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Short Term Loan

Short term business loans are designed to help meet short term financing needs. They can be a flexible option for business owners to better manage cash flow, deal with unexpected events, or help take advantage of a great deal. These types of business loans have set repayment terms, fixed interest rates, and a principal value.

Quick facts and Requirements

Loan Amount

$2,500-500,000

Loan Term

1-3 Years

Payment Frequency

Daily, Weekly, or Bi-Monthly

Interest Rate

8% - 13%

Time to Funds

1 - 4 weeks

Benefits & Drawbacks

Great for short term expansion projects
Improve your credit with fixed rates
Flexible options for a variety of business purposes
Some loans may require collateral
You may need to provide personal and business tax returns
You will need to provide P&L statements and balance sheets

What is a Short Term Loan?

These types of loans are sort of like a “normal” business loan. Generally, these loans provide a fixed payment over 1 to 5 years and are normally backed by collateral such as a car or another tangible asset. They can also be used for a wide range of business purposes.

Qualifying

Typically, most small businesses can qualify for a short term loan, given they have past experience in the related field. Business owners will need to provide tax information and basic loan applications. The interest rate and loan amount will depend on your business revenues, history, and credit score.Free Business Loan Tools
  1. What type of business loan is best for me?
  2. What business loans do I qualify for?

What Types of Businesses is it Good For?

Term loans are forms of debt financing. Business owners can use them to meet short-term financing needs like managing cash flow, new business opportunities, or working capital. These types of loans are provided by both traditional and non-traditional lenders. Any business that has been in operation for more than two years with good credit can utilize a short term loan.

What are the Minimum Requirements?

Generally, most lenders will consider your credit score, time in business, and possible collateral to determine whether or not the small business owner will be able to get the loan. It is in the best interest of the business owner to have excellent credit, bulletproof P&L statements, and a record of its bank statements.

How Much Will a Short Term Loan Cost?

Loan Calculator Term loan rates range from six to thirteen percent. Typically, these loans have fixed interest rates or fees and fixed monthly payments. This structure provides the same payments over the life of the loan and you will know exactly when the loan will be paid off

More Reading

The World of Small Business LoansBusiness Loan Calculators

Why use Lendio?

Lendio's mission is to empower your business by making small busienss loans simple through options, speed, and trust. Whether you are looking for an acquisition loan or a term loan, Lendio offers hundreds of different loan products from a variety of lenders. Finding out which business loan is best for you is why we're here.