A complete guide to short-term business loans.

 Here's a complete guide to short-term business loans, including key points on what they are, how to qualify, and alternatives:

---

Short-Term Business Loans: A Complete Guide

Estimated Read Time: 7 minutes

Short-term business loans are designed to be repaid within a shorter time frame than traditional business loans, typically within six months to three years. They often come with higher interest rates and lower loan amounts but are easier to qualify for and faster to obtain.

1. What is a Short-Term Small-Business Loan?

Repayment Schedule:

• Term Lengths: Usually from a few months to three years.
• Payment Frequency: Often weekly or even daily, unlike traditional loans with monthly payments.

Loan Amounts:

• Generally smaller than long-term loans, typically up to $500,000. Many lenders cap these loans around $250,000.

Interest Rates:

• Higher than long-term loans, starting around 8% and potentially exceeding 50%. The short repayment period can result in lower total interest costs despite higher rates.

2. Borrower Requirements for Short-Term Small-Business Loans

Qualifications:

• Credit Score: As low as 600.
• Business Age: Minimum of one year.
• Annual Revenue: Around $100,000.

These loans are more accessible than traditional term loans, which often require higher credit scores, longer business histories, and higher revenues.

3. Deciding if a Short-Term Loan Works for Your Business

Pros:

• Relaxed Requirements: Easier to qualify for than traditional loans.
• Fast Approval: Many lenders offer same-day approval and quick funding.
• Many Options: A variety of lenders and loan types available.

Cons:

• Higher Interest Rates: Short-term loans tend to have higher rates.
• Shorter Terms: Faster repayment might strain cash flow.
• Frequent Payments: Weekly or daily payments can be challenging for businesses with irregular cash flow.

Best Suited For:
Businesses needing quick cash for short-term opportunities or those that can't secure traditional loans.

4. How to Get a Short-Term Business Loan

Steps:

1. Pick a Lender: Research and select a lender that fits your needs.
2. Apply: Fill out the application form.
3. Submit Documents: Provide necessary documents such as bank statements and tax returns.
4. Wait for Approval: Lenders review your application and make a decision.
5. Receive Funds: If approved, funds are disbursed quickly.

5. Where to Get a Short-Term Business Loan

Lenders:

• Online Lenders: Typically offer quick and easy applications. Consider platforms like Lendio, which matches you with various lenders.
• Alternative Lenders: Providers such as OnDeck or Square Loans.
• Lending Marketplaces: For broader options and comparisons.

6. Alternatives to Short-Term Small-Business Loans

Business Line of Credit:

• Revolving credit with flexible access. Ideal for managing cash flow and unexpected expenses.

Merchant Cash Advance:

• Fast funding but comes with high costs and frequent repayments.

Business Credit Card:

• Useful for smaller expenses if you can repay quickly to avoid high-interest charges.

For More Options:
Explore other small-business funding alternatives to find the best fit for your needs.

The Takeaway

Short-term business loans offer quick access to capital with less stringent borrower requirements. They are well-suited for businesses needing immediate funds but can be costly due to higher interest rates and frequent payment schedules. Evaluate your business's cash flow, borrowing needs, and ability to handle frequent payments before applying.

---

For more information, consider checking your credit score and exploring additional funding options to ensure you make the best financial decision for your business.

Call 850-284-7134 to get your small business loan.