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Best short-term business loans

Top business financing options for quick cashflow fixes.

Short-term business loans are a type of small business financing designed to cover cashflow gaps. A short repayment term is usually no longer than 18 months and lenders typically require a weekly instead of monthly payments.

Short-term loans are often easier to qualify for than a bank loan, but come with a high cost — rates can top 100% APR. That's why we selected these providers with emergency expenses in mind. After reviewing over 220 business loan providers, we prioritized lenders with simple applications and a fast turnaround time. We also consider factors like rates, loan amounts and customer reviews when choosing these providers.

7 best short-term business loans

Best for business term loans: OnDeck

OnDeck short-term loans


Finder rating 4.6 / 5
★★★★★

Go to site

on OnDeck Capital's secure site

OnDeck is an online lender that specializes in short-term business loans and lines of credit. Small business owners can receive funds the same day they close their loan — faster than most online lenders. It also reports to business credit bureaus to build your credit score and it doesn't charge penalties for early repayment. But like most short-term loans, it can be a lot more expensive than a traditional bank loan: It's nearly tripled its APRs since March 2020. Also like most short-term loans, this option is best for cashflow emergencies.

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Best for lines of credit: BlueVine

BlueVine business lines of credit


Finder rating 4.5 / 5
★★★★★

BlueVine is an online lender that offers lines of credit where each withdrawal turns into a short-term loan. With rates starting at a low 4.8%, it can be a good option for new small businesses that need regular access to short-term financing. And it accepts business owners with a personal credit scores a low as 600 — though expect higher rates. While there's an option to receive your funds the same day you make a withdrawal — for a $15 fee. Otherwise it can take around 24 hours. You'll also have to withdraw at least $5,000 the first time you use the credit line.

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Best for low rates: Funding Circle

Funding Circle business loans


Finder rating 4.4 / 5
★★★★★

Funding Circle is one of the few peer-to-peer platforms that specializes in small business loans with terms as short as 3 for some products. With rates from , it's one of the least-expensive short-term financing providers available to small businesses. But startups and borrowers with a personal credit score below 660 should skip this one. You need good credit and at least two years in business to qualify. Since it's a P2P platform, its loans also come with a high origination fee compared to direct lenders.

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Best for invoice financing: FundThrough

FundThrough Invoice Factoring and Financing


Finder rating 4.5 / 5
★★★★★

FundThrough is online financing company that specializes in invoice financing and factoring for business-to-business (B2B) firms. Advances range from $500 to $10,000,000 — up to 100% of your eligible invoice's value. And unlike traditional factors, FundThrough offers a fully automated application and doesn't require you to sign up for a long-term contract. But you may need to use a specific type of software to qualify. And the financing fees of 2.5% to 6%, aren't the lowest available from a factoring company.

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Best for merchant cash advances: Credibly

Credibly business loans


Finder rating 3.8 / 5
★★★★★

Go to site

on Credibly's secure site

This online direct lender offers short-term financing, with options for bad credit and as little as six months in business. Its merchant cash advances are one of the least-expensive out there, with factor rates starting at 1.15. And it's more transparent about fees and requirements than most short-term loan providers. But it's still expensive — even compared to a short-term loan — so it's best to save this option when you can't qualify for other types of business financing.

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Best for no-paperwork financing: Fundbox

Fundbox lines of credit


Finder rating 4.2 / 5
★★★★★

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on Fundbox's secure site

Fundbox has one of the simplest business loan applications out there. Instead of asking small business owners to upload financial statements and other documents, it simply connects to your business accounting software. This means it only takes minutes to get approved — and you can qualify with fair credit and just six months in business. Its low credit limits may be a particularly good option for small, one-off expenses. But it's not cheap. The weekly fee of Starting at 4.66% per week works out to APR close to 35% — or higher.

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Best for startups: Kiva

Kiva business loans


Finder rating 3.7 / 5
★★★★★

Kiva is a nonprofit microlender that offers no-cost short-term loans to small businesses. Because it relies on donations from investors to fund the loan, it's one of the few providers with no credit score or time in business requirements. But it can be time-consuming — it takes around 45 days from start to finish, and you'll need to raise donations from at least five members of your social circle to get approved.

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5 types of short-term business loans

There’s no one-size-fits-all short-term business loan. The loan type that works best for you depends on your business’s immediate needs and how it operates. Have a lot of outstanding invoices? Invoice factoring might be what you’re looking for. Just need to cover a small one-time expense? A business term loan might be best.

Here are five common types of short-term business loans to consider and how they compare.

Business term loan

Any business with a one-time expense

$2,000 to $250,000

As fast as one day

Starting at 10% APR

  • 580+ credit score
  • 6+ months in business
  • $10,000+ monthly revenue

Invoice factoring

Businesses that rely on accounts receivable and don’t mind turning over their billing relationship with customers to someone else

80% to 95% of the value of your invoices

As fast as one day

Factor fee between 0.2% and 5% each week your client takes to pay their invoice

  • 6+ months in business
  • $50,000+ annual revenue

Invoice financing

Businesses that rely on accounts receivable and want to keep their billing relationship with customers

70% to 100% of the value of your invoices

As fast as one day

Processing fee around 3% plus a factor fee from 1% to 5% each week your client takes to pay their invoice

  • 6+ months in business
  • $50,000+ annual revenue

Line of credit

Seasonal businesses

$2,000 to $100,000

As fast as one day

12% to 36% APR

  • 1+ years in business
  • $50,000+ annual revenue

Merchant cash advance

Businesses that rely on credit or debit card sales

$2,000 to $250,000

As fast as one week

Factor rates from 1.14 to 1.18

  • 500+ credit score
  • 1+ years in business
  • $10,000+ monthly revenue

Business term loan

Business term loans come in one lump sum that you pay back over a set period of time with interest and fees. Loans with a term less than 18 months or two years are considered short-term and often come with daily or weekly repayments, instead of monthly repayments.

Invoice factoring

Invoice factoring involves selling your business’s unpaid invoices to a third party for a percentage of their value. Your lender gives your business a smaller percentage of the invoices upfront after deducting a fee. Once your customers pay off the invoices, the lender gives your business the remaining amount.

You can either sign up for invoice factoring monthly to make sure all of your business expenses are covered or use invoice factoring to cover a one-time payment. You can also either factor all of your business’s invoices or select which invoices to factor.

Invoice financing

Similar to invoice factoring, invoice financing gives you an advance on your invoices. It’s essentially a loan backed by your company’s invoices. You’ll get a percentage of your invoice’s value upfront, which you pay back with interest and fees. Once the client pays you, you repay your lender.

Line of credit

Lines of credit give your business access to a certain amount of funds at the last minute, similar to a credit card. You only have to repay what you borrow and your loan term typically starts when you make your first withdrawal. Short-term lines of credit typically come with terms that range from six to 12 months with weekly or even monthly repayments.

Merchant cash advance

Merchant cash advances are quick lump-sum advances on your business’s future sales. Your business can typically qualify for a certain percentage of its annual sales and pay it back with a percentage of your business’s daily sales or with fixed daily withdrawals from your business’s bank account.

Instead of getting an interest rate, you’ll get a factor rate, which determines how much you’re on the hook to pay back up front. Multiply your merchant cash advance by the factor rate and that’s how much you’ll pay.

How can a short-term loan benefit my business?

  • Short-term loans are made for cashflow emergencies. The fast turnaround make it possible to cover an unexpected expense within 24 hours.
  • Simple applications with minimal paperwork make it possible to apply for financing in a matter of minutes, rather than the hours of work it might take to get a bank loan.
  • Good credit often isn't required for most short-term loans — though they can quickly get expensive if your credit score is close to the lender's minimum cutoff.
  • Businesses with as little as six months of revenue can qualify with most short-term lenders. And there are even a few options for startups.
  • Lenders usually don't require specific collateral for a short-term loan. Instead, you only need to provider a lien on business assets and a personal guarantee.

What to watch out for

  • Short-term loans come with higher interest rates and fees than other types of loans, especially if they come with lax credit requirements.
  • Most require weekly or daily repayments, which can be risky for small business owners. Small blips in your cash flow can affect your ability to pay the back on time.
  • Short-term loans can be a debt trap for some small businesses. It's a little too easy to take out another loan — many lenders offer the option to borrow more funds before you've fully repaid the balance.
  • Large expenses are particularly expensive with short-term loans. The larger the loan, the higher the cost. With such frequent repayments, a large short-term loan could be the recipe for default.
  • Lenders that don't charge interest are often not transparent about how fees work. This makes it difficult to compare costs.

Bottom line

Short-term business loans could help your business in a pinch. Their fast turnaround time and relatively effortless applications mean you can get a small amount of funds fast when you need it. But your business will pay for that quick and easy application — they cost more than your typical business loan. You might want to treat them as a last resort.

Curious about how other types of business financing work? Check out our business loans guide, where we break things down and compare lenders.

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