Compare Short Term Business Loans

  • Various types of business finance are available with terms of under 12 months
  • Short term loans can be used many purposes including unexpected costs and cash flow problems
  • We can help you compare short term funding options from business loans specialists

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Information written by Holly Bennett Last updated on 20 June 2022.

A short-term business loan may be an option if you need to take out a loan to finance your business but don’t want to be locked into an arrangement for a few years.

There is no one-size fits all approach, as there are a few different types depending on what you are looking to fund. This could be anything from paying unexpected costs to getting expensive equipment to help your business grow.

As with any loan, consider the interest rate and how long you will be making repayments, so you know the total cost. It’s important to only borrow what you can afford to pay back. Also, consider any set-up fees as part of the agreement. To find the lowest cost agreement to suit your business, it makes sense to compare loan terms across different providers.

To make it easy, you could compare features such as minimum turnover requirements and available amounts across providers using the comparison table below.

What are short-term business loans?

Short-term business loans are a type of loan that you pay back relatively quickly. The terms usually last from a month up to a year. Over that time, you pay back the original loan plus interest charged with fixed, regular payments.

Borrowing amounts for short-term loans can range from £1,000 up to £1 million. But how much your business can borrow depends on a few factors. These include what you plan to use the money for, your business finances and how long you’ve been trading, and the provider’s terms.

Types of short-term business loans

There are a few ways you could borrow for a short period of time. You’ll want to identify the one that suits what you’re funding. When you apply, you will need to explain what you will use the money for.

Some short-term options might be:

  • Business loan: This is a standard loan arrangement where you borrow a set amount plus interest and pay it back over a period of time. This can be an unsecured or secured loan, though most short-term loans are unsecured.
  • Invoice financing: This is a way for businesses to borrow money against unpaid invoices.
  • Asset financing: This helps businesses to use high-value equipment, such as machinery or vehicles, for a short period, without having to buy it outright and up front.
  • Business credit lines: This lets a business draw cash when it needs it, and only pay interest on the amount borrowed.
  • Peer-to-peer lending: This is where private investors lend to your business through an online platform.

Advantages of short-term business loans

You may be keen to take the short-term borrowing route for the following reasons:

  • You pay less total interest, as you are paying interest for a shorter period of time.
  • You won’t be paying off a loan for long.
  • You may not need any security for the loan.
  • The approval process may be faster than with a long-term loan.
  • There may be less paperwork than with a longer borrowing agreement.
  • You may get quick access to capital, sometimes within just one to two days.

Disadvantages of short-term business loans

It’s sensible to properly consider if this is the right route for your business. As part of that, you should be aware that, when compared with longer term loans:

  • Interest rates can be higher.
  • They are a short fix, and not the answer to longer-term cash flow problems.
  • The lender may charge an early repayment fee if you pay the loan off sooner than the agreed term.
  • There may be arrangement fees for the loan.

Can I get a short-term business loan?

This will depend on your business and the lender, but you will need to meet the following criteria:

  • You are aged 18 or over.
  • You are the owner or director of a limited company registered in the UK.
  • Your business has a minimum monthly turnover.
  • Your business has a minimum trading time.
  • You have a business bank account.

The lender will want to consider your business financials, and will run a credit check to get a view of your business’s borrowing history and credit score, before deciding if it can offer the loan and the interest rate they will charge. The lender may also run a personal credit check.

The paperwork for short-term loans may be relatively light. But you will need to supply basic business information, including annual turnover, and will likely be asked to supply recent business bank statements. You will also need to state the purpose of the loan.

How can I compare short-term business loans?

You can use our comparison table to compare loans from business loan specialists. You’ll see what your business turnover and trading requirements must be at a glance. You can also see the range of term lengths and minimum and maximum amounts available.

Once you have chosen the borrowing that’s right for your purpose and business, you can go direct to the broker or lender and start your application.

Short Term Business Loans FAQs

How long is a short-term business loan?

Providers offer short-term business loans with terms that range from a month to a year. This is the period of time you will have to pay off the loan plus interest.

Why would a business use short-term loans?

You could be looking for funding for your business for a few reasons:

  • To help get your start up off the ground.
  • To help manage cash flow.
  • To help upskill staff with training.
  • To hire new staff.
  • For marketing and promotional purposes.
  • To secure expensive equipment to help your business expand.
  • To help cover an unexpected expense.

What is an example of a short-term business loan?

Businesses take out short-term loans for a wide range of reasons. One example could be where a business needs to buy stock and equipment to meet customer demand.

What are three types of short-term business financing?

Three routes to short-term finance could be invoice finance to borrow against unpaid invoices, tax loans to help your business pay a tax bill, and business credit lines.

Will I need a personal guarantee to get a short-term business loan?

Some providers that offer unsecured lending to limited businesses can sometimes ask for a personal guarantee from a director. This means that if the company can’t repay the loan, the director becomes liable. This isn’t always the case, though. So check the provider’s terms before you apply.

» MORE: What to know before signing a personal guarantee

About the author:

Holly champions clear, jargon-free writing. She’s been creating finance content for leading organisations for over 10 years. Read more

Compare Short Term Business Loans

5 products found
  • Love Finance Short Term Business Loans logo
    Broker

    Love Finance Short Term Business Loans

    • Apply for short term finance and borrow up to £250,000
    • Find out which short term offers you are eligible for without affecting your credit rating
    • Same-day funding available
    • Minimum Turnover
      £50,000 p.a.
    • Available Amounts
      £5,000 to £250,000
    • Available Terms
      3 months to 1 year
  • Funding Circle Short Term Business Loans logo

    Funding Circle Short Term Business Loans

    • Flexible, short-term business loans from £10,000 to £50,000 to help you manage cash flow
    • Only pay interest on the time you borrow — no fees and you can settle early at any time
    • 12 to 24 month terms — ideal for bridging gaps, boosting cash flow, buying stock and other short-term needs
    • Minimum Turnover
      £25,000 p.a.
    • Available Amounts
      £10,000 to £50,000
    • Available Terms
      1 to 2 years
  • Swoop Funding Short Term Business Loans logo
    Broker

    Swoop Funding Short Term Business Loans

    • Short-term business finance with terms up to one year
    • Secured and unsecured options available
    • Quick access to funds
    • Minimum Turnover
      £50,000 p.a.
    • Available Amounts
      £3,000 to £600,000
    • Available Terms
      1 month to 1 year
  • Funding Xchange Short Term Business Loans logo
    Broker

    Funding Xchange Short Term Business Loans

    • Discover instant & personalised short term finance offers for your business in just 3 minutes
    • Compare Business loan options from 45+ lenders, including exclusive deals, to save you time
    • Never pay more than direct & funding can be accessed in less than 24 hours
    • Minimum Turnover
      £100,000 p.a.
    • Available Amounts
      £1,000 to £250,000
    • Available Terms
      1 to 12 months
  • Cubefunder Short Term Business Loans logo

    Cubefunder Short Term Business Loans

    • Only available to Limited Companies in England and Wales with 3+ months' trading
    • Borrow up to £100,000 on a short term for any business purpose
    • No penalty fees, only pay for the time you use the loan
    • Flexible, tailored repayment schedule to fit in with your cash flow
    • Minimum Turnover
      £50,000 p.a.
    • Available Amounts
      £5,000 to £100,000
    • Available Terms
      3 months to 1 year
  • Suppliers that don't offer Short Term Business Loans but may offer suitable alternatives:

    • Nationwide Finance Business Finance logo

      Nationwide Finance Business Finance

      • Nationwide Finance help 35,000 businesses get finance each year
      • Direct funder - not a broker
      • Same day decision, funds within 24 hours
      • Minimum Turnover
        No minimum
      • Available Amounts
        £8,000 to £500,000
      • Available Terms
        1 to 5 years
    • Tide logo
      Broker

      Tide

      • Tide works with a number of partners who offer a range of flexible business funding solutions
      • They will run pre-eligibility checks, without affecting your credit score, to show you credit options tailored to your business
      • Connect your business bank account in minutes to see your credit options and receive a £75 Uber/Uber Eats voucher (Terms & Conditions apply)
      • Minimum Turnover
        Varies
      • Available Amounts
        £500 to £15,000,000
      • Available Terms
        1 month to 6 years
    • iwoca logo

      iwoca

      • Flexible finance for small businesses from £1,000 to £500,000
      • No long term commitments and flexible repayments to fit for your business
      • Apply online in minutes for a decision (some decisions may take up to 24 hours)
      • Minimum Turnover
        £50,000 p.a.
      • Available Amounts
        £1,000 to £500,000
      • Available Terms
        up to 24 months
    • 365 Business Finance logo

      365 Business Finance

      • Your business must process credit and debit card transactions to apply for this product
      • A flexible business funding alternative
      • Cash advanced against card transactions
      • Pay back an affordable % of your card transactions
      • Minimum Turnover
        £10,000+ card transactions per month
      • Available Amounts
        £10,000 to £300,000
      • Available Terms
        4 to 18 months
    • Fleximize logo

      Fleximize

      • YOUR BUSINESS MUST BE A LIMITED COMPANY WITH 6+ MONTHS' TRADING
      • Industry-leading flexibility - top-ups, repayment holidays, penalty-free early repayment, no set-up fees
      • Interest charged on reducing balance, not total loan amount - repay early and only pay for the time you had the loan
      • Apply online in five minutes, typically get a decision in 24 to 48 hours, receive funds the same day
      • Minimum Turnover
        £60,000 p.a.
      • Available Amounts
        £5,000 to £500,000
      • Available Terms
        3 months to 5 years
    • Capify logo

      Capify

      • Your business must have a minimum of 1 years trading history. No sole traders.
      • Superfast lending. Receive your funds the following day
      • All credit profiles are considered. Loans for any business purpose
      • Easy application process. Get conditionally approved in just 2 minutes
      • Minimum Turnover
        £120,000 p.a.
      • Available Amounts
        £5,000 to £500,000
      • Available Terms
        3 to 18 months
    • Lombard logo

      Lombard

      • Lombard offers a comprehensive range of asset finance solutions - specialising in business car finance
      • A simple finance solution with a credit decision in 24 hours for transactions up to £150,000
      • Security, guarantees or indemnities may be required. Product fees may apply. Finance is subject to status and is only available for business purposes
      • Minimum Turnover
        No minimum
      • Available Amounts
        £5,000 to £250,000
      • Available Terms
        1 to 7 years
    • Previse logo

      Previse

      • Previse Instant Advance is a fast cash flow facility, designed specifically to help businesses grow
      • Completely unsecured, no personal guarantees or security required
      • Available with a variety of short term lengths
      • Minimum Turnover
        £250,000 p.a.
      • Available Amounts
        £10,000 to £500,000
      • Available Terms
        3, 6 or 9 months

Our comparison service features a selection of providers from whom we receive commission. This table is initially ordered according to our commercial arrangements. You can use the options above the table to order it according to various criteria.

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