Short-term business loans typically have terms of three years or fewer — and can be a good choice when you need fast cash to keep your business running smoothly. Short-term loans include term loans, lines of credit, merchant cash advances, invoice factoring, equipment loans and more. Here’s a closer look at the best short-term business loans by category.
Lendio is a popular business loans marketplace with 75+ partners that cater to a range of credit scores. At Lendio, you can compare a wide range of short-term loans with a single application, including bad credit loans, term loans, lines of credit, merchant cash advances, invoice financing, equipment loans and credit cards.
Customers like Lendio for its fast, streamlined application process and knowledgeable loan officers who can answer your questions and help you narrow down the best loan for your needs. And it's known to be fast: You could receive your funds within 24 hours of approval, depending on the loan type.
Loan amount
$1,000 – $5,000,000
APR
Varies by lender
Min. Credit Score
580
Lendio is a popular business loans marketplace with 75+ partners that cater to a range of credit scores. At Lendio, you can compare a wide range of short-term loans with a single application, including bad credit loans, term loans, lines of credit, merchant cash advances, invoice financing, equipment loans and credit cards.
Customers like Lendio for its fast, streamlined application process and knowledgeable loan officers who can answer your questions and help you narrow down the best loan for your needs. And it's known to be fast: You could receive your funds within 24 hours of approval, depending on the loan type.
Pros
Options for bad credit
Competitive rates
Wide range of financing options
Cons
Not a direct lender
APRs can run high on some short-term loans
Marketing may continue after being funded
Loan amount
$1,000 – $5,000,000
APR
Varies by lender
Min. Credit Score
580
Loan term
3 months to 25 years
Requirements
Operate business in US for 6 months or more, have a business bank account, minimum 580 personal credit score, at least $8,000 in monthly revenue.
Pinnacle Funding has a revolving line of credit (LOC) up to $150,000. It offers instant approval and same-day funding, and there's no collateral required. It also has lenient credit and time-in-business requirements, making it a good option for startups or those with poor credit. But it doesn't disclose its rates and fees, and its annual revenue requirement is on the high side.
Loan amount
$5,000 to $150,000
APR
Undisclosed
Min. Credit Score
525
Pinnacle Funding has a revolving line of credit (LOC) up to $150,000. It offers instant approval and same-day funding, and there's no collateral required. It also has lenient credit and time-in-business requirements, making it a good option for startups or those with poor credit. But it doesn't disclose its rates and fees, and its annual revenue requirement is on the high side.
Pros
Same-day funding possible
Only 525 credit score required
No collateral required
Cons
Doesn't disclose rates and fees
Relatively high revenue requirement
Loan amount
$5,000 to $150,000
APR
Undisclosed
Min. Credit Score
525
Loan term
6 to 24 months
Requirements
6+ months in business, $180,000 in annual revenue, 525 credit score
FundThrough provides advances up to 100% of your unpaid invoices, which is more than most factoring companies that may only offer up to 80% or 90%. It integrates with your accounting system for a seamless process, and there's no required minimum funding amount after your first invoice.
But this is generally an expensive form of funding and not suitable for all businesses. Plus, you may have to upload invoices manually if your accounting software doesn't integrate.
Loan Amount
Up to $10 million
Fee for Terms
2.2% to 3% per 30 days
FundThrough provides advances up to 100% of your unpaid invoices, which is more than most factoring companies that may only offer up to 80% or 90%. It integrates with your accounting system for a seamless process, and there's no required minimum funding amount after your first invoice.
But this is generally an expensive form of funding and not suitable for all businesses. Plus, you may have to upload invoices manually if your accounting software doesn't integrate.
Pros
Advances up to 100% of unpaid invoices
Fully automated process
Accepts poor credit
Cons
Have to invoice other businesses or government agencies
More expensive than traditional financing
Doesn't integrate with all systems
Loan Amount
Up to $10 million
Fee for Terms
2.2% to 3% per 30 days
Min. Credit Score
500
Loan Term
1 to 3 months
Requirements
Outstanding invoices to one creditworthy customer, invoices other businesses or government agencies, invoices for completed work, no construction or real estate
OnDeck is a highly rated short-term business loan provider that offers term loans and business lines of credit. Customers love OnDeck for its fast and streamlined application process, and funding is possible as soon as the same day. But it's not the cheapest option. OnDeck's average rates are around 56% for both its term loans and lines of credit. And term loans typically require an origination fee.
Loan amount
$5,000 – $400,000
APR
Average is 56.4% to 56.6%.
Min. Credit Score
625
OnDeck is a highly rated short-term business loan provider that offers term loans and business lines of credit. Customers love OnDeck for its fast and streamlined application process, and funding is possible as soon as the same day. But it's not the cheapest option. OnDeck's average rates are around 56% for both its term loans and lines of credit. And term loans typically require an origination fee.
Pros
Low-doc application
Same-day funding possible
No annual, prepayment or draw fees
Cons
Potentially high APRs
May charge origination fees
May require weekly repayments
Loan amount
$5,000 – $400,000
APR
Average is 56.4% to 56.6%.
Min. Credit Score
625
Loan term
3 to 24 months
Requirements
Companies in business at least 1 year, $100,000+ in gross annual revenue, majority owner with a 625+ personal credit score, active business checking account
Merchant cash advances (MCAs) are a type of short-term financing you repay out of your future credit card and debit sales. Credibly merchant cash advances offer up to $600,000 with factor rates starting as low as 1.11 — some of the lowest in the industry. Due to its relaxed eligibility requirements, it's best for newer businesses or those with a low credit score.
To qualify, you just need a minimum credit score of 500 and three months in business. But you must have at least $15,000 monthly in average bank deposits. Customers give the company excellent ratings, but be aware that MCAs are typically one of the most expensive forms of financing.
Loan amount
$5,000 to $600,000
Starting Factor Rate
1.11
Min. Credit Score
500
Merchant cash advances (MCAs) are a type of short-term financing you repay out of your future credit card and debit sales. Credibly merchant cash advances offer up to $600,000 with factor rates starting as low as 1.11 — some of the lowest in the industry. Due to its relaxed eligibility requirements, it's best for newer businesses or those with a low credit score.
To qualify, you just need a minimum credit score of 500 and three months in business. But you must have at least $15,000 monthly in average bank deposits. Customers give the company excellent ratings, but be aware that MCAs are typically one of the most expensive forms of financing.
Pros
Quick source of working capital
Relaxed eligibility requirements
Good for startups
Cons
Requires $15,000+ in monthly revenue
Daily or weekly repayments
More expensive than most business financing
Loan amount
$5,000 to $600,000
Cost:
As low as 1.11
Min. Credit Score
500
Loan Term
3 to 24 months
Requirements
500+ credit score, 6+ months in business, $15,000+ average monthly bank deposits
National Funding is a highly rated direct lender that offers new and used equipment financing and leasing up to $150,000. Unlike some lenders, it offers 100% funding on equipment with $0 down and can provide funding in as little as 24 hours. It also has a lowest lease payment guarantee — if you find a lower payment elsewhere, you'll get $1,000 in cash.
But it doesn't disclose rates and fees on its website, and its maximum loan amount for equipment financing is lower than some competitors.
Loan amount
$5,000 to $150,000
APR
Not stated
Min. Credit Score
600
National Funding is a highly rated direct lender that offers new and used equipment financing and leasing up to $150,000. Unlike some lenders, it offers 100% funding on equipment with $0 down and can provide funding in as little as 24 hours. It also has a lowest lease payment guarantee — if you find a lower payment elsewhere, you'll get $1,000 in cash.
But it doesn't disclose rates and fees on its website, and its maximum loan amount for equipment financing is lower than some competitors.
Pros
Competitive rates
Quick turnaround funding
No down payment required
Cons
Origination fee may apply
Low maximum loan amount
Rates not advertised
Loan amount
$5,000 to $150,000
APR
Not stated
Min. Credit Score
600
Loan term
24 to 60 months
Requirements
In business 6+ months and make at least $250,000 in annual sales, fair to excellent credit, equipment quote from vendor
A CRE loan is a commercial loan secured by real estate. Unlike most lenders, Biz2Credit offers a short-term CRE loan of up to $6,000,000 with terms starting at just five years. It also offers an interest-only payment option for up to three years.
But to qualify, you must be a commercial real estate holder with equity, and the minimum loan amount is relatively high. Approval times can also take longer for this type of loan, but it could be a good choice for a larger loan you intend to pay off within a few years.
Loan amount
$250,000 – $6,000,000
APR
Not disclosed
Min. Credit Score
650
A CRE loan is a commercial loan secured by real estate. Unlike most lenders, Biz2Credit offers a short-term CRE loan of up to $6,000,000 with terms starting at just five years. It also offers an interest-only payment option for up to three years.
But to qualify, you must be a commercial real estate holder with equity, and the minimum loan amount is relatively high. Approval times can also take longer for this type of loan, but it could be a good choice for a larger loan you intend to pay off within a few years.
Pros
Short-term CRE loans up to $6 million
Interest-only payments option
Loan terms from 5 to 20 years
Cons
High minimum loan amount
Must own commercial real estate with equity
Longer funding times than other financing
Loan amount
$250,000 – $6,000,000
APR
Not disclosed
Min. Credit Score
650
Loan term
12 to 20 years
Requirements
6+ months in business; $100,000+ annual revenue; 650+ credit score
Our lending experts analyze dozens of business loan providers to narrow down the best short-term options for business owners. We weigh lenders against 12 key metrics:
Application process
Credit score minimums
Customer service reviews
Eligibility requirements
Extra features
Fees
Funding turnaround times
Lender reputation
Minimum and maximum loan amounts
Products offered
Rates
Willingness to work with risky industries
We also search for lenders that cater to a range of needs, including those that work with bad credit and newer business owners.
How to compare short-term business loans
Here are the top things to keep in mind when comparing online business loans:
Repayment terms. Each loan type has its own set of loan repayment terms. While term loans usually have monthly payments, merchant cash advances might require weekly or even daily payments. Make sure you understand how your loan’s repayments work to avoid a cash crunch.
APRs. APRs on short-term business loans can range from 6% to 80%+ — and depend on the loan type, your credit score, revenue and time in business. Compare multiple quotes for the same loan type to make sure you’re paying a reasonable APR.
Origination fees. Depending on the lender and your credit score, you may be charged an origination fee up to 10% of the loan’s value. However, not all lenders charge these, and you may not have to pay them if you have good to excellent credit.
Other fees. Ask about any additional fees you may be responsible for, including prepayment penalties, late fees and ongoing administrative fees. Not all lenders charge these, but some do.
Customer support options. Many lenders have experienced loan officers who can answer your questions and walk you through your loan options. You may qualify for loans you didn’t know about, but could still work well for your situation.
Digital experience. Most lenders on this list offer a fast, streamlined digital application. But if having a mobile app to help manage your loan and repayments is important to you, be sure to check the app’s reviews on Google Play or the App Store.
Customer reviews. Customer reviews on sites like Trustpilot and the Better Business Bureau (BBB) website are a great place to research previous customers’ experiences with a particular lender.
How short-term business loans work
Short-term business loans typically come as either a lump sum, where interest starts as soon as the money hits your account, or a line of credit, where you only pay interest on what you borrow. Terms are usually three years or less, and repayment can be monthly, weekly or even daily depending on the lender. Payments are higher than with long-term financing, but you usually pay less total interest.
Short-term loans work best for immediate business needs like covering cash flow gaps or funding quick opportunities. If you’re financing a long-term investment and want a longer repayment schedule of up to 25 years, a long-term business loan, such as an SBA loan, may be a better fit.
Quick highlights:
Lump sum or line of credit options
Terms under 3 years
More frequent payments with less total interest
Good for short-term needs, not long-term projects
Pros and cons of short-term business loans
Pros
Many loan options available
Can help smooth over cash flow during slow periods
Can be used to take advantage of quick business opportunities
Provides working capital for a range of needs
Cons
Some loans may have high APRs
Frequent repayments may be required
Repayments higher than with a long-term loan
Balloon payment may be required at the term's end
Compare other short-term business loans
Use our table to compare lenders, and then select Learn more to visit the lender’s site or More info to read our review.
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How we picked these
What is the Finder Score?
The Finder Score crunches 12+ types of business loans across 35+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
To provide a Score, we compare like-for-like loans. So if you're comparing the best business loans for startups loans, you can see how each business loan stacks up against other business loans with the same borrower type, rate type and repayment type.
Businesses that need equipment and don’t want to tie up cash and other loans
In addition to these short-term loan options, business credit cards can be a great way to track business expenses and earn rewards while you increase your working capital for ongoing expenses.
Short-term vs. long-term business loans
Short-term business loans tend to offer lower amounts and shorter repayment terms than long-term loans. Here are more key differences:
Exact requirements depend on the lender and loan type, but this is the minimum basic criteria most lenders look for.
Here are the general steps:
At least $10,000 monthly revenue
In business for six months or more
Credit score requirements can vary widely, with lenders on this list ranging from 525 to 650. Or some options, like MCAs and invoice factoring, may not even consider your credit score.
How to apply for a short-term business loan
Applying for a short-term business loan typically follows these five steps:
Determine the financing you need. Short-term business loans come in many forms. Choosing the right option ensures you have enough cash, in the right form, when you need it. Talk to a loan officer if you need guidance in picking the right loan.
Check your eligibility. This step involves checking your personal and business credit scores, tallying your revenue, verifying your time in business and determining if you have any collateral to pledge if you choose a secured loan.
Gather your documentation. Required documents typically include bank statements, tax returns, financial statements and other documents. You may also need to provide a business plan and personal guarantee if you’re a newer business owner.
Complete the application. Fill out the full application and upload the required documents or link to your financial accounts. Be sure to review the application for accuracy before submitting to avoid processing delays.
Wait for approval and funding. Online lenders tend to have fast approval and funding times — which means if you’re approved, you could have a decision same-day and funds in 72 hours or less.
Short-term business loans are available from online lenders, banks and credit unions.
Banks and credit unions. You may be able to secure a lower rate with a bank or credit union if you’re an established business and have good personal credit.
Online lenders. Online lenders stand out for a few reasons:
Higher approval rates. Online lenders rely on technology to assess your business’ overall financial health — not just your credit score — and are usually willing to work with lower-credit borrowers and newer businesses.
Quick processing time. Because they rely heavily on technology to make underwriting decisions, same-day approval and next-business-day funding are common with online lenders.
A wide range of loan types. Online lenders are known for their wide selection of short-term loan types to suit a range of financing needs. A bank may only have a couple of options, like term loans or LOCs.
What should I do if I was denied a business loan?
If you’ve been denied a business loan, here are three steps you can take to potentially correct the situation:
Ask the lender why they said no. Call the lender to discuss your application and ask why it was turned down. You may be able to correct the problems and resubmit the application.
Take corrective action. Once you know the reason, try to rectify the situation. For example, there may have been missing or inaccurate information on your application, or your credit score might have been stronger before you applied.
Prepare a new application. When you’re in a position to reapply, try applying with the same lender or consider an alternative form of financing where you’re more likely to get approved.
It’s often easier to get approved for a secured loan backed by business assets. You could also apply for a personal loan.
Alternatives to a short-term loan
Not ready to take out a short-term business loan? Consider these alternatives:
Personal loan. Some lenders let you use a personal loan for business expenses. Personal loans aren’t dependent on your business’ financials or time in business, making them ideal for new business owners.
Business credit card. For small cash flow needs, consider a business credit card. They help boost your business credit score while you earn perks like points or cash back on your business expenses.
Grants. Business grants are free money through federal and state government agencies, as well as private corporations. But grants are competitive, and if you get chosen, the money could take months to receive.
Investor financing. If you’re an entrepreneur, money from an angel investor can give you the cash you need to get your business started — but you must give up equity in your company in return.
Crowdfunding. Crowdfunding is a popular marketing tool and a good way to judge interest in your product or service and gain potential customers while you drum up funding for your business.
Home equity financing. If you’re a homeowner with at least 20% equity, you could use a home equity loan or home equity line of credit (HELOC) to fund your business. But keep in mind, this option puts your house at risk if you can’t make the payments.
Frequently asked questions
The best type of financing depends on why you need the money. For example, if you're making renovations and aren't sure how much it'll cost, a business line of credit may give you the flexibility you need. Or if you need to replace old machinery, an equipment loan might be a better move.
Many short-term business loans require more frequent repayments than long-term loans, such as daily or weekly repayments, which can make it easier to fall behind and miss a payment. Shorter terms also typically mean larger payments, and some options also have higher rates than longer-term business loans.
Sometimes. Providers that offer MCAs or invoice factoring, for instance, typically don't report your payments, so they won't help you build credit. But if you get a term loan, line of credit or equipment financing, your payment history is reported and will help you build credit.
Kat Aoki was a personal finance writer at Finder, specializing in consumer and business lending. She’s written thousands of articles to help consumers make better decisions on their home loans, bank accounts, credit cards, cryptocurrency and more. Kat is well versed in working with leading brands in the real estate, mortgage and personal finance industries, and her expertise has been featured on Lifewire and financial comparison sites like iSelect and realestate.com.au. She holds a BS in business administration from California State University, Sacramento and enjoys hiking and yoga in her spare time.
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