8 Best Short-Term Business Loans For 2024 [Your Quick Guide]
Business finance can be challenging, especially when you’re looking for the best short-term business loans. In this article, we’ll dive into what short-term business loans are, explore various types, and unveil the top options available.
Whether you’re looking to boost cash flow or make a quick investment, we’ve got you covered. Let’s embark on this journey to find the perfect short-term financial solution for your business!
A short-term business loan is a type of financing designed to meet immediate financial needs for businesses. These loans typically have a repayment period ranging from a few months to a couple of years.
They are ideal for addressing urgent cash flow issues, managing unexpected expenses, or seizing quick business opportunities. Unlike long-term loans, short-term loans offer faster access to funds, enabling businesses to maintain operations smoothly.
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When it comes to securing the best short-term business loans, understanding the different types available can make a huge difference. Each type has its unique features and benefits, catering to various business needs.
Let’s delve into some of the most popular options, from business lines of credit to equipment financing, to help you decide which is right for you.
A business line of credit is a flexible financing option that acts much like a credit card. You are given a credit limit and can borrow funds up to that amount as needed. One major advantage is that you only pay interest on the amount you draw, not the entire credit limit.
Invoice financing allows you to borrow money against your outstanding invoices. This means if you have customers who owe you money, you can get a cash advance on those invoices rather than waiting for them to pay.
A merchant cash advance provides you with a lump sum of cash in exchange for a percentage of your future credit card sales. This can be an excellent option if your business has a lot of credit card transactions.
Small business term loans are a more traditional form of financing where you receive a lump sum of money that you repay over a set period. These loans usually come with fixed interest rates and monthly payments.
Equipment financing allows you to borrow money specifically to purchase business equipment. The equipment itself often serves as collateral for the loan.
This loan is perfect for businesses that need to buy, upgrade, or replace essential equipment to maintain or improve operations.
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It highlights various lenders that provide flexible loan options with short repayment periods, focusing on key features like interest rates, loan amounts, eligibility criteria, and approval times.
These loans are ideal for small businesses needing to manage cash flow, cover unexpected expenses, or seize timely opportunities. The guide helps entrepreneurs find suitable short-term funding options tailored to their business needs.
| Company | Description |
|---|---|
| Bluevine | Offers business lines of credit up to $250,000 with rates as low as 7.8% for top qualifying customers. Minimum annual revenue of $480,000 and 2 years in business required. |
| Fundbox | Provides business lines of credit and invoice financing. Minimum annual revenue of $100,000 and 6 months in business required. |
| OnDeck | Offers term loans from $5,000 to $250,000 with repayment terms up to 24 months. Over $15 billion delivered to U.S. businesses. |
| Headway Capital | Provides business lines of credit up to $100,000 with repayment terms of 6 or 12 months. Minimum annual revenue of $42,000 and 1 year in business required. |
| American Express® Business Line of Credit | Offers flexible financing with credit limits up to $100,000. Minimum annual revenue of $100,000 and 2 years in business required. |
| Fora Financial | Provides short-term loans and business lines of credit. Minimum annual revenue of $12,000 and 6 months in business required. |
| AltLINE | Offers asset-based loans and lines of credit. Minimum annual revenue and time in business requirements vary. |
| Expansion Capital Group | Provides short-term loans and merchant cash advances. Minimum annual revenue of $100,000 and 1 year in business required. |
Bluevine is a financial technology company that provides a comprehensive business banking platform designed to support small and medium-sized businesses (SMBs) with various financial services. While it is not a bank itself, Bluevine partners with Coastal Community Bank to offer FDIC-insured deposits.
The platform focuses on delivering low fees, easy money movement, and access to working capital, making it a popular choice among entrepreneurs.
| Pros | Cons |
|---|---|
| High interest rates on checking accounts | Limited physical branch access |
| No monthly fees or maintenance fees | Not a traditional bank |
| Easy online application process | May not suit larger businesses |
| Comprehensive financial tools in one platform | Limited to specific financial products |
Fundbox is a financial technology company that provides working capital solutions to small businesses.
By leveraging artificial intelligence and machine learning, Fundbox analyzes a business’s data to determine its creditworthiness and offers customized financing options.
| Pros | Cons |
|---|---|
| Fast and easy application process | Higher interest rates compared to traditional bank loans |
| Flexible repayment terms | Weekly repayment schedule may not suit all businesses |
| Integration with popular business platforms like Stripe | Limited to businesses with a certain level of creditworthiness |
OnDeck is a financial technology company that specializes in providing fast and flexible funding solutions for small businesses. Recognized for its efficiency in short-term loans, OnDeck offers a streamlined application process that allows business owners to access funds quickly without the need for a third party.
The company provides two main products: a line of credit and term loans, catering to various business needs.
| Pros | Cons |
|---|---|
| Fast funding process | Higher interest rates compared to traditional banks |
| No hard credit pulls | Limited to small business loans |
| Flexible repayment options | Requires a minimum personal FICO score of 625 |
| Direct access to funds without intermediaries | May not be suitable for very large loans |
| Tailored support from loan advisors | Annual revenue requirement of $100,000 |
Headway Capital is a private equity investment firm that specializes in providing flexible and value-added capital solutions to private equity managers and independent sponsors. With a focus on the lower middle market.
Headway partners with both emerging and established private equity firms to facilitate investments on a deal-by-deal basis.
The firm prides itself on its diverse team of investment professionals who bring extensive experience and strong networks to the table.
| Pros | Cons |
|---|---|
| Strong focus on the lower middle market | Limited to specific investment ranges |
| Flexible capital solutions | May not cater to larger market segments |
| Extensive experience and network | Potentially higher risk in lower middle market investments |
| Diverse team with complementary skills | Dependence on the performance of GPs |
| Proven track record with 140 transactions | The competitive market for attracting GPs |
American Express® Business Line of Credit offers a Business Line of Credit designed to provide flexible financing options for small to medium-sized businesses. This product allows business owners to access funds as needed, helping them manage cash flow, invest in growth opportunities, or cover unexpected expenses.
The line of credit is revolving, meaning businesses can borrow, repay, and borrow again, which provides a level of financial agility.
| Pros | Cons |
|---|---|
| Flexible borrowing and repayment options | May require a good credit score |
| No annual fees | Interest rates can be high for some users |
| Quick access to funds | Limited to certain business types |
| Online management tools | Not suitable for very large financing needs |
Fora Financial is a financial services company that specializes in providing working capital solutions to small and medium-sized businesses. Established in 2008, the company has supported over 55,000 businesses by offering fast, reliable funding options that help them manage cash flow, expand operations, and invest in growth.
Fora Financial’s approach emphasizes understanding the unique challenges faced by businesses, focusing on their growth potential rather than solely on credit scores.
| Pros | Cons |
|---|---|
| Fast access to capital (within 72 hours) | Higher interest rates compared to traditional loans |
| Flexible repayment structure | Minimum revenue requirements may exclude some businesses |
| Focus on growth potential over credit scores | Limited to certain industries for funding |
| Simple online application process | May require personal guarantees |
| Established a reputation with over 55,000 clients | Not suitable for startups without sufficient revenue |
AltLINE, a service offered by The Southern Bank, specializes in providing receivable-based funding solutions designed to help businesses improve their cash flow. By offering services like invoice factoring and freight factoring.
Altline enables companies to convert their unpaid invoices into immediate cash, thus alleviating financial pressure and supporting operational growth.
| Pros | Cons |
|---|---|
| Direct funding source from a bank | May not be suitable for businesses with strong credit history seeking traditional loans |
| Quick access to cash through factoring | Costs associated with factoring can add up over time |
| Flexible solutions tailored to various needs | Reliance on customer payments can be risky |
| No lengthy application processes | May require a certain volume of invoices to be effective |
Expansion Capital Group is a financial services company focused on providing funding solutions to small businesses in the United States.
They offer a range of products designed to help businesses reach their full potential and take advantage of growth opportunities.
| Pros | Cons |
|---|---|
| Fast and simple application process | Minimum credit score requirement of 500 |
| Quick turnaround on quotes and funding | Repayment terms may be less favorable than traditional bank loans |
| Flexible funding amounts to suit various business needs | Potential for higher interest rates or fees compared to traditional financing |
| Customized solutions tailored to each client’s needs |
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Securing a short-term business loan may seem challenging at first, but with the right approach, it can be a smooth process. Let’s dive into the steps to help you get the funds you need for your business.
Short-term business loans can seem daunting, but with a clear understanding, it becomes manageable. These loans can offer quick financial relief, helping businesses seize opportunities and overcome challenges. From business lines of credit to equipment financing, various options cater to different needs.
Assessing your business requirements and exploring these loan types ensures you make an informed decision. Remember, the right loan can significantly impact your business’s growth and stability. If you found this guide helpful, explore more insightful blogs on our site to empower your business journey!