It only takes a few minutes
We’ll ask you a few straightforward questions about you and your business to help find the right deals. Rest assured: it won’t harm your credit score
You could consider a short-term business loan if you face emergency expenses. Whether you have to cover the costs of repairing your premises, tools, equipment, or fleet, short-term business loans can give you the financial boost you require to address your business needs promptly.
A small business loan may also be useful if your company experiences an interruption in cash flow. Or if your firm is presented with a promising opportunity, but you need some extra money to pursue it.
But whatever your reason for taking a short-term business loan, it’s always wise to ensure that you’ll have enough funds in your business bank account in the coming months to repay the borrowed money.
Quick approval: The approval process for shorter-term loans tends to be quicker than longer loans. It can often happen the same day
Less strict criteria: Short-term business loans are often seen as less risky for lenders, which means that the eligibility criteria are less stringent
More cost-effective: Repaying a business loan over months, rather than years, can mean lower interest to pay overall
Expensive instalments: Because you pay back the loan in a shorter period, the instalments are likely to be higher than a longer-term loan
Smaller loan amounts: You may find that the amount of money you can borrow is less than with longer-term options
Higher interest rates: Due to the speed and convenience of short-term business loans, you could end up paying higher interest rates
The loan application process for a short-term business loan should be relatively quick, and you may even be able to complete it within minutes.
Almost all small business loan applications can be undertaken online. To speed up the process, have all the relevant information to hand, such as the details for your limited company’s bank account.
Check the criteria of the loan before you make the application, as terms and conditions will differ. For example, you may be asked to provide a personal guarantee as a company director. Understand this before you begin the application process so it runs as smoothly as possible.
Having a poor credit score can hinder your chances of getting the best deals, but there are lenders who are still willing to offer you short-term business loans. Just bear in mind that because you have a bad credit history you may not be able to borrow as much as you would like. What’s more, you may have to pay higher interest rates and therefore larger regular instalments too.
The most straightforward way to repay a short-term business loan is to set up a regular direct debit, often monthly, to meet the repayment terms of the deal. This should ensure you never miss a payment and run the risk of incurring late or missed repayment fees.
If you find the business is cash-rich enough to repay the loan early, you may be able to save on interest payments. However, there are likely to be early repayment fees in place, so factor these in before making your decision.
If you’re struggling to keep up with repayments on the loan, contact the loan provider asap and explain your situation. They may be able to offer a more flexible repayment plan to help you service the loan, but keep an eye out for any additional charges this might bring.
Short-term business loans tend to cost more than other forms of business borrowing because a swift application process with less stringent eligibility criteria means lenders don’t have the opportunity to carry out in-depth checks. The price is increased to reflect the risk they are taking out by giving money to borrowers they don’t know well.
Lenders tend to offer short-term business loans to businesses which have already been trading for a while. However, this doesn’t mean that a new company cannot get access to short-term business funding – especially if your business is already making a decent profit. If you feel a start-up loan could be more suitable, our guide can help.
Yes, you can. However, you need to be the registered owner or director of the company you’re borrowing the loan for.
If you want to borrow quickly through your business, alternatives to a short-term business loan include:
Business credit card. As with a personal credit card, this gives you the ability to spend up to a certain limit. If you can get a 0% deal you will also have several months to pay it off before interest kicks in
Business overdraft. You could contact your bank to arrange a business overdraft, which means you can spend more than you have in your account.
The best option will depend on what’s right for your business, taking into account factors, such as the interest rate, and how much you’ll pay back overall.
APR stands for Annual Percentage Rate and is the interest rate you will pay back over a year once any fees and charges have also been considered. It is a way to represent the true cost of borrowing. The APR on business loans can vary depending on the type of loan, the current market situation, the provider, and the borrower’s credit rating.
There are no major differences between a short-term business loan and a traditional loan other than with a short-term loan you might
Pay it off more quickly
Receive the initial funds faster
Face a higher interest rate
Make weekly rather than monthly repayments
Approval times differ from provider to provider, but short-term business loans are generally approved more quickly than longer term deals for larger amounts. This could mean it’s approved in just a few minutes, with the money in your business account within hours.
If you’re unable to keep up with your repayments you are likely to face an additional charge and have to pay more interest on what you have borrowed. If you feel this situation could arise you should contact your loan provider as soon as possible to see if the loan can be restructured. They might be able to extend the term, meaning you can make lower monthly repayments (although you might end up paying more back in total). Being unable to make repayments will also damage your credit rating, making it harder or more expensive to borrow in the future.
You work hard to earn your money, and we don’t think you should waste a penny of it paying over the odds on your household bills. That’s why at MoneySuperMarket, we’re on a mission to save Britain money.
Whip your credit score into shape with Credit Monitor
Super save over and over again with Energy Monitor
There are always more ways to save with MoneySuperMarket
So how do we make our money? In a nutshell, when you use us to buy something, we get a reward from the company you’re buying from.
You might be wondering if we work with all the companies in the market, or if our commercial relationships with our partners might make us feature one company above another. We’ve got nothing to hide, and we want to give you clear answers when it comes to questions like these, so we’ve pulled together everything you need to know on this page.