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Best Short-Term Business Loans of 2023

Short-term loans offer fast funds to cover immediate business expenses. Online lenders typically provide these loans.
By Randa Kriss
Last updated on July 13, 2022
Edited bySally Lauckner

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A short-term business loan can give you the fast capital you need to bridge cash-flow gaps, cover emergency expenses and pay for other immediate financing needs — or take advantage of a new business opportunity.
With short-term loans, you typically receive a lump sum of cash from a lender and repay it on a fixed schedule. Generally, these small-business loans have repayment terms of 12 months or less, although some may have terms that extend up to 24 months.
Below, compare some of the best options for short-term business loans. Plus, learn more about how these loans work and how to get short-term financing.

How much do you need?

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We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Here are 5 short-term business loans

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Lender
NerdWallet Rating
Max loan amount
Min. credit score
Next steps

Kabbage - Line of credit

on Kabbage's website

4.5/5

Best for Short-term business lines of credit

$250,000640

on Kabbage's website

Bluevine - Line of credit

with Fundera by NerdWallet

5.0/5

Best for Fast short-term business loans

$250,000625

with Fundera by NerdWallet

OnDeck - Online term loan

with Fundera by NerdWallet

5.0/5

Best for Unsecured short-term business loans

$250,000625

with Fundera by NerdWallet

Fundbox - Line of credit

with Fundera by NerdWallet

5.0/5

Best for Short-term business loans for startups

$150,000600

with Fundera by NerdWallet

OnDeck - Line of credit

with Fundera by NerdWallet

5.0/5

Best for Short-term business loans for bad credit

$100,000625

with Fundera by NerdWallet

Here are 5 short-term business loans

Best for Short-term business lines of credit

Kabbage

Max Amount

$250,000

Min. Credit Score

640

Best for Fast short-term business loans

Bluevine

Max Amount

$250,000

Min. Credit Score

625

Best for Unsecured short-term business loans

OnDeck

Max Amount

$250,000

Min. Credit Score

625

Best for Short-term business loans for startups

Fundbox

Max Amount

$150,000

Min. Credit Score

600

Best for Short-term business loans for bad credit

OnDeck

Max Amount

$100,000

Min. Credit Score

625

Our pick for

Short-term business lines of credit

Kabbage offers short-term lines of credit of up to $250,000.

Kabbage - Line of credit

4.5
NerdWallet rating 
Read Review

on Kabbage's website

Max Loan Amount
$250,000
Min. credit score
640
Kabbage loans are a good option for business owners with fair credit who want quick access to working capital.

Max loan

$250,000

Min. Credit score

640

Kabbage loans are a good option for business owners with fair credit who want quick access to working capital.
4.5
NerdWallet rating 
Read Review

on Kabbage's website

Our pick for

Fast short-term business loans

Bluevine offers short-term financing with terms up to 12 months. Funds can be available within hours of approval.

Bluevine - Line of credit

5.0
NerdWallet rating 
Read Review

with Fundera by NerdWallet

Max Loan Amount
$250,000
Min. credit score
625
Est. APR
20.00-50.00%
Bluevine's line of credit provides fast working capital for short-term borrowing needs.
May fund quickly

Max loan

$250,000

Min. Credit score

625

Apr range

20.00-50.00%

Depending on your creditworthiness and your business's financials

Bluevine's line of credit provides fast working capital for short-term borrowing needs.
5.0
NerdWallet rating 
Read Review

with Fundera by NerdWallet

Our pick for

Unsecured short-term business loans

OnDeck offers short-term loans and doesn’t require physical collateral. Borrowers are subject to general liens on their business assets, however, and are required to sign a personal guarantee.

OnDeck - Online term loan

5.0
NerdWallet rating 
Read Review

with Fundera by NerdWallet

Max Loan Amount
$250,000
Min. credit score
625
Est. APR
29.90-97.30%
OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
May fund quickly

Max loan

$250,000

Min. Credit score

625

Apr range

29.90-97.30%

Based on loans originated in the half-year ending March 31, 2022

OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
5.0
NerdWallet rating 
Read Review

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Our pick for

Short-term business loans for startups

Fundbox offers short-term funding for startups with six or more months in business.

Fundbox - Line of credit

5.0
NerdWallet rating 
Read Review

with Fundera by NerdWallet

Max Loan Amount
$150,000
Min. credit score
600
Est. APR
10.10-79.80%
Fundbox offers a business line of credit to fill a cash-flow gap, and qualifying is easier than with other lenders.
May fund quickly

Max loan

$150,000

Min. Credit score

600

Apr range

10.10-79.80%

Depending on your creditworthiness and your business's financials

Fundbox offers a business line of credit to fill a cash-flow gap, and qualifying is easier than with other lenders.
5.0
NerdWallet rating 
Read Review

with Fundera by NerdWallet

Our pick for

Short-term business loans for bad credit

OnDeck offers short-term loans for business owners with credit scores of 625 or higher.

OnDeck - Line of credit

5.0
NerdWallet rating 
Read Review

with Fundera by NerdWallet

Max Loan Amount
$100,000
Min. credit score
625
Est. APR
29.90-65.90%
OnDeck offers a fast line of credit for small-business owners with less-than-stellar credit who need to manage cash flow or buy inventory.
May fund quickly

Max loan

$100,000

Min. Credit score

625

Apr range

29.90-65.90%

Based on loans originated in the half-year ending March 31, 2022

OnDeck offers a fast line of credit for small-business owners with less-than-stellar credit who need to manage cash flow or buy inventory.
5.0
NerdWallet rating 
Read Review

with Fundera by NerdWallet

How Much Do You Need?

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How do short-term business loans work?

Short-term business loans are generally structured as lump sums of capital that you pay back over a set period of time, or term. These loans typically have repayment terms of one year or less — although some lenders may offer terms of up to 18, or even 24, months.
Short-term loans are usually repaid on a daily or weekly basis, meaning you’ll make larger, more frequent payments than you would with a long-term business loan.
These loans are most often issued by online lenders, which offer fast funding and streamlined applications. Compared with bank or Small Business Administration lenders, short-term lenders typically have more flexible qualification requirements and may work with startups or businesses with bad credit.
As a result, however, short-term business loans generally have higher interest rates than longer-term loans or more traditional financing options. Interest rates can range from 10% to 99%.

Pros and cons of short-term business loans

Pros

  • Wide range of uses. Short-term business loans typically don’t have restrictions on the ways you can use them. Because these loans have short repayment terms and fund quickly, however, they’re often best suited for immediate or unexpected expenses. You can use a short-term loan for working capital, to manage cash flow gaps, to take advantage of a new business opportunity, to pay for emergency repairs or cover costs during a slow season.
  • Quick to fund. If you need a fast business loan, some short-term lenders can provide financing in as little as 24 hours. And compared with bank lenders, which may take weeks to process your application, short-term business loans are often funded within a matter of days.
  • Streamlined applications. Most short-term business loans are issued by online lenders, which typically offer streamlined applications. You can usually complete and submit an online application in a matter of minutes, with minimal documentation required.
  • Flexible eligibility criteria. Short-term lenders generally have more lenient qualification requirements compared with more traditional business lenders. Startups or businesses with bad credit may be able to qualify for a short-term business loan.

Cons

  • Can be expensive. Short-term business loans typically have higher interest rates and fees compared with long-term loans. Business bank loans, for example, have annual percentage rates that range from approximately 3% to 7% — whereas short-term loans have rates that range anywhere from 10% to 99%.
  • Frequent repayments. Short-term lenders often require payments daily or weekly as opposed to monthly. This means you’re making larger, more frequent payments over a shorter term. For some businesses, this payment schedule can impede cash flow and can be difficult to manage.
  • Confusing contracts. Not all short-term lenders present interest rates and repayment terms in the same way — which can be confusing when you’re trying to compare products and determine the total cost of your loan. Although some lenders use APR, others might offer a simple interest rate, or even a factor rate. You should always calculate these rates (and fees) into an APR, as this is the best way to understand how much the loan costs.
  • Risk of debt trap. The speed and ease of qualifying for some short-term business loans can be problematic if you can’t keep up with your payments. When these daily or weekly payments cut into your cash flow, you may feel the need to take out another loan or refinance in order to repay. With high interest rates and frequent repayments, this cycle of debt can be difficult to break.

How to get a short-term business loan

You can follow these steps to get a short-term business loan:

Assess your financing needs

You’ll want to think about how much funding you need and what you want to use it for. You’ll also want to consider what type of business loan is right for you. In addition to term loans, business lines of credit and invoice factoring are common forms of short-term financing.
Since short-term business loans have more frequent payments and higher interest rates, you’ll want to make sure your business can afford any debt you take on.

Evaluate your qualifications

Although short-term lenders often have flexible qualification requirements, you’ll want to know where your business stands before applying. You can check your credit score, time in business and annual revenue — as many lenders use these three criteria to evaluate your loan application.

Find and compare lenders

Once you have an understanding of your funding needs and qualifications, you can explore lenders to find the best options for your business.

Submit your application

Short-term lenders typically offer a streamlined, online application that can be completed fairly quickly with minimal documentation. Although business loan application requirements vary by lender, you may be asked to provide:
  • Business and personal tax returns.
  • Business and personal bank statements.
  • Business financial statements, such as a profit and loss statement.
Short-term lenders don’t usually require physical collateral to secure your loan, but you’ll likely have to sign a personal guarantee. Your lender may also take out a general lien on your business assets.

Close your loan

Before you sign a business loan agreement, you should compare all loan offers you receive to make sure you’re getting the best deal for your business. You’ll also want to thoroughly review the agreement and make sure you understand the repayment terms, interest rate and additional fees. If you have any questions, you should ask the lender for clarification before signing.

Compare more small-business loans

The best business loan is generally the one with the lowest rates and most ideal terms. But other factors — like time to fund and your business’s qualifications — can help determine which option you should choose. NerdWallet recommends comparing small-business loans to find the right fit for your business.
Last updated on July 13, 2022

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