How much money will it take to start your new business? Many entrepreneurs underestimate the cost of starting their business, but with the right nu...
The Top Lenders at a Glance
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Minimum Credit Score | Time Until Funding | Visit Site |
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None | Within 48 hours | View Rates |
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500 | 2 days to 2 weeks depending on the lender | View Rates |
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600 | As fast as 24 hours | View Rates |
A merchant line of credit loan permits businesses to draw on a flexible credit line up to the maximum agreed upon amount but needs to be repaid within weeks rather than months. Accounts receivable loans give advances against outstanding unpaid invoices. A short term business loan is usually approved quickly, with funding coming in within a few days, and isn't secured against any particular assets.
On average, short term business loans carry between 7% to 30% APR each month. Repayment terms are usually between 3 and 36 months, although some can be as short as just a few weeks. Some short term business loans do come with early repayment charges. Short term business loans are good for businesses that need extra capital for a short period of time like to cover stock expansion ahead of a busy shopping season. They are also great for covering an unexpected shortfall, meeting emergencies, or taking advantage of a business opportunity when the business needs the funding in a hurry. However, since rates tend to be higher than long-term business loans they can be risky, so only take on a short term loan if you are sure that you can pay it off within the term.
What to Look for When Choosing a Short Term Business Loan?
- Repayment fees: If you’ve decided that a short term business loan is the best solution for your company right now, then there are certain things to look for. Because short term loans usually carry higher interest rates, you’ll want to pay it off as fast as possible so look for a loan without any early repayment charges.
- Repayment schedule: Some short term lenders want repayments to be made daily or weekly rather than monthly, which could pose a challenge to your cash flow. Another issue is that many lenders allow you to renew your loan as soon as you’ve paid it or even when you’ve paid off just the majority of the amount. This can seem like a plus if you need more financing, but it can also turn into a temptation to keep on borrowing more without ever fully throwing off your debts.
1. Torro
- No collateral required
- Approval in under 48 hours
Torro offers five main types of business funding for new and existing companies, including startup funds, working capital loans, and merchant cash advances. The application process is simple, approval is fast, and funding is usually received within 48 hours.
2. Fundera
- Keeps information private, even from lenders
- Highly acclaimed
Founded as an alternative to traditional bank loans, Fundera has worked hard to build a solid reputation of trust, professionalism, and competitive rates. With a wide range of loan types and flexible repayment options, Fundera gears itself towards small business loans and provides loans of anywhere from as little as $5,000 up to $5 million.
3. OnDeck
- 24-hour approval
- Excellent customer service
OnDeck offers conventional business loans and lines of credit, allowing flexibility to get the loan you need. Best of all, you can have your money within 24 hours with fast approval and excellent customer service.
Conclusion
Short term business loans are an easy way to get access to working capital in a hurry when you need to cover temporary cash flow issues or take advantage of a great business opportunity. Each of the five loan providers we’ve profiled here can fix you up with a competitive short term business loan.