A short term business loan is a business loan that has a term of anywhere between three to 12 months.

Businesses often use short term loans to cover for temporary cash flow shortfalls, or to get additional finance to expand the business.

How to get the best short term loan

You need to find a lender that can offer you a business loan for the lowest Annual Percentage Rate (APR) over the term you want to repay the money over.

This comparison shows each lender's representative APR, but you are not guaranteed this rate if you apply

Your business has a credit record, which will affect whether a lender can offer you their advertised APR, or offer you a loan at all.

Here is how business loans work

What are the different types of short term business loans available

There are a few different types of short term business loans available that offer different features.

  • Term loans: Terms loans are essentially personal loans for businesses. You pick the amount you need and decided on how long your business needs to pay it back at a fixed interest rate.

  • Asset financing: Asset finance uses a company's assets, for example equipment, machinery, or property, as a security to borrow money. While this make allow your business to borrow more or get a lower interest rate, it does put the assets at risk.

  • Invoice financing: It's a way to borrow money for your business, using the value of your unpaid invoices as security.

How to choose the right short term loan for your business

Before you apply for a short term business loan online, you need to find out:

  • How much you need to borrow: Only borrow what you need to avoid paying unnecessary interest. Some lenders may not offer the loan amount you need, and those that do will charge you interest each day until you repay it.

  • How long you want the loan for: The longer the loan takes to pay off, the more you pay in interest. Check how much it costs per month to repay your loan, and if you can afford to pay back more then reduce the term of the loan.

Try not to over stretch yourself financially when you apply for a short term business loan. If you miss any payments the extra interest you get charged could end up costing you hundreds.

Use this comparison to find a business loan that lets you borrow for the term you want.

What other options are there?

Short term business loans can give you the cash injection you need, but your repayments are likely to be higher compared to borrowing the same amount over a longer term.

If you want to keep your repayments as low as possible, compare business loans with longer terms here. However, a longer term may reduce your monthly repayments, but you will pay interest for a lot longer too.

If you need to borrow a small amount, you could consider a business credit card to spread your payments over a term of your choosing, however you will still pay interest on what you spend.

Short term business loans FAQs


What is the shortest business loan I can apply for?


Some lenders offer business loans from 1 month. Use this comparison to find the terms each lender offers on their loans before you apply.


Can I apply for a business loan in my own name?


To be eligible to apply for a business loan, you usually need to be the owner of the company or a registered company director.


Can I take a payment holiday with a short term business loan?


No, you have to make each loan payment each month or you could face large interest penalties.


Do I need a business account to apply for a business loan?


Some lenders require you to have a business account with them to qualify for a business loan, but some may be more flexible so ask before you apply.


Does my business have a credit record?


Yes, you can find it using a company like Experian. A poor credit record can cause your loan application to get rejected, so check before you apply.

About our short term business loans comparison


Who do we include in this comparison?


We include short term business loans available directly from lenders and through brokers on our panel. Here is more information about how our website works.


How do we make money from our comparison?


We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.

You do not pay any extra and the deal you get is not affected.

Last updated: 23 February, 2021