Best Short-Term Business Loans in August 2023
Carissa Chesanek is a personal finance writer with several years of experience covering credit cards, personal loans and student loans. She holds a Master’s in Journalism and has covered finance topics in publications, including MagnifyMoney, LendingTree, StudentLoanHero, PSFK and The Points Guy. Follow her @Chesanek.
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Before joining LendingTree, Kurt spent a past life as an academic, studying U.S. history. He now brings that near-decade of teaching, writing and editing to help people better understand personal finance.
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Janet Schaaf is a freelance writer, editor and proofreader who considers reader advocacy to be her calling. After taking a few roads less traveled, Janet completed a bachelor’s degree in English Literature from the University of Missouri-Kansas City, with English Department Honors. She has been correcting grammar and checking facts since she could string a sentence together. For the past three years, Janet has focused on making personal finance topics understandable and relatable. Loan terms and credit card agreements can look overwhelming, but understanding what you’re agreeing to is paramount in grasping the impact debt can have on your life.
Small business owners who need fast funding to fill a cash flow gap or pay for an emergency expense might consider short-term business loans. Many lenders can be found online, and they may provide a simple application process. Once approved, funds can be accessed quickly — sometimes on the same day — but come with short repayment terms, typically three to 24 months.
Best short-term business loans
| Lender | User ratings | Best | Maximum loan amount | Terms | Time to funding |
|---|---|---|---|---|---|
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | Short-term business loan for small purchases | $250,000 | Up to 24 months | Same day |
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | Short-term business line of credit | $250,000 | 6, 12 or 18 months | Varies |
 |
User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | Short-term business loan for fast funding | $150,000 | 12 or 24 weeks | As soon as next business day |
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | Short-term business loan for startups | $1,500,000 | Up to 15 months | 72 hours |
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | Short-term business loan for bad credit | $400,000 | 3 to 15 months | Same day upon approval |
 | User ratings coming soon | Short-term business loan for high-revenue businesses | $250,000 | 6 or 12 months | A few hours (with $15 wire fee) or next business day with ACH transfer, which could take up to three days |
Learn more about how we chose our picks.
OnDeck: Best short-term business loan for small purchases
Pros:
Loan amounts can range from $5,000 to $250,000
Repayment terms are from 3 to 24 months
Cons:
At least 1 year in business to qualify
Minimum annual gross revenue of $100,000 for all businesses
OnDeck offers smaller loan amounts that start at $5,000, which makes it a great choice for small purchases. However, you’ll need to be in business for at least a year to qualify.
American Express Business Line of Credit: Best short-term business line of credit
| Term length | 6, 12 or 18 months |
| Max. loan amount | $250,000 |
| Starting interest | 3% to 9% for 6-month loans 6% to 18% for 12-month loans 9% to 27% for 18-month loans |
| Min. credit score | 660 |
| Min. time in business | One year |
Pros:
Quick and convenient application
Open to small businesses with as little as $3,000 in monthly revenue
Cons:
Fees up to 27% with 18-month terms
Not all term lengths available to all customers
Unlike a term loan, where you receive the money in a lump sum upfront, a business line of credit offers a revolving form of funding that you can borrow from when you need it. American Express Business Line of Credit wins as the best business line of credit for short-term business line of credit for its flexible repayment terms, low starting fees for 6-month loans and relatively lenient monthly revenue requirements.
Fundbox: Best short-term business loan for fast funding
| Term length | 12 or 24 weeks |
| Max. loan amount | $150,000 |
| Starting interest | 4.66% for 12 weeks 8.99% for 24 weeks |
| Min. credit score | 600 |
| Min. time in business | 3 months |
Pros:
Membership program offers extra benefits (in beta)
Offers a no-fee demand deposit account
Excellent customer service reviews on Trustpilot
Cons:
Relatively short repayment terms
Requires at least $100,000 in annual revenue
Fundbox offers a business line of credit with quick funding as soon as the next business day. Borrowers get access to Flex Pay, an account that gives you three extra days to pay your vendors. A paid membership option that offers lower fees is coming soon. What’s more, it’s easy to draw funds directly from the Fundbox app.
Fora Financial: Best short-term business loan for startup businesses
Pros:
Loan amounts up to $1,500,000
Early payoff discounts
Cons:
High minimum revenue required
No open bankruptcies in order to qualify
Fora Financial offers short repayment terms and large loan amounts to borrow, with only six months in business required to be eligible. But you’ll need consistent revenue to qualify.
Credibly: Best short-term business loan for bad credit
Pros:
Minimum credit score requirement of 500
Only six months in business is required
Cons:
One-time origination fee of 2.50% of total loan amount
Average monthly revenue of at least $15,000 is required (or $180,000 or more in annual revenue)
Credibly only requires a credit score of 500 to borrow funds. Still, interest rates can be on the higher side, and your business will need to produce high revenue in order to be eligible.
Bluevine: Best short-term business line of credit for high-revenue businesses
| Term length | 6 or 12 months |
| Max. loan amount | $250,000 |
| Starting rate | 6.20% simple interest |
| Min. credit score | 625 |
| Min. time in business | 24 months |
Pros:
No monthly maintenance fee
No prepayment so you can pay off your loan early without penalty
Cons:
Need at least $40,000 each month in revenue
Not eligible for businesses in Nev., N.D. or S.D.
Businesses looking for a Bluevine line of credit need to make at least $40,000 each month, making it a good option if you have high enough revenue. Bluevine can provide funds to borrowers within hours of approval which is ideal for those needing fast cash, but you’ll need to pay a $15 wire fee.
How short-term business loans work
Short-term business loans provide quick access to funds for filling cash flow gaps, working capital or emergency expenses within a business. They typically have repayment periods of three to 24 months, with payments made automatically on a daily or weekly basis. They’re funded quickly by online lenders, and a common time frame for this type of funding is anywhere from one to three business days.
Short-term small business loans are typically more lenient than long-term, traditional bank loans. With more relaxed eligibility requirements — such as lower credit scores, shorter times in business or lower annual revenue — short-term loans may be more accessible for new or small businesses. However, they can also come with higher interest rates.
Long-term business loans offered by traditional banks have longer repayment periods, usually three to 10 years. These loans also may have lower interest rates, but may require payments on a less frequent basis than short-term loans do. Long-term business loans can be used for growing a business over time or making a significant investment, like a remodel or a building expansion.
Common uses of short-term business loans
We’ve briefly covered why a business might use a short-term loan — for stop-gap or emergency funding — but let’s take a closer look at some specific reasons they can be used.
- Short-term loans can be used for covering upfront expenses. Businesses that do work for clients or customers before getting paid might need short-term funding to get started on a project. Short-term loans can offer the money to get started and can be repaid as a client begins to pay for the work.
- Unexpected or emergency expenses can be covered with short-term loans. Part of what makes short-term loans so appealing is that they’re usually funded quickly. This makes them ideal for small businesses looking for funding to cover unexpected emergency expenses.
- Using short-term loans to cover seasonal income gaps. For those businesses that have seasonal income, short-term loans can be used to help offset the off-season.
Short-term business loan interest rates
When deciding whether to take out a short-term business loan, it’s important to pay attention to the interest rate. The interest rates for short-term business loans generally range from around 7% to 50% or higher, depending on where the loan comes from. Because of the quick repayment term, rates for short-term business loans are sometimes higher than they might be for longer-term business loans.
In addition, some short-term lenders may charge a factor rate instead of an interest rate. While interest is a percentage of the remaining balance of the loan, a factor rate is expressed as a decimal figure. To calculate the full cost of your loan with the factor rate included, multiply your loan amount by the factor rate.
How to get a short-term loan
Follow these steps to get a short-term business loan:
1. Determine your borrowing needs.
Even before you apply for a short-term loan, ask yourself why you need the funds. What do you plan to use them for? Once you have a better idea of your needs you can then decide if a short-term loan is the best option for you. Short-term business loans usually need to be repaid in 24 months or less, so this option is best for day-to-day expenses or plugging temporary cash flow gaps.
2. Decide what capacity you have to take on debt.
Short-term business loans have various repayment terms, including daily, weekly or monthly, with different costs of borrowing. It’s important to determine what your business can afford by doing a cash flow analysis to understand how the money is moving within your business. Your cash flow statement will showcase your business income and expenses and can help determine how much more money you need to meet all of your financial obligations.
3. Evaluate your qualifications.
Once you decide what you can afford, you will also need to consider what you can qualify for and business loan requirements. Typically, lenders look at how long you’ve been in business (ranging from six months to a year if not more) and the annual revenue. Lenders will also look at the personal credit score of the business owner and business credit score when determining eligibility which can affect the rates offered to you. If you have lower credit scores, you still may be able to get a short-term business loan – just be prepared to pay higher business loan interest rates.
4. Compare lenders.
It’s always a good idea to compare lenders to help find the best rate and the least amount of fees for your small business short-term loans. Comparing lenders is easy and can be done simply by reading LendingTree reviews, visiting lenders’ websites or consulting with peers in your network or industry.
5. Submit an application.
Once you have found the lender you’d like to work with, you’ll need to apply for a business loan. Applications are usually done online, and lenders may ask for specific documents, such as a business plan that illustrates your product or service, along with your personal and business tax returns and a balance sheet that depicts all assets as part of the application process.
Tips to compare short-term business loan lenders
Finding the best small business loan for your business will depend on your funding needs. Before you decide on which short-term business loan is right for you, ask yourself the following questions:
1. How fast do you need the funds?
Consider how quickly you’ll need the money in your account. If it’s an emergency, some short-term business lenders offer funding as fast as the same day for eligible businesses, but if you can wait a few days, you’ll have a wider variety of options when it comes to online lenders. If you’re not in a rush, you might also consider an SBA loan. These loans can be easier to qualify for and come with competitive rates and terms.
2. What fees does the lender charge?
When comparing short-term business loans, look for lenders with a transparent fee structure that charge minimal fees, and stay away from lenders that charge prepayment penalties. Consider interest rates as well as origination fees and maintenance fees.
3. What is the repayment schedule? How long is the term?
Short-term business loans are meant to be just that — funding for short periods of time. So take a close look at how soon you’ll need to begin repayment and how many months you’ll have to pay off the loan in full. Calculate the monthly payment you can afford to determine the loan term you need.
4. How do you want to receive the funds?
Do you want to be able to get the funds with a same-day wire transfer, receive the funds through an ACH transfer to your business bank account or access the funds directly through Stripe? Different lenders offer different options, so consider what will best fit your needs.
5. Do they require collateral or a personal guarantee?
Many online lenders do not require collateral, but some do. If you’re required to provide collateral for the short-term business loan, you’ll risk losing that asset if you default. Additionally, most business lenders require a personal guarantee, but it’s possible to find short-term business loans that don’t. Consider whether you want to be personally responsible for repaying the loan if your business fails. While you should only apply for a loan that you feel confident you can repay, it’s important to understand what will happen in the event of default.
Short-term business loans: Pros and cons
| Pros | Cons |
|---|---|
Funding for short-term business loans are typically quick, meaning you could have the cash within a few business days after applying. Online lenders offering short-term loans tend to have an easy application process. Repaying your loan on time or ahead of schedule could help boost your credit, but be sure to check that there are no prepayment penalty fees. | Online lenders offering short-term business loans tend to have higher interest rates and fees. Short-term loans require quick repayment timelines with either daily or weekly payments. You’ll likely have to start making payments within the following day or week after taking on the loan. |
When to avoid short-term business loans
Short-term business loans can be helpful when you need a quick injection of cash during an emergency, but there are some situations when a short-term business loan may not be the best solution. Here are some times when you’d want to consider other options:
- The expense is small and manageable within one month: For small expenses that you can afford to pay within the grace period, a business credit card may be a better solution. Some credit cards even offer 0% APR for an introductory period of 12 to 18 months for new account holders, so you can pay off the expense over that timeframe without worrying about accruing interest.
- You qualify for more favorable options: Check to see if you qualify for a small business grant or disaster assistance before turning to a short-term business loan, assuming you don’t need the funds immediately.
- The expense isn’t an emergency: If you don’t need the money urgently, you’ll have more options, such as an SBA-backed loan. You may also want to explore other ways of raising capital without borrowing.
- You want to buy equipment or real estate: Because of the high costs of equipment and commercial real estate, these expenses are well suited for a secured loan with a longer term. Loans specifically designed for purchasing equipment or property tend to come with lower rates than unsecured business loans because the equipment or property being purchased acts as collateral to back the loan.
- You need a longer time to pay off the loan: A shorter term means higher monthly payments, which may impede cash flow. If you need to spread payments out over a longer period in order to keep up with your other business expenses, you should avoid a short-term business loan.
- The loan would be too costly or put you at risk of default: Loans with balloon payments due at the end of the term or sky-high APRs can be risky. If your business is already struggling or the borrowing cost will be unaffordable, you should avoid short-term business loans.
How we chose our picks
To appear on our list of best short-term business loans, lenders had to meet the following criteria:
- Loan amounts as low as $6,000
- Minimum credit score requirement of 700 or below
- Maximum repayment terms of 24 months or less
- Funds available within 3 business days or less
Frequently asked questions
Small businesses might consider a short-term loan if you are looking for an emergency business loan, short-term funding to cover an unexpected expense or to help expand your business. Short-term business loans can also be more lenient in qualification requirements, which could be good if you have with poor or limited credit.
Short-term business loans usually provide fast funding. The exact time frame to receive your funds will depend on the lender. Some will provide funding the same day you’re approved, while others send the funds within 72 hours upon approval.
You might be able to get a bad credit business loan. Some lenders don’t weigh credit that heavily and instead prefer to see strong cash flow. However, those with low credit scores are likely to receive higher interest rates than those with excellent credit. In addition, keep in mind that taking on more debt you can’t afford can negatively impact your credit score further.
Short-term business loans do indeed come with short repayment loans. The exact repayment term will ultimately depend on the lender, with Fundbox offering terms for as short as 12 to 24 weeks.
Generally, short-term lenders consider time in business, but that doesn’t mean brand new businesses won’t qualify for short-term loans. There are some lenders that offer short-term loans to startup businesses that have been operating for only a year or less. However, high-interest rates are likely to come with these loans, and the repayment terms aren’t always flexible.