50 million

Term

30-180+ days

Min. credit score

N/A

Time to funding

As little as one day

Raistone offers short-term invoice factoring with terms from one to three months.

Pros:

  • Best for large facility needs
  • Get cash quickly, instead of waiting
  • Relationship with your customers stays the same

Cons: 

  • Minimum funding amount of $50,000
  • Doesn’t build business credit—business owner may be able to self-report

Raistone Capital – Invoice Factoring

See loan options

Funding amount

$50,000-$50 million

Term

30-180+ days

Min. credit score

N/A

Time to funding

As little as one day

Raistone offers short-term invoice factoring with terms from one to three months.

Pros:

  • Best for large facility needs
  • Get cash quickly, instead of waiting
  • Relationship with your customers stays the same

Cons: 

  • Minimum funding amount of $50,000
  • Doesn’t build business credit—business owner may be able to self-report

What is a short-term business loan?

A short-term business loan provides a lump sum of fast funding to small businesses in need of financing. These loans typically have a term length ranging from three to 12 months, although some lenders may offer terms up to 18 months. 

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Types of short-term business loans.

Short-term business loans come in various forms. Let’s define each type:

  1. Term loans – These are loans with a fixed repayment term and interest rate. They are typically used for specific projects or investments.
  1. Lines of credit – This type of loan provides businesses with a revolving credit limit that can be accessed as needed. Interest is only charged on the amount borrowed.
  1. Invoice factoring – This financing option involves selling accounts receivable to a third party at a discount. It provides immediate cash flow by converting unpaid invoices into working capital.
  1. Business cash advances – This type of loan allows businesses to receive a lump sum payment in exchange for a percentage of future sales.

It is important for businesses to research and compare these different options before deciding on the best fit for their needs.

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How do short-term business loans work?

Short-term business loans typically involve a simple application process, quick approval times, and fast funding. Once approved for a loan, the borrower receives a lump sum of money and agrees to repay it within the specified term length. Repayments are typically made on a weekly or monthly basis, depending on the terms set by the lender.

Use cases for short-term business loans.

Short-term business loans can be an ideal solution for businesses needing to bridge cash flow gaps, handle unexpected expenses, or finance small-scale expansion projects.

Working capital

Short-term business loans are often used to provide an influx of working capital. This can be especially useful for businesses that are experiencing a slow season or are waiting on slow-paying customers. The immediate cash flow can be used to cover regular expenses like payroll, rent, or utilities.

Inventory purchases

For retail businesses or those that sell physical goods, short-term loans can be used to purchase inventory. This can be particularly beneficial ahead of a busy season or a large sale, allowing the business to stock up on products without depleting their cash reserves.

Equipment repairs

Unexpected expenses can arise at any time in the form of necessary equipment repairs or replacements. A short-term loan can provide the funds to address these issues promptly, minimizing downtime and potential loss of revenue.

Pros and cons of short-term business loans.

Like any financial decision, obtaining a short-term business loan comes with both advantages and drawbacks. Understanding these can help businesses make informed decisions about their financing needs.

Pros of short-term business loans.

Quick access to funds – Short-term loans can often be approved and funded quickly, providing immediate access to capital when businesses need it most.

Easier approval – Compared to long-term loans, short-term loans may have less stringent eligibility criteria, making it easier for some businesses to qualify.

Debt paid quickly – As these are short-term loans, businesses can repay the debt swiftly and be free of it sooner compared to long-term loans.

Helps manage cash flow – Short-term loans can help businesses manage operational costs during downturns or slower business periods.

No long-term commitments – Short-term loans allow businesses to avoid long-term financial commitments, which might not be ideal in certain situations.

Cons of short-term business loans.

Higher interest rates – Short-term business loans often come with higher interest rates compared to long-term loans.

Frequent repayments – Some short-term loans may require weekly or even daily repayments, which can be challenging for businesses with irregular cash flow.

Risk of debt cycle – If a business is not careful, it can find itself in a constant cycle of borrowing to cover its costs, leading to a potential debt trap.

May not cover large expenses – Given their nature, short-term loans may not provide ample funding for major business investments or large-scale projects.

Impact on credit score – If a business fails to make repayments on time, it could adversely affect its credit score, making future borrowing more difficult or expensive.

Minimum requirements for a short-term loan.

The eligibility criteria for obtaining funding may differ based on the type of loan and the lender.

CREDIT SCORE

600+

Credit score requirements will vary. While some options are available for scores in the 500’s, a minimum credit score of 600 will make it easier to qualify for a loan.

MONTHLY REVENUE

$8K+

Lenders will want to see a minimum threshold of monthly revenue. Like the other requirements, the exact minimum will vary by lender and loan type.

TIME IN BUSINESS

6 MONTHS+

While some lenders may allow for three months and others may require 1-2 years, six months is a good rule of thumb to follow to improve your chances of qualifying for funding.

How to apply for a short-term loan.

Sure, you can go the bank route with a long application process and 75% rejection rate. But if you’re looking for financing in this lifetime, Lendio offers a faster, easier application process.

STEP
1
Fill out the 15-minute online application.

It’s secured with bank-grade encryption and SSL technology, so you know your information is safe.

STEP
2
Receive matches.

We pair you with loan options from our network of 75+ lenders. Our dedicated funding managers can help you weigh the pros and cons of each option.

STEP
3
Get funded.

Once you’re approved, you’ll be able to access your capital in as little as 24 hours.

Apply Now

Why use Lendio?

$12+ BILLION

funded through us

75+

lenders in our network

300,000+

loans funded

“The Lendio process was amazing”

Sterling Hannemann
Co-Owner of Seven Brothers

“Lendio literally saved my business.”

Chloria Chandler
Owner of Bobbee O’s BBQ

FAQs

The term for these small business loans is right in the name: short-term. Short-term business loans typically have repayment terms of 18 months or less.

The interest rate for short-term business loans can vary depending on the lender, the borrower’s credit score, and the loan amount. Generally, interest rates for these loans tend to be higher than those of traditional long-term loans, due to their shorter term lengths.

Some short-term funding products will use a factor rate instead of an interest rate. Unlike interest rates which are expressed as a percentage of the principal loan amount, a factor rate is usually expressed as a decimal figure.

To calculate the total amount you will need to repay on a loan with a factor rate, you multiply the loan amount by the factor rate. For example, if you receive a $50,000 loan with a factor rate of 1.2, you would have to repay a total of $60,000 ($50,000 x 1.2).

If you’re in a bind and need a quick cash flow boost, some loans can provide you with cash in hand in as little as 24 hours after your application is approved. Having all of your application materials ready to go when applying can help speed the process along.

Yes, a startup business can potentially secure a short-term loan, although it can be more challenging than for established businesses due to the perceived risk. Lenders typically require a solid credit history, a detailed business plan, and sometimes personal collateral. Some lenders specialize in startup loans and may have more flexible criteria, but interest rates may be higher to offset the risk. It’s crucial for startups to carefully evaluate the terms of any loan and consider the impact on their business finances.

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