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Short Term Business Loans

Best Short-Term Business Loans

If your business needs funding fast, a short-term business loan could be the answer. These loans are usually easy to apply for and some lenders release funds the same day, making them a practical option for covering unexpected expenses.

What is a short-term business loan?

A short-term business loan lets your business borrow money for up to two years, helping you cover short-term expenses without long-term commitment. These business loans are designed to help you grow your business by smoothing out cash flow and taking advantage of new opportunities without committing to long-term debt.

» COMPARE: Best business loans

How do short-term business loans work?

A short-term business loan provides your company with a lump sum that you repay – plus interest – over a fixed period. These loans are designed for quick access to funds and simple repayment schedules.

Here’s how it works in practice:

Apply online and get a decision fast
Many UK lenders let you apply in minutes with basic business details and recent bank statements. Some offer same-day approval.
Receive a lump-sum payment
Once approved, the loan amount – typically £1,000 to £1 million – is paid directly into your business bank account. Funds can often be released within 24 hours.
Repay in fixed instalments
You’ll repay the loan in regular monthly (or weekly) instalments that include both principal and interest. Payments continue until the loan is cleared within the agreed term.
Unsecured vs secured options
Most short-term business loans are unsecured, meaning no collateral is required. This speeds up the process but may mean slightly higher interest rates. If you choose a secured loan, you’ll provide an asset (such as property or equipment) as security. This can lower your rate but puts your asset at risk of being lost if repayments aren’t made.

» MORE: Estimate your potential repayments

Who can get a short-term business loan in the UK?

Most UK businesses can qualify for a short-term business loan if they are actively trading, based in the UK, and can show a steady flow of income. While eligibility criteria vary by lender, requirements are usually simpler and less strict than for long-term business loans.

Typical eligibility requirements include:

UK-based business: Your company must be registered and actively trading in the UK.
Age and residency: The business owner should be over 18 and a UK resident.
Trading history: Many lenders require at least 6-12 months of trading, though start-up funding options exist.
Turnover: A minimum monthly or annual turnover is often needed to qualify.
Credit history: A good or fair business credit score gives access to more loans, but some lenders accept lower scores with additional checks.
Personal guarantee: You may be asked to personally guarantee the loan, meaning you’re responsible for repayment if the business can’t pay.

Can you get a short-term business loan with bad credit?

Yes, but approval may be harder and interest rates higher. Lenders might also ask for:

A personal guarantee to reduce their risk
A secured loan backed by business assets
A shorter term or smaller amount until your business credit score improves.

If your business credit score isn’t strong, focus on lenders that specialise in bad credit business loans or alternative finance options like business credit cards, asset finance or a cash flow loan.

» MORE: Bad credit business loans

How can I apply for a short-term business loan through NerdWallet UK?

NerdWallet UK makes finding a short-term business loan simple. Answer a few quick questions, get instant matches from trusted UK lenders, and apply online – all without affecting your credit score.

Answer a few questions about you and your business, so we know what to look for.
Get matched instantly with small business loan lenders and loans that you’re eligible for.
Compare loans and apply to your chosen provider, with forms pre-filled using details you’ve provided already.

» COMPARE: Find loans your business qualifies for today

How much can you borrow with a short-term business loan?

Borrowing amounts typically range from £1,000 to £1 million, though some lenders may offer more. The amount depends on:

Your business finances and turnover
How long you’ve been trading
The purpose of the loan
The lender’s terms.

What can you use a short-term business loan for?

Businesses often use short-term loans to:

Cover unexpected expenses.

Get a new business off the ground
Manage cash flow
Buy stock or equipment
Move to new premises
Pay bills or rent
Hire new staff
Fund marketing campaigns

Advantages of short-term business loans

Fast access to funds – sometimes within 24 hours
Simpler application – with less paperwork
Lower total interest costs – because the term of the loan is shorter
Flexibility – it can be used to cover various business needs
Eligibility – often less strict criteria compared to longer-term loans.

Disadvantages of short-term business loans

Higher monthly repayments – due to shorter loan terms
Potentially higher interest rates – compared to other types of business loans
Smaller borrowing limits – particularly for unsecured loans
Personal guarantees – these may be required if your business has bad credit or hasn’t been trading for long enough to build a credit history
Not a long-term solution – you should explore other options if you anticipate long-term cash-flow problems.

How to compare short-term business loans and find the best deal

The best short-term business loan for your company is the one that offers the right mix of affordable repayments, manageable loan terms, and quick approval – all while fitting your business’s cash flow and credit profile.

Here’s how to compare lenders and find your best match:

Decide how much you need to borrow
Only borrow what you need – smaller loan amounts help keep both your repayments and total interest lower.
Choose the right loan term
A shorter loan term usually means higher monthly repayments but lower overall interest costs. Choose a term that your business can afford comfortably each month.
Compare lenders and interest rates
Look beyond the APR – check for hidden costs, flexibility, and how quickly lenders can release funds.
Check fees and charges
Watch out for arrangement fees, early repayment penalties, or late payment charges that could increase the cost of borrowing. The best short-term loan is transparent about all costs upfront.
Check eligibility before applying
Many lenders offer soft credit checks, which let you see your chances of approval without impacting your credit score.

» COMPARE: Best business loans

Alternatives to a short-term business loans

If a short-term business loan doesn’t suit your needs, there are several other ways to fund your business – each with its own advantages depending on how quickly you need money and how long you want to borrow for.

1. Small Business Loans

Choose this option if you need to borrow more money or prefer longer repayment terms (typically one to five years).

Best for: Expanding operations or making larger investments.

» COMPARE: Small business loans

2. Startup Business Loans

Designed for businesses that have been operating for less than two years, a startup loan could help you cover the cost of equipment and stock.

Best for: New businesses with little to no trading history.

» COMPARE: Startup business loans

3. Business Credit Cards

A flexible funding option that works like a revolving line of credit. Use it to cover day-to-day expenses and repay when your cash flow improves.

Best for: Covering short-term costs without a lump-sum loan.

» COMPARE: Business credit card

4. Business Overdrafts

An overdraft lets you dip into negative balance up to an agreed limit, making it ideal for short-term cash flow gaps. Interest is only charged on what you use.

Best for: Managing cash flow or covering temporary dips in income.

» COMPARE: Business bank accounts with overdrafts

5. Invoice Finance

If you regularly invoice clients, this option lets you release cash tied up in unpaid invoices – without taking on new debt.

Best for: Businesses with long client payment terms.

Still deciding which funding option is right for you?

Use NerdWallet UK’s free comparison tool to explore short-term loans, startup finance, and other business funding options – all without affecting your credit score.

Unsecured business loans are often the easiest to qualify for because they don’t require collateral. Many short-term business loans fall into this category.

Instant short-term loans provide fast access to funds, sometimes within hours, typically repaid in one to two years.

Some lenders offer short-term financing for startups, though eligibility often depends on trading history and projected revenue.

Loans repaid within 12-24 months are typically considered short-term. Longer terms, of between three and 10 years, tend to fall under long-term business loans.

The best option depends on your financial goals, credit history, and repayment capacity. Compare short-term and long-term loans before deciding.

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