Short-term business loans

Information verified correct on May 1st, 2017

Need urgent funds for your business? Apply for a short-term business loan and receive your money in as little as one day.

Whether you’re dealing with a temporary emergency or an unexpected cost upsurge in your business, you might need quick access to funds that you may not have. You may also need help covering unexpected operational costs, overcoming seasonal cash-flow gaps, dealing with emergency repairs or even taking advantage of unexpected opportunities.

In these cases, a short-term loan could be a good option for you to consider. The application process is swift and you can acquire your funds in as little as 24 hours.

NAB QuickBiz Loan

NAB QuickBiz Loan Offer

The NAB QuickBiz Loan allows you to borrow up to $50,000 for your business needs. The loan is available for new or existing business needs and features no upfront fee and tax deductible interest repayments. Link your accounting software directly into the application.

  • Interest Rate From: 13.85% p.a.
  • Interest Rate Type: Fixed
  • Application Fee: $0
  • Minimum Loan Term: 1 year
  • Maximum Loan Term: 2 year
  • Minimum Loan Amount: $5,000
  • Maximum Loan Amount: $50,000

Compare a range of business loans

Rates last updated May 1st, 2017
Min Loan Amount Max. Loan Amount Loan Term Application Fee
NAB QuickBiz Loan
An unsecured business loan from $5,000 that can be processed in 1 business day.
$5,000 $50,000 1 to 2 years $0 Go to site More
Prospa Business Loan
Apply for a business loan from $5,000 and enjoy a shorter loan term up to 12 months.
$5,000 $250,000 0.25 to 1 years $0 Go to site More
Bigstone Small Business Loan
Take advantage of a tailored rate and competitive financing from Bigstone’s business loans marketplace
$10,000 $250,000 2 years $0 until funding Go to site More
OnDeck Business Loans
Apply online for up to $150,000 with OnDeck and receive approved funds in one business day.
$10,000 $150,000 0.5 to 2 years $0 (2.5% origination fee) Go to site More
Moula Business Loan
Small business loans of up $250,000 approved and funded within 24 hours. Transparent fees and rates.
$5,000 $250,000 0.5 to 1 years $0 Go to site More

How does a short-term business loan work?

Short-term business loans are lump-sum loans ranging anywhere from $5,000 to $250,000 with terms ranging from anywhere between 3 and 12 months. They usually consist of daily repayments (sometimes weekly or monthly) and have quick turnaround times, with many lenders approving and funding your account within one day.

How can I tell if a short-term loan is right for my business?

Consider the following questions when deciding if a short-term loan is right for your business:

  • What do you need the money for?

Short-term business loans can help in many situations such as covering short-term operational costs. For example, you may need new equipment to help cover a massive order from a client, but you may not have the funding to purchase the equipment outright in time.

Short-term loans can also help with seasonal cash-flow gaps and emergency situations such as workplace accidents. In addition, they can help you take quick advantage of business opportunities requiring upfront funding that you may not have.

  • Are you able to meet repayment requirements?

With short-term loans, you’ll likely be making daily payments, which means you’ll need the necessary cash-flow to cover these payments. If you don’t, penalties and other fees will apply.

Generally, short-term loans are appropriate for businesses making high-volume daily transactions. Having lumpy turnover or long down periods means a short-term loan might not be for you.

What pros and cons should I weigh up?

  • Quick approval and access to funding. Short-term business loans have rapid assessment and approval processes, so it’s not uncommon to get your funds within one business day.
  • Taking advantage of business opportunities. Short-term loans allow you to take advantage of arising business opportunities because of the quick application process.
  • Covering cash-flow shortfalls and emergencies. These business loans can be a good option for covering temporary gaps in your accounts receivable, and for emergency situations calling for urgent funding.
  • High rates and fees. With short-term loans, lenders compensate the loss of long-term interest accrual with higher rates and fees.
  • Daily/weekly repayment schedules. Short-term business loans usually require daily repayments (sometimes weekly), which means that if your business isn’t getting a reliable daily influx of cash (such as retail shops or restaurants), you could have trouble repaying the loan.

What do I need to consider before I apply?

  • Cash flow projections. Lenders analyse your cash flow history and future cash-flow projections when studying your application. Since you’ll likely be making daily payments, your lender needs to make sure you have the necessary cash flow to cover such payments.
  • Business eligibility. Your lender also considers your credit history and how long you’ve been in business for. Generally, you’ll need to have been in business for 12 months.
  • Loan cost. Short-term business loans will likely have higher rates and fees than other alternatives. Make sure you’re well aware of the lender’s interest rates and other fees and work out whether you can afford them.
  • Turnaround time. Since you may need your funds within a certain timeframe, make sure your lender provides access to those funds within that time.

Questions you might still have about short-term business loans

When is a short-term loan not a good idea?

If you have lumpy turnover or long seasonal down-periods a short-term loan may not be for you. You must ensure you have the necessary cash-flow to make your frequent repayments.

What’s the best way to avoid missing payments?

Because you’ll likely have daily repayments, missed payment fees can accumulate very quickly. If you are concerned about making repayments, you have the option of setting up a dedicated account where you can deposit at least a month’s worth of repayments and simply top it up every month.

Will my lender come after my personal assets if my business defaults on the loan?

Most lenders require you sign a personal guarantee upon approval. This means you’ll still be liable for the loan if your business defaults.

Picture: Shutterstock

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