Which financing is best for short-term business needs?

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.

What are the risks of short-term business loans?

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.

Can short-term loans help me build business credit?

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.