The Short Term Business Loans of 2021 That You Need to Know About

Sarah Pritzker
The best-short term business loans compared
A short term business loan can take a variety of forms. Generally, traditional short term business loans are term loans that need to be repaid within a few months or up to 3 years.

A merchant line of credit loan permits businesses to draw on a flexible credit line up to the maximum agreed upon amount but needs to be repaid within weeks rather than months. Accounts receivable loans give advances against outstanding unpaid invoices. A short term business loan is usually approved quickly, with funding coming in within a few days, and isn't secured against any particular assets.

On average, short term business loans carry between 7% to 30% APR each month. Repayment terms are usually between 3 and 36 months, although some can be as short as just a few weeks. Some short term business loans do come with early repayment charges. Short term business loans are good for businesses that need extra capital for a short period of time like to cover stock expansion ahead of a busy shopping season. They are also great for covering an unexpected shortfall, meeting emergencies, or taking advantage of a business opportunity when the business needs the funding in a hurry. However, since rates tend to be higher than long-term business loans they can be risky, so only take on a short term loan if you are sure that you can pay it off within the term.

What to Look for When Choosing a Short Term Business Loan?

  1. Repayment fees: If you’ve decided that a short term business loan is the best solution for your company right now, then there are certain things to look for. Because short term loans usually carry higher interest rates, you’ll want to pay it off as fast as possible so look for a loan without any early repayment charges.
  2. Repayment schedule: Some short term lenders want repayments to be made daily or weekly rather than monthly, which could pose a challenge to your cash flow. Another issue is that many lenders allow you to renew your loan as soon as you’ve paid it or even when you’ve paid off just the majority of the amount. This can seem like a plus if you need more financing, but it can also turn into a temptation to keep on borrowing more without ever fully throwing off your debts.

Which Is the Right Short Term Business Loan for You?

1. LendingTree

  • Borrow from $2,000 up to over $300,000
  • APR from 6%
  • Term 3-18 months

LendingTree operates as a loan provider marketplace to connect businesses that need short term funding with reputable lenders. By using LendingTree, you'll be able to save time and energy hunting for the most suitable loan offer. LendingTree also offers a number of different short term business loan options so that you can pick the one that suits your situation. You just complete one application online, which asks some basic questions about your business history and financial stability, and then LendingTree shares that information with a number of reliable lenders. Within a few minutes, you'll receive pre-approved loan offers from up to four loan providers. LendingTree helps you along by facilitating easy comparison between the offers.

Because LendingTree is a loan marketplace rather than a direct lender, it can’t tell you what your APR is likely to be. Similarly, all fees and charges, as well as repayment conditions like early repayment fees, are set by the lender you choose. To apply for a loan through LendingTree you’ll need to have been in business for at least 12 months and have a monthly revenue that averages $8,000 or more, but there is no minimum credit score.

Read the full LendingTree business loans review.

LendingTree LendingTree Get Rates

2. Lendio

  • Borrow from $1,000 to $1 million
  • APR up to 30%
  • Term from 1 to 5 years

Lendio is a loan provider aggregator that helps connect small businesses that need funding in a hurry with investors who loan to small businesses. Going through Lendio for a short term business loan is ideal for businesses that have not been in business for very long. It also saves you time by sharing your loan requirements with over 75 lenders and loan providers from just 1 application. In addition, Lendio offers 10 different types of long and short term funding for businesses, which makes it likely that you'll find a loan type to suit your financial situation. Applying for Lendio is straightforward and done entirely online via a short questionnaire. Once you've completed that, Lendio will match you with the best lender for your needs, who will ask you more detailed questions and ask to see copies of various financial and business documents.

Lendio doesn’t charge any fees for helping you to find a loan, but you might be charged by the loan provider. Penalties, early repayment charges, and other fees are all set by the lender. To apply for a loan through Lendio, you'll need to have at least 6 months in business and an average revenue of $10,000 or more per month for the past 6 months. There's no minimum credit score.

Read the full Lendio review.

Lendio Lendio Get Rates

3. BFS Capital

  • Borrow from $4,000 to $500,000
  • APR from 5%
  • Term from 4 to 18 months

BFS Capital specializes in helping small businesses get access to short term funding through either short term business loans or merchant cash advances. It’s ideal for small businesses that are having issues with their cash flow or need extra working capital in a hurry to expand their stock or take advantage of a business opportunity. Applying for a loan through BFS Capital is done entirely online, where you’ll provide basic information about your business history and financial situation. After you sign the loan agreement, funding can come through as early as the next business day.

BFS Capital does charge an origination fee of 1.5% of the total loan, but repayments can be made daily or weekly on a flexible schedule without any early repayment fees. To apply for a short term business loan, businesses need a minimum credit score of 600, to show at least 2 years of business history, and to have an average monthly revenue of $15,000.

Read the full BFS Capital review.

BFS Capital BFS Capital Get Rates

4. Torro

  • Borrow up to $750,000
  • APR rates up to 36%
  • Term is not listed

Torro is a loan provider marketplace and matching program that connects lenders with businesses that need extra working capital or wish to expand. It provides cash advances, accounts receivable, and asset financing loans as well as short term business loans to startups and established businesses. Borrowing from Torro is particularly attractive to businesses that only recently got started or are still trying to get off the ground since there is no minimum requirement of time in business. Applying through Torro is easily done online through a simple questionnaire about your basic business details and financial transactions. Once you’ve applied, Torro will email you with a list of matching lenders, and you can continue the application directly with the one that suits you best.

Torro doesn’t appear to charge any fees itself, but there can be fees levied by the lender that you go with so read the small print. Penalties, repayment charges, and other fees are also set by the lender rather than by Torro. Torro also doesn’t demand any minimum time in business or ask for a minimum credit score, but you will be asked for an average monthly revenue of $15,000, if relevant.

Read the full Torro review.

Torro Torro Get Rates

5. Leaders Funding

  • Borrow from $5,000 to over $1,000,000
  • APR rates are not listed
  • Multiple term options which aren’t listed on the site

Leaders Funding acts as a go-between for businesses that need working capital in a hurry and the reputable lender, Wells Fargo. Leaders’ Funding helps shorten the application process to a well-known lender so that businesses can have the reliability of borrowing from a bank together with the swift response time and simple application of online lenders. Applying for a loan with Leaders Funding can be done online or over the phone. The application just asks seven basic questions about your business and financial standing before making a pre-approved loan offer, but you will be asked for more details and documents before the loan is closed.

Leaders Funding doesn’t provide concrete information about the average APR rates available or the length of the term, mainly because there are so many rates and term options depending on your business needs and financial situation. You’ll need to have a minimum business history of twelve months and average monthly revenue of at least $10,000, but there’s no minimum credit score.

Read the full LeadersFunding review.

Leaders Funding Leaders Funding Get Rates


Short term business loans are an easy way to get access to working capital in a hurry when you need to cover temporary cash flow issues or take advantage of a great business opportunity. Each of the five loan providers we’ve profiled here can fix you up with a competitive short term business loan.

Sarah Pritzker
Sarah Pritzker is a content writer with years of experience and a keen interest in the vast world of online consumer products. She enjoys helping readers make sense of the options on the market in a variety of fields.