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.