Best Short-term Business Loans in May 2024

Compare rates to find the best short-term loan option for your business

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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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Written by Tara Mastroeni | Edited by Kurt Adams and Janet Schaaf | May 1, 2024

OnDeck: Best short-term business loan for fast funding

ondeck logo

Loan amounts$5,000 to $250,000
Estimated starting APR27.30%*
Term lengthUp to 24 months
Min. credit score625
Min. time in businessOne year
Min. annual revenue$100,000

*This rate reflects the estimated starting APR offered to at least 5% of OnDeck customers. It doesn’t reflect the minimum APR offered by the company.

ProsCons

  Same-day funding available

  Prequalification available

  Higher minimum credit score requirement

  May charge an origination fee and/or maintenance fee

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American Express: Best short-term business line of credit

amex business line of credit logo

Loan amounts$2,000 to $250,000
Starting interest rate
  • 3% to 9% for 6-month loans
  • 6% to 18% for 12-month loans
  • 9% to 27% for 18-month loans
Term length6, 12 or 24 months
Min. credit score660
Min. time in businessOne year
Min. annual revenue$3,000/month

*This rate reflects the estimated starting APR offered to at least 5% of OnDeck customers. It doesn’t reflect the minimum APR offered by the company.

ProsCons

  Quick and easy application process

  Open to small businesses with as little as $3,000 in average monthly revenue

  Interest rate as high as 27% for 24-month loans

  Loan fees charged each month that you carry a balance

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Fundbox: Best short-term business loan for flexible repayment options

Fundbox logo

Loan amountsUp to $150,000
Starting interest rate
  • 4.66% for 12 weeks
  • 8.99% for 24 weeks
Term length12 or 24 weeks
Min. credit score600
Min. time in business6 months
Min. annual revenue$100,000

*This rate reflects the estimated starting APR offered to at least 5% of OnDeck customers. It doesn’t reflect the minimum APR offered by the company.

ProsCons

  Next-day funding available

  Option to access Flexpay, which gives you three extra days to pay without late fees

  Short time in business requirement

  Requires at least $100,000 in annual revenue

  Repayment terms are relatively short

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Fora Financial: Best short-term business loan for large loan amounts


Loan amounts$5,000 to $1,500,000
Estimated factor rate1.10 to 1.40
Term length4 to 18 months
Min. credit score570
Min. time in business6 months
Min. annual revenue$180,000

*This rate reflects the estimated starting APR offered to at least 5% of OnDeck customers. It doesn’t reflect the minimum APR offered by the company.

ProsCons

  Access up to $1,500,000 in funding

  Manageable minimum credit score and time in business requirements

  High annual revenue requirement ($180,000 per year)

  Charges an origination fee ($300 or 2.50% of the loan amount, whichever is greater)

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Credibly: Best short-term business loan for borrowers with bad credit


Loan amountsUp to $600,000
Starting factor rate1.11
Term length3 to 24 months
Min. credit score500
Min. time in business3 months
Min. annual revenue$180,000

*This rate reflects the estimated starting APR offered to at least 5% of OnDeck customers. It doesn’t reflect the minimum APR offered by the company.

ProsCons

  Low minimum credit score requirement

  Short minimum time in business requirement

  High annual revenue requirement ($180,000 per year)

  Charges an origination fee Charges an origination fee (2.50% of the loan amount)

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Bluevine: Best short-term business loans for high-revenue businesses


Loan amounts$250,000
Starting factor rate6.20% for 26-week term
Term length6 or 12 months
Min. credit score625
Min. time in business24 months
Min. annual revenue$480,000

*This rate reflects the estimated starting APR offered to at least 5% of OnDeck customers. It doesn’t reflect the minimum APR offered by the company.

ProsCons

  Competitive interest rate on 6-month loans

  Funding decision in as little as five minutes

  High annual revenue requirement ($40,000 per month)

  Higher minimum credit score requirement

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What is a short-term business loan?

A short-term business loan is a type of funding used to cover immediate business needs, like working capital expenses or other emergency costs.

Regardless of how they are used, short-term business loans are meant to be paid back over a short period of time. Short-term business loans typically have loan terms ranging from three to 24 months with daily or weekly payments.

This is unlike long-term business loans, which can usually be repaid in monthly installments over a period of up to ten years.

Types of short-term business loans

There are four distinct types of short-term business loans, including:

Business lines of credit

A business line of credit is typically a revolving, flexible form of business funding that only charges interest on the amount that you borrow. As the name suggests, a line of credit works similarly to a credit card, allowing you to borrow funds as you need them. Then, once you make a payment toward your balance, the line of credit is replenished and you can borrow from it again.

Business lines of credit can be secured with collateral or unsecured.

Small business term loans

Unlike a business line of credit, which lets you access funds as they’re needed, small business term loans work more like a traditional installment loan. With this type of financing scenario, you’ll receive the full loan amount in one lump sum and will be responsible for making regular repayments on that amount until it’s paid off in full.

Invoice factoring

At its core, invoice factoring is the process of selling your unpaid invoices to a factoring company in exchange for an advance payment. Traditionally, you submit an approved invoice to the factoring company and receive an advance of 70% to 90% of the amount due. Then, once the invoice is paid in full, the factoring company sends you the remaining percentage, minus any agreed-upon transaction fees.

Merchant cash advance

A merchant cash advance gives you a lump-sum payment as an advance against your future sales. Typically, this type of funding is repaid by giving the lender a pre-set percentage of your daily or weekly credit card sales. It can be a good way to access fast funding, but it is also considered to be an expensive form of borrowing.

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Short-term business loans: Pros and cons

ProsCons

  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.

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

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 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 business 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.

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.