Best Short-Term Business Loans of April 2024
Updated March 29, 2024 at 4:37 pm
The best short-term business loans come from online lenders that offer a streamlined application process and fast funding within a few business days. Many of the best loans offered on a short-term basis are term loans and business lines of credit with repayment terms of up to 24 months.
While a range of companies offer business financing with a relatively short repayment term, their loan amounts, repayment timelines and eligibility requirements can vary. Some short-term business loans also do things differently by charging factor rates instead of interest, or by requiring daily, weekly or bi-weekly payments instead of monthly payments.
This guide provides an overview of the best short-term loans for businesses while highlighting all the important factors that help them stand out.
Our Methodology Newsweek Vault’s loan experts evaluated multiple data points to help our readers make sense of their borrowing options across student loans and personal loans. To narrow down the best available offers, we weigh the product pros and cons across five core categories, including:
- Application process
- Eligibility requirements
- Interest rates
- Loan amounts (minimum and maximum)
- Repayment flexibility
Our Picks - Best Overall: OnDeck
- Best for Short-Term Business Lines of Credit: American Express® Small Business Line of Credit
- Best for Fast Decisions: Bluevine
- Best for Bad Credit: Fora Financial
- Best for New Businesses: Fundbox
- Best for Flexible Loan Options: SMB Compass
- Best for Large Loan Amounts: Biz2Credit
These short-term business loans help companies get the financing they need to cover unexpected expenses or payroll when cash flow is right.
Best Short-Term Business Loans of 2024
Best Overall
OnDeck
Vault Verified
Why we chose it: OnDeck offers fast term loans and business lines of credit with repayment terms of up to 24 months. The lender beats out many other top competitors thanks to its minimum eligibility requirements, streamlined application process and chance at instant funding for a business line of credit once approved.
Pros
- Same-day funding available
- Relaxed eligibility requirements
- Reports to three major business credit bureaus
Cons
- Potential for a high APR
- Some borrowers may end up with daily or weekly repayments
Additional Info
Earliest Funding Time
Same-day funding available
Minimum Requirements
- One year in business
- $100,000 annual business revenue
Best for Short-Term Business Lines of Credit
American Express® Small Business Line of Credit
Vault Verified
Why we chose it: American Express extends a flexible business line of credit that lets companies repay amounts they borrow over six to 24 months. Available credit lines range from $2,500 to $250,000, and borrowers only pay fees on amounts they borrow.
Pros
- No prepayment penalties or origination fees
- Only need to be in business for at least 12 months
- Low monthly business revenue requirement
Cons
- Each draw is a separate loan with a loan fee
- Higher fees for longer repayment period
- Higher minimum credit score required than some lenders
Additional Info
Fees
- 6-month loans: 3.0% to 9.0%
- 12-month loans: 6.0% to 18.0%
- 18-month loans: 9.0% to 27.0%
- 24-month loans: 12.0% to 18.0%
Earliest Funding Time
1 to 3 business days
Minimum Requirements
Must be in business for at least one year
Best for Fast Decisions
Bluevine
Vault Verified
Why we chose it: Bluevine offers its business line of credit applicants a decision within 5 minutes, and funding can happen within 24 hours after approval. This business line of credit comes in amounts up to $250,000, and repayment can take place over six or 12 months. Learn more in our Bluevine business loans review.
Pros
- Fast application and funding process
- Low minimum credit score requirement
- Competitive interest rates
Cons
- High annual revenue requirements
- Two years in business required
- May require weekly payments
Additional Info
Earliest Funding Time
- A few hours with a bank wire and wire fee of $15
- ACH as soon as the next business day
Minimum Requirements
- Two years in business
- $480,000 in annual revenue
Best for Bad Credit
Fora Financial
Vault Verified
Why we chose it: Fora Financial can be more accessible than other lenders due to its loose eligibility requirements, making it a solid option for start-ups, newer businesses and business owners with low personal credit scores. Repayment terms last for up to 15 months, so this company’s loan options are short-term but flexible enough to let you tailor your monthly payment to your needs.
Pros
- Short requirement for time in business
- Low minimum credit score requirement
- May get discounts for early payments
Cons
- Charges factor rates instead of interest
- One-time loan processing fee applies
- Does not build business credit
Additional Info
Earliest Funding Time
Within 24 hours
Minimum Requirements
- Six months in business
- $180,000 in annual revenue
- No open bankruptcies
Best for New Businesses
Fundbox
Vault Verified
Why we chose it: Fundbox offers flexible lines of credit with fast funding timelines and the ability to get approved after just six months in business.
Pros
- Low minimum credit score requirement
- Fast application process and funding
Cons
- Low loan amount
- Weekly payments
- Short repayment terms of up to 24 weeks
Additional Info
Earliest Funding Time
As soon as the next business day
Minimum Requirements
- Six months in business
- Annual revenue of $100,000
Best for Flexible Loan Options
SMB Compass
Vault Verified
Why we chose it: SMB Compass offers more business financing options than the majority of other lenders, many of which feature competitive interest rates and flexible loan terms. Funding times can also be fast for its short-term loan options, often within 24 to 48 hours.
Pros
- Generous loan limits
- Competitive interest rates
- Low eligibility requirements for some loans
Cons
- Strict eligibility requirements for term loans
- Long funding times for some loans
Additional Info
Earliest Funding Time
24 to 48 hours
Minimum Requirements
- Two years in business for most loans; six months in business for term loans
- $100,000 annual revenue for business lines of credit; $500,000 annual revenue for business term loans
Best for Large Loan Amounts
Biz2Credit
Vault Verified
Why we chose it: Biz2Credit made our ranking due to its high loan amounts up to $6 million with longer repayment terms compared to most short-term lenders.
Pros
- Low eligibility requirements for some loans
- Large loans up to $6 million
- Several borrowing options
Cons
- May require daily or weekly payments
- High interest rates
- High annual revenue requirements for some loans
Additional Info
Earliest Funding Time
48 hours
Minimum Requirements
Varies
What Is a Short-Term Business Loan?
Short-term business loans can come in many different forms, including term loans with a set monthly payment and repayment terms, business lines of credit that let you borrow as you need it and merchant cash advances that offer funding based on future revenue. But these loans tend to offer shorter repayment terms that last up to 24 months.
When Would You Need a Short-Term Business Loan?
There are many reasons to borrow money with a short-term loan for business, but it all boils down to a company’s need for cash and their ability to pay it back over a relatively short period.
Some common reasons for short-term business loans include:
- Your business needs cash for unexpected expenses. If your business needs money to pay for new equipment, unanticipated repairs or bills you didn’t plan for, short-term business financing can cover these costs without draining your business accounts along the way.
- Business taxes are due, and you don’t have the cash. Maybe you misjudged how much you owe in business taxes and you need a loan to bridge the gap. In that case, short-term small business loans can save the day.
- You need a quick cash infusion to cover payroll. Short-term loans for business can also provide fast funding when you don’t have the funds to cover employee paychecks.
- You’re not sure how much cash you need. Short-term business lines of credit in particular can be a good option for business owners who need capital but aren’t exactly sure how much. These loans let companies borrow on an as-needed basis and make payments based on borrowed amounts.
- A new opportunity popped up. If your business comes into a new opportunity that won’t last forever and you need cash to take advantage, many short-term business financing options can help you get the money you need within a few business days at most.
- You need fast funding. Many short-term business loans for small businesses offer a fast and easy application process with the ability to get funding within 24 hours or a few business days.
When Would You Not Need a Short-Term Business Loan?
Short-term business loans can solve immediate funding problems and improve business cash flow, but there are situations where they’re not the best option.
Reasons to skip short-term small business loans can include:
- You need the lowest possible monthly payment. If you want to borrow money to grow your business and you need an affordable monthly payment, you may want to look into longer-term borrowing options, like SBA loans, which let you make payments for up to 10 years or longer.
- Business revenue is unpredictable. If you’re unsure you’ll be able to repay the money due to disappointing or unpredictable business revenue, taking out a small business loan with another payment to make could make the problem worse.
- You’re worried about high borrowing costs. Some short-term business loans have higher costs that can come in the form of origination fees, sky-high interest rates or factor rates that can be difficult to compare with loans that charge APRs..
- You don’t want to sign a personal guarantee. Short-term business loans often require a personal guarantee, making them legally liable for repayment. This means lenders can go after the personal assets of a business owner if they fail to repay.
- You need to consolidate business debt. If business debt consolidation is your goal, you should be looking for a long-term small business loan with the lowest interest rates and loan fees you can find.
How to Choose the Best Short-Term Loan for Your Business
With so many types of short-term business loans, it’s important to compare all your options before you apply. Keep the following in mind as you assess short-term business lenders.
Repayment Terms
Make sure to find a small business loan with repayment terms that fit your needs. Some companies offer short-term loans that need to be paid back in as little as 12 or 24 weeks. There are also short-term loan companies that offer business loans with terms of up to 12 or 24 months or longer. Shorter repayment periods always mean that regular payment requirements are higher. If you need more time to comfortably pay off your loan, consider a short-term loan that goes up to 24 months or longer or look at long-term business loans. You’ll pay more in interest charges, but monthly payments tend to be more manageable.
Fees and Charges
Consider potential interest rates and fees that apply with various short-term financing options and remember that costs can be high for short-term business loans.
Instead of interest rates, some high-risk short-term business lenders that work with business owners with bad credit charge factor rates instead of interest rates. Business loans that use factor rates tend to be more expensive than loans with comparable APRs. It’s also difficult to compare these loans with loans that use APRs.
Eligibility Requirements
Another consideration for companies who need financing is whether they can qualify. Fortunately, many companies that offer short-term business loans post their minimum eligibility requirements online where potential customers can easily find them.
Common eligibility criteria for short-term business financing include a minimum time in business (usually six to 24 months or longer), annual revenue requirements (often $100,000 or more) and minimum credit score requirements.
Frequently Asked Questions
Does the SBA Offer Short-Term Business Loans?
Government-backed SBA loans offered through the U.S. Small Business Administration typically come with lengthy repayment terms that can last up to 25 years, making them a better option for long-term borrowing. Also be aware that some SBA loans charge prepayment penalties if you prepay 25 percent of the balance of the loan or more within the first three years after you receive the first disbursement of loan funds.
What Is the Minimum Credit Score for a Short-Term Business Loan?
The minimum credit score for short-term business financing varies by lender but may be as low as 500 or 525 for some loan options. But many lenders require a minimum credit score of 625 or higher for short-term financing. Other minimum requirements that can apply include having a minimum amount of time in business and having a minimum amount of monthly or annual revenue.
What’s the Difference Between a Short-Term Loan and a Long-Term Loan for Business?
Some business lenders offer short-term loans with repayment terms that last for a matter of weeks or up to 24 months. Other loans feature much longer repayment terms. Long-term business loan options tend to have competitive fixed interest rates that make them more affordable over time, and longer repayment terms also lend themselves to lower monthly payments.
Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.
