A short-term loan for small businesses is a form of financing that must be repaid within three to 18 months. Business owners may use short-term loans to cover cash flow gaps or emergency expenses. Short-term loan amounts could range from $5,000 to $500,000, or more.
Short-term loans typically require repayment on a daily or weekly schedule, which is faster than the monthly repayment schedule that usually accompanies a long-term loan. Shorter terms often result in higher interest rates and fees, especially if you borrow from an online business lender. These lenders offer fast turnaround times on funding, but you may pay for that convenience with a high rate.