Best Short Term Business Loans

A short term business loan is designed to meet your immediate financing needs. It can help you bridge gaps in cash flow, deal with unexpected expenses, and take advantage of new business opportunities to increase your revenue. Instead of diverting funds from other areas, a short term business loan can cover your costs while maintaining your normal cash flow.

Term Loan or Line of Credit

There are a number of online lenders that offer both term loans and lines of credit using your personal credit as opposed to your business credit. The amount they will lend varies based on your creditworthiness, business history, and your history with them. Term loans typically have set payment terms, a set amount of money you receive at the time of signing, and varying fees and interest rates. A line of credit allows you to borrow money as needed, and repayment terms fluctuate based on how much you have drawn from the line of credit. While these may sound attractive, they also have high interest rates, origination fees, and your payment is due every payment cycle (daily, weekly, monthly), regardless of your revenue in that given cycle.

Business Credit Cards

Using a business credit card for short-term borrowing can be a quick and convenient solution to cover immediate expenses. However, it is not always the most ideal option due to the high interest rates that typically come with credit cards, especially if the balance is carried beyond the grace period. Additionally, credit cards can have lower credit limits compared to other financing options, which might not be sufficient for larger financial needs. If the balance isn’t paid off promptly, interest charges can quickly accumulate.

Revenue Based Financing

Revenue-based financing is a type of funding for businesses that provides access to an upfront sum of working capital in exchange for a portion of the business’s future revenue. The business then remits payment to the revenue-based financing provider according to a payment schedule (typically daily or weekly), until a total amount, agreed to upfront, has been paid in full. And the total amount is fixed, even if it takes longer to pay. This type of loan can be appealing because payments can fluctuate to match revenues. That means you’re not stuck making larger payments if your business goes through a slow period.

What Financing Is Right for Your Business?

The short term business loan that best suits you depends on many of the factors mentioned above. For most businesses that have been operating for at least 12 months, revenue-based financing may be the best option for short term business needs. There are some experienced, reputable revenue-based financing providers, like Forward Financing, that can help you access working capital. To learn more about this fast, flexible funding solution, visit What Is Revenue-Based Financing.