Short-Term Business Loans:
What You Need to Know

Find Your Lowest Rate on Short-Term Business Loans up to $500,000

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Short-term business loans may provide fast funding to entrepreneurs who need money to cover an unforeseen expense or dip in cash flow. Repayment is quick, too, typically three to 18 months for amounts between $5,000 and $500,000.

Alternative, online business lenders are a common source of short-term business funding. Once you are approved, they can fund a loan within a few days, even hours, with options for borrowers who have good or poor credit.


Where to find short-term business loans

To help you in your search for a short-term business loan, we’ve rounded up several online short-term lenders that may offer a solution to your needs.

Loan Amount

Terms

Time to funding after approval

Minimum requirements

Rates

OnDeck$5,000 to $250,000Up to 18 monthsAs soon as the same day• 1 year in business
• $100,000 annual revenue
• 600 credit score
As low as 14.99%
Fora Financial$5,000 to $500,000Up to 15 monthsAs few as 72 hours• 6 months in business
• $12,000 in monthly sales
• Personal credit score not specified
Factor rates between 1.1 and 1.3
CrediblyUp to $400,0006 to 18 monthsAs soon as the same day• 6 months in business
• $15,000 in average monthly bank deposits
• 500 personal credit score
Factor rates as low as 1.15
Balboa Capital$5,000 to $250,0003 to 18 monthsNot specified• 1 year in business
• $300,000 in annual revenue
• Decent personal credit score
Factor rates not publicly disclosed

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ondeck logo

After approval, OnDeck may disburse funds as soon as the same day. Business owners must have one year in business, a minimum credit score of 600 and annual revenue of at least $100,000 to be eligible for a short-term loan. Rates may start as low as 14.99% APR.

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Loan amount:
$5,000 to $250,000

Terms:
Up to 18 months

Fora Financial may issue short-term loans in as few as 72 hours after approval. To be eligible, your business needs at least six months in operation and $12,000 in monthly sales. Fora Financial does not specify a required personal credit score. Factor rates are between 1.1 and 1.3.

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Loan amount:
$5,000 to $500,000

Terms:
Up to 15 months

Approved borrowers may receive funds the same day they are approved. Credibly requires six months in business, at least $15,000 in average monthly bank deposits and personal credit score of at least 500. Factor rates start at 1.15.

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Loan amount:
Up to $400,000

Terms:
6 to 18 months

Balboa Capital

Balboa Capital doesn’t specify time to funding after approval, but the lender does say that you could qualify within an hour of applying. Business owners must have at least one year in operation, $300,000 in annual revenue and a decent personal credit score. Balboa does not publicly disclose its factor rates.

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Loan amount:
$5,000 to $250,000

Terms:
3 to 18 months

How short-term business loans work

Business owners typically receive funds from an online lender in one to seven days from the time they’re approved. Approvals are usually quick: You can often apply for online business financing and get approved the same day.

Once funds are deposited in your account, a lender may collect daily, weekly or semimonthly repayments, depending on your specific loan agreement. This is faster than traditional loans, so short-term loans are best for businesses which can repay them relatively quickly. Some borrowers prefer frequent, smaller payments over years-long loan terms, but this type of fast repayment could impact your business’s cash flow.

Common uses of short-term business loans include:

  • Startup expenses
  • Seasonal decreases or changes in accounts receivable and payable
  • Operational costs during a limited time period
  • Sudden cash flow gaps

The eligibility requirements for short-term loans are typically more lenient than for other loans, such as long-term loans. You may be able to find short-term loans online for bad-credit applicants, or those who otherwise don’t qualify for traditional business financing.

Short-term loan interest rates

Short-term loan interest rates are often higher than rates for loans with longer repayment terms. Because the repayment window is short and credit requirements are often low, lenders bear greater risk. They may charge high rates to compensate for the increased chance of not being repaid. Short-term loan APRs could range from 8% on the low end to as much as 99%, depending on factors such as lender and loan type.

Lenders may also use various types of interest rates for short-term business loans, such as annual interest rates, factor rates or advance rates. These rates can affect the total amount you owe to the lender. Make sure you understand the total cost of capital when considering a short-term business loan.

Estimate your costs

You could use a short-term loan calculator to estimate how much you may be able to borrow. Although, you would not know the exact interest rate you’d get until after applying for a loan, and that could affect the overall amount you feel comfortable borrowing.

  • APRs between 8% and 99%
  • Interest rate types vary.

How to get a short-term business loan

You can usually apply online for a short-term loan from an alternative business lender. The online application may ask for details such as your business name, annual sales and the amount of money you’re seeking.

From there, the lender may choose to review various aspects of your business or financial documents.

Information lenders may request:

  • Personal and business credit history
  • Time in business and operating history
  • Industry
  • Financial statements such as cash flow projections, profit and loss statements, and balance sheets
  • At least one year’s worth of personal or business tax returns
  • Recent bank statements

Generally, you’d qualify for a short-term business loan if you meet the lender’s revenue, credit score and time in business requirements. Because eligibility requirements are typically relaxed for short-term loans, the funding timeline is usually fast, making these loans an attractive option for business owners facing an immediate cash crunch. However, if your credit score is below 600, you may be better off seeking a specific bad credit business loan.

Short-term business loans: Pros and cons

Pros
  • Easy online applications available
  • Fast approval process with online lenders
  • Eligibility requirements are typically lenient
Cons
  • Interest rates may be higher for short-term loans than long-term loans
  • Fast repayment schedule, such as daily or weekly payments, may be difficult to maintain
  • Loan amounts are generally smaller than they would be with longer-term loans

Short-term business loans FAQs

Short-term business loans are a financing option for business owners looking to quickly borrow and repay funds. Borrowers typically repay short-term loans within three to 18 months. These loans often have lenient eligibility requirements but higher interest rates than you would see with long-term loans.

Short-term business loans from online lenders are typically issued to approved business owners within one to seven business days. Lenders then collect repayment on a daily, weekly or semimonthly schedule. The debt should be repaid in full within three to 18 months.

Business owners can use a short-term loan for a range of general expenses. Common uses for a short-term business loan include purchasing inventory or equipment, hiring employees, launching marketing campaigns, or simply covering gaps in regular cash flow.