Short-term business loans

Most businesses will need to borrow money at some stage either to help with cashflow, or to pay for expansion costs, and a short-term business loan can provide the ideal solution. Although recent years have seen a reduction in the number of business loans on offer, there are still plenty of options available to explore.

The providers below are ranked by the following scenario; taking out a loan of £10,000 over 6 months. Ranked by the least you would need to pay back in total over the period.

Short-term business loans

    • Provider/Product name Business Loan

      Funding Circle

      Business Loan

    • Description

      UK’s leading peer-to-peer business lender

      Fast and simple business loans from £5k to £1 million - without the banks.

      Borrow from a community of thousands of people together with the Government-backed British Business Bank, local councils and universities.

      Quick & convenient process:
      > Check your eligibility in one minute
      > You'll hear from Funding Circle within two working days of completing your application 
      > Loan terms from six months to five years. No early repayment charge.

      Flexible loans: borrow for working capital, expansion, property, asset purchase and one-off business expenses.
      Now open for non-limited companies (sole traders and partnerships) to apply for a loan.

      Business Funding Scheme - Local Government is lending millions through Funding Circle to support UK businesses.

    • Go to site

    Minimum criteria: Two years+ filed accounts at Companies House or formally prepared accounts for non-limited businesses, minimum turnover of £50k and a good credit score.

    • Provider/Product name Business Loan

      Fleximize

      Business Loan

    • Description

      Fleximize provides fast and flexible business loans to growing businesses. The online application takes minutes and loans can be approved in as little as 24 hours.


      > Borrow £1,000 - £200,000 for 1 - 24 months
      > If approved, funds are sent within hours of signing your agreement
      > Early repayment fees do not apply
      > Top-ups and payment holidays available after 3 months of successful repayments

      All applicants will have their own dedicated relationship manager. All business types are welcome including Sole traders.

       

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    Min Criteria: Available to Limited Companies and Limited Liability Partnerships. Must have at least 6 months trading history. Minimum turnover of £1,000 per month. Applicants will need to supply documents to support application.

    • Provider/Product name Business Loan

      iwoca

      Business Loan

    • Description

      iwoca provides flexible credit facilities to businesses across the UK, allowing them to manage their cash flow and invest in new opportunities.

      > Borrow up to £100,000 for up to 12 months
      > If approved, funds can be in your bank account within hours
      > Early repayment fees don't apply

      Sign up for free in less than 10 minutes. There’s no commitment until you take the funds and there are no upfront fees or minimum terms.

       

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    Min Criteria: iwoca works with all types of business including startups. You must be 18+ and a UK resident. Funding subject to approval. Terms and conditions apply.

    • Provider/Product name Business Loan

      Everline

      Business Loan

    • Description

      Everline, form part of the UK’s largest business e-lender having provided over £90 million and over 8,000 loans to help small businesses turn opportunities into reality since 2012. Limited companies, limited liability partnerships, partnerships and sole traders can access £3,000 – £120,000 of working capital for up to 24 months. The typical annual cost of a loan is 11%-30% depending on an individual risk profile and there are no fees for re-paying early. Interest is only ever charged on the outstanding loan amount and for as long as the money is borrowed.

      • Borrow up to £120,000
      • If approved, funds are sent within minutes
      •  Early repayment charges don't apply

      Everline’s fully automated smart lending platform cuts through old-fashioned underwriting practices by linking directly to thousands of business data points, such as Cloud based accounting services, eBay accounts, tax reports and bank statements, to make fast and fair lending decisions based on how a business is performing right now. Because the technology does all the legwork, the application process only takes around 10 minutes to complete for new customers and lending decisions are usually made within one hour of an application being submitted. If approved, the working capital funds are then paid into the businesses bank account within minutes.

    • Go to site

    Eligibility: You must be over 18 and a director / owner / partner of the company. Your business is a UK Limited Company, Limited Liability Partnership, Ordinary Partnership or Sole Trader and has been trading for over 12 months with an annual turnover of at least £100,000.

    • Provider/Product name Business Loan

      ezbob

      Business Loan

    • Description

      ezbob is a fast and flexible unsecured business loan option for businesses looking to grow. The application takes less than 10 minutes to complete with approvals in less than one hour.

      > Borrow up to £120,000 for 24 months
      > If approved, funds are sent within minutes
      > Early repayment fees do not apply

      Applicants need to provide last five quarters of vat reports or, if vat exempt, bank statements for 12 months in CSV format. Company should be trading for at least 12 months with £10,000 or more in turnover.

      EU Funded - Chosen by the European Investment Fund (EIF) to be a certified EU financial intermediary under the EPMF Guarantee scheme

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    Partners with the British government and the EU

    • Provider/Product name Business Loan

      Boost Capital

      Business Loan

    • Description

      Boost Capital provide fast and flexible unsecured finance options to businesses across the UK.

      Boost Capital have over 14 years of funding businesses and can fund most business types.

      Borrow from £3,000 to £500,000
      - Fast and simple application
      - Once approved, funds are sent in as few as two days
      - Early repayment fees do not apply
      - No set-up or admin fees

      The funds can be used for any business use including working capital, expansion, stock, equipment, renovation to name a few. Boost Capital understand that each business is different and therefore look at every business for their individual merits.

    • Go to site

    Trading for minimum of nine months. Minimum average monthly gross sales of £5,000 is required.

Short-term Business Loans

A short-term business loan can be invaluable for businesses that need a cash boost if they are expanding, or if they need a bit of extra help to manage their cashflow.

This type of loan usually has a term of six-months, so will need to be repaid quickly. You can usually choose a fixed rate of interest, so you know repayments will be the same every month, or a variable rate, which could mean your repayments change over time.

Advantages of short-term business loans

The main advantage of opting for a short-term business loan is that you know your business will only have to make repayments for a limited period of time. You will also usually pay less interest overall than if you opted to repay what you owe over a much longer term, such as five years.

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Disadvantages of a short-term business loans

Choosing to take out a short-term business loan may mean that you will be able to pay off what you owe quickly, but bear in mind that your repayments will be much higher than if you opted to repay your long over a medium or long-term period. Interest rates can be very high on short-term borrowing, so it’s worth comparing lots of different loans to ensure you find the right deal for your business’s needs.

What else you need to know

Difficult economic conditions in recent years have made it harder for businesses to borrow money. To apply for a business loan, your business may be required to have a minimum monthly turnover, and you may have to show a set number of accounts, usually two or more years.

Remember too that the actual rate of interest you will be charged on a short-term business loan will depend on your business’s individual circumstances, the amount you want to borrow, and over what period you intend to pay off what you owe.

Alternatives to a short-term business loan

If you don’t think your business will be able to pay off any borrowing over a year or less, then you might want to consider a medium or long-term business loan which can be repaid more slowly.

Other options include using a business credit card for any immediate expenses. These can also be a useful way to manage staff spending. You could also speak to the provider of your business bank account about arranging a business overdraft which can provide you access to funds as and when you need them. You can usually arrange an overdraft for a 12 month period, at which point it will have to be renewed.

Businesses can also raise funds though cashflow finance, which allows then to borrow against the value of their unpaid invoices, or they can borrow against their assets such as any equipment or property.

Moneysupermarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.

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