Best Short-Term Business Loans of 2025

If you’re in need of a quick injection of capital to purchase inventory or cover payroll expenses, a short-term business loan can be a viable solution. Unlike long-term loans, which are typically used for larger investments or business expansion, short-term loans allow you to address immediate financial needs and repay the borrowed amount over a short period.

A short-term business loan is a
small-business loan
that typically has a shorter repayment period, ranging from three to 12 months — although some terms may go up to 24 months.

Short-term business loans can be useful for covering working capital needs and short-term expenses, paying for emergency expenses or taking advantage of an unexpected business opportunity.

Short-term business loans are generally structured as lump sums of capital that you pay back over a set period of time, or term. These loans are usually repaid on a daily or weekly basis, meaning you’ll make larger, more frequent payments than you would with a
long-term business loan
.

Short-term loans are most often issued by
online lenders
, which offer fast funding and streamlined applications. Compared with bank or Small Business Administration lenders, short-term lenders typically have more flexible qualification requirements and may work with startups or businesses with bad credit.

Short-term business loans generally have
higher interest rates
than longer-term loans or more traditional financing options. Interest rates can range anywhere from 10% to 99% APR.

And although some short-term lenders use an annual percentage rate, others might offer a simple interest rate, or even a
factor rate
. You should always calculate these rates (and fees) into an APR, as this makes it easier to compare products and is the best way to understand how much the loan costs.

Here are some of the most common types of short-term business loans:

A
business term loan
provides a one-time lump sum of cash that you repay over a set period of time, with interest, to the lender. Term loans can be used for a variety of purposes such as paying short-term expenses, investing in specific projects or making large purchases.

A
business line of credit
allows you to access capital as it’s needed for your business. After a lender approves you for a set limit, you have the flexibility to determine how much money to withdraw and when. You’ll make regular payments and pay interest on the funds you draw. Lines of credit can be a good option for working capital, cash flow gaps, seasonal slowdowns and
emergency funding
.

For business-to-business companies,
invoice factoring
can be an option for short-term funding. Invoice factoring involves selling unpaid invoices to a factoring company at a discount in exchange for a cash advance. The
factoring company
then assumes responsibility for collecting payment from your customers. It can be a good option if your business has a large amount of cash tied up in unpaid invoices.

A
merchant cash advance
(MCA) can be an option for a business that has substantial debit and credit card sales.
Business Loans Shortterm