Featured Partner Offer
1
OnDeck
Loan amounts
$5,000 to $250,000
APR
Not disclosed
Minimum credit score
625
Best Short-Term Business Loans of February 2024
Best Overall Short-term Loan
OnDeck
Via Ondeck's Website
$5,000 to $250,000
Not disclosed
625
Why We Picked It
OnDeck was founded in 2006 and has since been a leading provider in the business lending space, offering both term loans and lines of credit. Today, they have extended $14 billion in funding to small businesses.
We picked OnDeck for its variety of business lending products and same-day funding. OnDeck offers a term loan between $5,000 and $250,000 with repayments terms of up to 24 months. You can also access a credit limit of $6,000 to $100,000 through its line of credit with a 12-month repayment term that resets after each withdrawal.
Note: OnDeck does not lend to businesses in Nevada, North Dakota or South Dakota. What’s more, while it lends to over 700 industries, there are some industries it cannot serve.
Pros & Cons
- Term loans up to $250,000; lines of credit up to $100,000
- Same-day funding
- Low minimum credit score requirement
- $100,000 minimum annual revenue requirement
- Must have been operating for at least one year
- Does not lend to businesses in Nevada, North Dakota or South Dakota.
Extra Details
Eligibility: Prospective borrowers must have a minimum personal credit score of 625 to qualify for an OnDeck term loan or line of credit. Additionally, their business must have been in operation for at least one year and have annual gross revenue of at least $100,000. Applicants must also have an open business checking account.
Turnaround time: You can apply and receive a decision from OnDeck on the same day. What’s more, approved borrowers also can have their funds in their bank account as early as the day they’re approved.
Best for Flexible Lines of Credit
BlueVine
On BlueVine's Website
Why We Picked It
BlueVine is a financial technology company that provides financing solutions to small businesses nationwide. It specifically specializes in business lines of credit and checking accounts. As of December 2021, BlueVine no longer offers invoice factoring as one of its financing methods.
Small business owners looking to access a line of credit on an as-needed basis can receive funds between $6,000 and $250,000. BlueVine offers two payment structures: Flex 6 or Flex 12. Customers who choose Flex 6 make weekly payments over 26 weeks while Flex 12 customers make monthly payments over 12 months. What’s more, after 45 days of payment on Flex 6, or 90 days of payment on Flex 12, you may be eligible for a credit line increase.
BlueVine also charges weekly or monthly fees for its line of credit. Standard pricing is 1.7% per week or 7% per month for line of credit draws.
Note: BlueVine’s line of credit is available in all 50 U.S. states except North and South Dakota.
Pros & Cons
- Businesses that have been in operation for at least 24 months are eligible
- Lines of credit up to $250,000
- Low credit score requirement
- No mobile app for its line of credit
- Monthly revenue requirement
- Not available to business in North and South Dakota, Puerto Rico and U.S. territories
Extra Details
Eligibility: Eligibility varies on the specific program a business owner chooses.
Flex 6:
- Minimum personal credit score of 625
- Must have been in business for at least 24 months
- $40,000 per month in revenue or $480,000 annually
- Your business must be a corporation or LLC
- No bankruptcies within the last three years
Flex 12:
- Minimum personal credit score of 650
- Must have been in business for at least three years
- $80,000 per month in revenue or $960,000 annually
- Your business must be a corporation or LLC
Turnaround time: After you submit your application, you can receive a decision as quickly as five minutes. If approved, you’ll receive your funds in your bank account within a few hours if you choose its $15 bank wire option. Choose its free ACH transfer option, and you’ll receive your funds within one to three business days.
Best for Loan Options
Biz2Credit
On Biz2credit's Website
$25,000 to $6 million
15.99% to 29.99%
650*
*See Website For Details
Why We Picked It
Biz2Credit is a business financing platform that provides three funding options—term, Revenue-Based financing and commercial real estate (CRE) loans—ranging from $25,000 to $500,000. It only takes a few minutes to apply.
Biz2Credit can connect business owners with Revenue-Based financing from $25,000 to $2 million and term loans between $25,000 to $500,000. Revenue-Based financing is paid back with your business receipts through daily, weekly or bimonthly payments while term loans are repaid through weekly, bimonthly or monthly payments over the course of 12 to 36 months. Biz2Credit also offers interest-only CRE loans from $25,000 to $2 million with terms between 12 and 36 months; payments are due monthly.
In the event that Biz2Credit cannot provide a financial product, it may present third-party options to qualified prospective borrowers. However, Biz2Credit confirms that “inthe vast majority of cases, [it] will make a financing decision without referral to any external party.”
Pros & Cons
- Less stringent qualification requirements for working capital funding
- Quick application, approval and funding process
- More stringent qualification requirements for term and CRE loans
- Working capital funding require daily, weekly or bimonthly payments
- CRE loans approvals can take up to 30 days
Extra Details
Eligibility: To qualify for revenue-based financing, applicants must have a minimum personal credit score of 650* (see website for details), have been operating their business for 12 months+ (see website for details) and have a minimum annual revenue of $250,000. Term loans, on the other hand, require a minimum score of 650*, 12 months+ (see website for details) in business and annual revenue greater than $250,000 (see website for details). CRE loans share the same minimum requirements as term loans but also require that prospective borrowers already own commercial property.
Funding time: Business owners can typically apply online fast and get a decision fast (see website for details). However, CRE loan approvals may take longer.
Best for Small and Large Lines of Credit
American Express® Business Line of Credit
4.0
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
$2,000 to $250,000
Monthly fees
Varies by loan term
see below for details
Minimum credit score
All businesses are unique and are subject to approval and review. The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.
660 FICO at the time of application
Via American Express's Website
$2,000 to $250,000
Varies by loan term
see below for details
All businesses are unique and are subject to approval and review. The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.
660 FICO at the time of application
Why We Picked It
American Express® Business Line of Credit (formerly Kabbage from American Express and Kabbage Funding™) gives business owners the chance to secure funding between $2,000 to $250,000. Repayment terms include six, 12, 18 and 24 months.
Line of credit customers incur a loan fee for each month they have an outstanding balance. Total monthly fees incurred over the loan term range from 3% to 9% for six-month loans, 6% to 18% for 12-month loans, 9% to 27% for 18-month loans and 12% to 18% for 24-month loans.
In addition to its line of credit, American Express Business Blueprint provides other tools beneficial to small business owners, including its own mobile app that provides comprehensive cash flow insights.
Pros & Cons
- Backed by American Express
- No prepayment penalty
- Monthly fees on unpaid balances
- Requires personal guarantee
Extra Details*
Eligibility: To be eligible for financing through American Express® Business Line of Credit, applicants must have a minimum personal FICO credit score of at least 660 at the time of application, have been in business for at least one year and have a valid business checking account. There is an average monthly revenue of at least $3,000. All businesses are unique and are subject to approval and review. The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.
Funding time: Once you complete your loan application and sign the loan agreement, funds are sent to your verified bank account. Funds can take up to three business days to appear in your account, depending on your bank.
Best for Quick Approvals
Fundbox
4.0
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
$1,000 to $150,000
APR
Start at 4.66%
Minimum credit score
600
Learn More
On Fundbox's Website
$1,000 to $150,000
Start at 4.66%
600
Why We Picked It
Fundbox is an AI-powered business lending platform that speeds up the application, decision-making and funding process. It offers decisions within three minutes and funds as soon as the next business day.
Prospective borrowers have two business financing options through Fundbox. Business owners can apply for revolving business lines of credit up to $150,000 with repayment terms of 12 or 24 weeks. Your available credit goes back up as you repay your line of credit.
Pros & Cons
- Receive a decision within three minutes
- Low minimum credit score requirement
- Next-day funding
- Only short-term repayment terms are available
- Relatively low lines up credit of up to $150,000
Extra Details
Eligibility: Applicants must have a minimum personal credit score of 600 to qualify for financing through Fundbox. The applicant’s business must only be in operation for at least six months, making it a possible option for startups. However, businesses must have at least $100,000 in annual revenue.
Funding time: Whether you’re getting a line of credit, your funds transfer to your bank account as soon as the next business day.
Learn More Via Ondeck's Website
Have you considered OnDeck?
OnDeck is an online lending platform that has been helping small businesses gain access to financing since 2006. It offers two borrowing solutions that may work well for companies needing fast access to cash.
Fast funding speed available
Credit requirements are lenient
Helps establish business credit
Learn More Via Ondeck's Website
No Thanks, Take me back
Best for Established Businesses
Balboa Capital
4.0
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
$5,000 to $250,000
APR
Not disclosed
Minimum credit score
620
Learn More
$5,000 to $250,000
Not disclosed
620
Why We Picked It
Balboa Capital gets an A+ rating from the Better Business Bureau (BBB) and has funded over $7 billion in loans in the U.S. If you need a short-term loan, Balboa Capital offers options between $5,000 and $250,000.
You can fill out an application online, and you could get an approval within an hour. Borrowers can choose from loan terms between three and 24 months. While excellent credit isn’t needed to qualify, the higher your credit score, the better your interest rate will likely be.
Pros & Cons
- Loans up to $250,000
- Online application with quick funding
- May qualify with just a year in business
- $300,000 annual revenue requirement
- Not suited for new businesses
Extra Details
Eligibility:You must be in business for at least one year, with $300,000 in revenue and a FICO score of 620 or higher to qualify.
Funding Time:In some cases, you may be able to apply and get funding within the same day.
Learn More Via Ondeck's Website
Have you considered OnDeck?
OnDeck is an online lending platform that has been helping small businesses gain access to financing since 2006. It offers two borrowing solutions that may work well for companies needing fast access to cash.
Fast funding speed available
Credit requirements are lenient
Helps establish business credit
Learn More Via Ondeck's Website
No Thanks, Take me back
Summary: Best Short-term Business Loans
Company | Company - Logo | Forbes Advisor Rating | Forbes Advisor Rating | Loan amounts | APR | Time in business | Minimum credit score | Learn More CTA text | Learn more CTA below text | Learn More |
---|---|---|---|---|---|---|---|---|---|---|
OnDeck | ![]() | 5.0 | ![]() | $5,000 to $250,000 | Not disclosed | 1 year | 625 | Learn More | Via Ondeck's Website | |
BlueVine | ![]() | 4.5 | ![]() | $6,000 to $250,000 | Not disclosed | 2 years (Flex 6 plan) | 625 | Learn More | On BlueVine's Website | |
Biz2Credit | ![]() | 4.0 | ![]() | $25,000 to $500,000 | Does not disclose | 12 months+* | 650* | Learn More | On Biz2credit's Website *See Website For Details | |
American Express | ![]() | 4.0 | ![]() | $2,000 to $250,000 | N/A | 1 year | 660 FICO at the time of application¹ | Learn More | Via American Express's Website | |
Fundbox | ![]() | 4.0 | ![]() | $1,000 to $150,000 | Start at 4.66% | 6 months | 600 | Learn More | On Fundbox's Website | |
Balboa Capital | ![]() | 4.0 | ![]() | $5,000 to $250,000 | Not disclosed | 1 year | 620 | View More |
Tips To Compare Short-term Business Loans
Consider these tips when comparing short-term business loans:
- Find repayment terms that work for you. If your primary goal is to repay your debt quickly, compare lenders based on available repayment terms. Shorter repayment terms may come with larger monthly payments, but they also save you money on interest over the life of the loan.
- Determine how you want to receive your funds. Two of the most common ways you can receive and access your business funds are through a lump-sum payment or on an as-needed basis. If you want to receive your funds up front, choose a traditional working capital or term loan. However, if you want to use funds only as you need them, consider a business line of credit.
- Look out for additional fees. Some lenders offer fee-free business loans that don’t require borrowers to pay origination fees, late payment fees, prepayment penalties or any other common loan costs. However, this is not always the case. Be sure to confirm a lender’s fee structure when shopping for the best terms. Factor additional fees into your decision-making process.
- Evaluate the lender’s customer support options. If you’ve found a lender that’s prepared to offer the money you need at acceptable terms, consider the lender’s support options before signing the loan agreement. Customer support can make a huge difference down the line if you encounter issues with repayment. Research the lender’s customer service resources and read reviews to make sure it’s a good fit.
Methodology
We reviewed 26 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the lenders with terms as short as three months based on the weighting assigned to each category:
- Loan cost.35%
- Loan details.25%
- Customer experience.20%
- Eligibility and accessibility.10%
- Application process.10%
Within each major category, we also considered several characteristics, including available loan amounts, repayment terms and applicable fees. We also looked at minimum credit score and time in business requirements and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like online applications, prequalification options and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our .
What Is a Short-term Business Loan?
A short-term business loan is a loan or other form of financing that lets business owners access cash for expenses like short-term payroll needs, emergency expenses or other unexpected cash flow shortages. These loans generally come with annual percentage rates (APRs) as low as 3% and up to 50% or higher. However, these rates vary based on the type of financing, lender and borrower’s creditworthiness.
How Do Short-term Business Loans Work?
Short-term business loans function much like traditional business loans, but with shorter repayment periods. In general, short-term repayment periods range anywhere from three months to three years, but they’re often shorter than 12 months. Not only do shorter repayment terms translate into higher monthly payments, but short-term business loans may also come with more frequent payments.
Traditional installment loans are most commonly repaid on a monthly basis, but short-term loans may require weekly or daily payments to stay current. Due to these characteristics, short-term loans pose a greater risk of falling into a refinancing or debt trap, wherein the borrower is constantly refinancing a loan to decrease and delay payment—accruing interest throughout.
Types of Short-Term Business Loans
Popular types of short-term business financing include:
- Business terms loans. A business term loan is a traditional loan wherein the borrower receives a lump sum of cash and then repays it in equal amounts over the loan term. Interest accrues once the loan is funded, and the borrower can’t access funds again once repaid. This is an excellent financing strategy if you need a large sum of cash up front.
- Business lines of credit. A business line of credit allows a business owner to access a set amount of cash on an as-needed basis. Interest accrues only on the borrowed portion of the loan. Once funds are repaid, the portion of the credit line can be accessed again during the draw period. Choose this type of short-term financing if you want to access cash on an as-needed basis.
- Invoice factoring. Invoice factoring involves selling a business’ outstanding invoices to a third-party factoring company in exchange for 70% to 95% of the total invoice value. The factoring company becomes responsible for collecting the invoices and pays the business the remaining invoice balance—minus monthly factor fees of 0.50% and 3%.
- Merchant cash advances. With a merchant cash advance (MCA) a lender gives you a lump sum which is then repaid with your future sales, plus a fee known as a factor rate. MCAs can be flexible but also can come with high annual percentage rates (APRs).
Pros and Cons of Short-Term Business Loans
Short-term business loans can be easier to qualify for than other loans, but they still have their risks. Consider the pros and cons of short-term business loans before you go forward with this financing.
Pros
- Easier to qualify for
- Quick funding turnaround
- Receive client payments faster with invoice factoring
Cons
- Can be expensive
- Generally used for working capital
- Complicated or unfavorable repayment structures
- No early payoff savings with factor rates
When to Consider Short-term Business Loans
There are several circ*mstances under which a short-term business loan may be helpful or even necessary. Consider short-term business loans if you’re faced with:
- Interruptions to cash flow. Some businesses—like seasonal operations—are more susceptible to short-term cash flow issues than others. If your business experiences seasonal slowdowns or other regular cash flow issues, a short-term loan may provide the cash necessary to maintain production and make payroll during low-revenue periods. Just make sure you’ll have the funds to repay the loans when you need them.
- Short-term business opportunities. If your business is faced with a lucrative opportunity but needs funds quickly to make it happen, short-term financing may be the answer. Approval times and funding speeds may be faster than with traditional loans—sometimes as fast as 24 hours—and qualifications are often less rigorous. Still, this type of financing should only be used if the financed opportunity has the potential to increase revenue or otherwise improve your business’ bottom line.
- Emergency expenses. Sometimes expenses are unavoidable and can’t be postponed until you have cash on hand. If your business is faced with emergency expenses like building, equipment or fleet repairs, short-term business loans can provide the money you need to cover them.
When to Avoid Short-term Business Loans
A short-term loan can be an accessible solution if your business is faced with emergency expenses or is otherwise in need of cash. However, this type of financing is not a good fit for businesses that can’t repay the loan funds quickly. Avoid a short-term business loan if you’re facing any of these situations:
- Inability to make payments. If cash is tight and you need a short-term loan to fund operating expenses, take a deeper dive into the business’ finances and budget before borrowing. Likewise, evaluate whether the loan funds will increase the business’ revenue or otherwise improve its finances and ability to make payments. Then, determine how much you can realistically afford in payments each month—or week—and find a loan that fits your budget.
- High annual percentage rates. APRs on short-term loans may be higher than for their traditional counterparts. This is due to the fact that qualifications tend to be less stringent and funding speeds faster. A high APR can substantially increase individual payments and the overall cost of borrowing.
- Frequent repayments. Because some short-term loans have abbreviated repayment terms compared to traditional loans, borrowers may have less time to repay the funds. In addition to resulting in high monthly payments, this structure may include daily, weekly or biweekly payments instead of the normal monthly cadence. Don’t commit to a short-term loan if your business is unable to make consistent, on-time payments.
- Partially amortized repayments. Many traditional business loans are fully amortized, meaning the monthly payment is calculated so that the loan is fully repaid at the end of the loan term. However, some short-term business loans are only partially amortized with a balloon payment due at the end of the repayment term. This structure reduces the monthly payment amount but can be dangerous for businesses that aren’t prepared to cover the balloon when it’s due.
- Risk of repeated refinancing. Short repayment terms and large individual payments make it easy for business owners to fall behind on loan repayment. This often results in refinancing a short-term loan multiple times to both reduce and delay payments. While loan refinancing can be an effective way to cover necessary expenses, it can also create a debt trap wherein monthly loan payments exceed what the business can cover.
How to Get a Short-term Business Loan
The process for getting a short-term business loan depends on the type of financing and the lender. However, there are a few general steps to follow if you choose a short-term funding option.
- Evaluate your borrowing needs. Before searching for a lender, evaluate why your business needs a short-term loan. Will the expenditure improve efficiency or otherwise increase the business’ revenue? Do you need a lump sum of cash, or is a line of credit more appropriate? Based on these considerations, determine how much the business actually needs to borrow and what works with your budget.
- Check your credit score. If you have an established company, check its business credit score through Dun & Bradstreet (D&B), Experian or Equifax. Because most business loans are personally guaranteed by the applicant, lenders also look at the business owner’s personal credit score when evaluating their application. Ideally, you should have a FICO score of at least 600 to qualify for a short-term business loan.
- Compare lenders. Once you know what kind of short-term financing you want and how much you need to borrow, compare lenders. If you have an established banking relationship, ask an agent about lending offers. Where possible, evaluate each lender’s borrower qualifications to gauge your approval odds. Finally, read online reviews to identify red flags, and speak with other members of your industry to get lender recommendations.
- Submit a formal application. Visit your preferred lender’s website or contact a customer service representative to determine the formal application process. Many lenders offer online applications, though you may need to speak to an agent via telephone. Some traditional lenders still require prospective borrowers to complete their application documents in person.
¹The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.
Find the Best Small Business Loans of 2024
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Frequently Asked Questions (FAQs)
Can I get short-term business loans with bad credit?
Getting a short-term business loan with bad credit may be more difficult than for more creditworthy applicants, but it’s still possible. In general, loan applicants should have a FICO score of at least 600 to qualify.
However, many lenders look at a business’ finances as a whole, rather than focusing exclusively on the company’s—or owner’s—credit score. If you need a short-term business loan but have bad credit, bolster your application with documentation that demonstrates the business’ financial stability and your ability to make payments.
How much does a short-term business loan cost?
The cost of a short-term business loan depends on the type of financing, lender, borrower creditworthiness and other factors. For that reason, APRs can range anywhere from around 3% to 50% or higher. Borrowers also may encounter origination fees between 1.5% and 9% of the total loan amount.
How long is a short-term business loan?
It depends on the type of short-term business loan. The term for a short-term business can be a year or less, while loans like MCAs and invoice factoring vary based on sales or how quickly clients pay you. In contrast, you may choose to keep a business line of credit open indefinitely.
How can short-term financing help a business?
Short-term business loans are suited for working capital, such as paying for inventory or hiring new employees. If you’re making a major investment in your business, long-term business loans may be better suited for your business.
Are there short-term loans for startup businesses?
Short-term loans can help startups cover the immediate financial realities of opening a business. That said, it may be more difficult for businesses without established financial records to qualify for a short-term loan. To overcome this, prepare a comprehensive business plan that includes a description of how the business makes money, a marketing plan and revenue projections.
Business owners with strong personal credit are also more likely to qualify for short-term business loans by personally guaranteeing the loan. Likewise, it may be easier to get a secured loan that’s collateralized by a valuable asset, like an office building or other real estate.
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