Loan Amount
Up to $500,000
Estimated Repayment Terms
3 - 18 months
Interest Rate
Starting @ 10%
Speed of Funding
As fast as same day
Short-Term Loans: When You Need Funding Fast
There are times when a business needs extra cash fast.
It could be that you face a sudden cash flow emergency, or an opportunity presents itself that you can’t pass up. The common challenge in both instances is time—it’s not on your side, and you can’t wait weeks or months to acquire the capital you need right now.
Short-term business financing may be the solution.
Short-term loans are easier to qualify and apply for. And they’re faster to fund. This means you can get back to running your business without missing a beat.
How Do Short-Term Business Loans Work?
A short-term loan provides businesses with upfront working capital that is then paid back in 18 months or less. This loan type can be used to fund renovations, seasonal preparations, fulfill large purchase orders or support businesses in maintaining healthy cash flows.
They’re best used to fill a short-term financial gap. That is, they’re not well-suited for high-cost, long-term projects that could take years before you see a return on your investment.
Benefits of Short-Term Business Loans
There are specific benefits and features of this loan type that separate short-term business loans from other funding options.
Faster Payoff Structure
The main difference between traditional business term loans and short-term business loans is the length and size of the financing.
Loan amounts are generally smaller, and the repayment terms are drastically shorter. In fact, it’s not uncommon for a short-term loan to feature a pay-off period as abbreviated as 3 months.
Additionally, payments are often remitted more frequently, on a daily or weekly, instead of a monthly basis. Therefore business owners who leverage short-term loans avoid a long-term commitment that can consume working capital for years after the need for funds has ended.
Be aware that this short payoff structure does have its drawbacks. Payments are generally higher and occur frequently. So make sure your cash flow can withstand this strain before you pursue this type of financing.
Easy to Qualify For
While traditional bank loan qualifications are hard to meet, short-term loans are easier for companies to secure. For instance, banks typically require businesses to be in operation for two years or more, annual revenue of at least $500,000 and a personal credit score above 675.
With more accessible qualifications, your business could obtain the funds you need to grow. Annual revenue of $75,000, a credit score of 540 and a business history of at least one year is generally enough to qualify you.
Fast to Fund
Getting approved for a business loan with a traditional lender can be a lengthy process, spanning anywhere from 6 weeks to 6 months. With a short-term business loan, you can be approved within hours and see the funds in your account as soon as the same day.
Having access to funds this quickly allows you to address any potential gaps in payroll, emergency expenses or make the purchases you need to grow your business.
Is a Short-Term Business Loan Right for You?
Speed of funds and condensed repayment periods are the signature features of short-term financing, making it an appealing prospect for small business owners with an immediate need for capital.
While they’re great for many, they’re not a one-size-fits-all product.
Consider a short-term business loan if:
- You have a short-term need for funds
- You need capital as soon as possible
- You have fair credit, but don’t qualify for a traditional long-term bank loan
Look elsewhere if:
- You don’t expect a quick return on investment or a sudden influx of cash
How to Qualify for a Short-Term Business Loan
Qualifying for a short-term business loan is faster and easier due to the fact that short-term lenders focus more on cash-flow than traditional term lenders.
Short-term lenders consider a variety of factors, including your annual revenue, time in business, average daily sales, profit margins and your intended use of funds.
Lenders increase approvals by spreading risk across multiple business attributes. While your credit rating is taken into account, it holds less clout. This is because significant and consistent cash-flow can reduce other financial details that may otherwise prevent a business from securing a business term loan.
Do You Qualify?
Based on previously approved borrowers, you’re likely to qualify if:
- You’ve been in business 1+ years
- Your annual revenue is $75K or more
- You have a credit score of 540 or better
How to Apply for a Short-Term Business Loan
Fast Capital 360 brings together the best short-term business lenders through one straightforward application.
Each application process is slightly different depending on the lender, but the fundamentals are the same: you fill out an online application asking you to provide basic information about your company and how much funding you’re looking for.
With the information you provide, we’ll work with our funding partners to determine if your business meets their qualifications.
Step 1: Tell us about your business.
Fill out a few basic questions about your business so that we can connect you with the best lenders.
Step 2: Tell us about you.
We need to learn about you so we can determine your eligibility without impacting your credit score.
Step 3: Connect your bank account.
Your revenue data enables us to match you to funding opportunities at the speed of modern business.
Step 4: Get funded.
Funds can be deposited into your bank account as soon as the same day.
What Will a Short-Term Business Loan Cost?
Understanding how much a short-term loan will cost you depends on a variety of business aspects, including your credit score.
The easiest way to determine what a short-term business loan agreement might look like is to reference an example.
Short-Term Loan Example
In this scenario, Penny’s Pancakes secures a $50,000 short-term loan with an interest rate of 18 percent. They’re quoted payoff term is 6 months. The total amount the company would repay is $52,657.56 with the cost of funds totaling $2,657.56.
To give you an even clearer picture of what Penny would be responsible for, take a look at the table below.
Best Uses for a Short-Term Business Loan
Short-term loans are one of the most flexible financing options available. The proceeds can be used to finance just about any business need.
Hire More Employees
You can only be in one place at one time. Naturally, this can limit your ability to grow your business. Short-term loans can help you bring on new employees by bearing the upfront costs of hiring.
Purchase New Inventory
Say you have a customer looking to place a sizeable order with your business, but they won’t be able to pay until the end of the month. In this scenario, a short-term business loan would provide your business with the funds you need to pay your vendor for the product and not miss out on a huge sale.
Marketing Campaigns
Attracting more customers to your business is a goal every owner has. But bringing new buyers in can come with high upfront costs. A short-term loan can provide you with the funds required to reach your target audience.
Manage Cash Flow
Other businesses might use short-term financing to fund expansion, consolidate loans, pay their taxes or take advantage of new business opportunities. Regardless, having the ability to better manage your cash flow opens near-endless possibilities.
Upgrade Equipment
Whether you’re working with computers and desk chairs in an office environment or heavy-duty machinery on a construction site, every business needs equipment. If your equipment fails or is due for an upgrade, a short-term loan can give you the chance to do so without depleting your cash flow.