Short-term business loans
Most businesses will need to borrow money at some stage either to help with cashflow, or to pay for expansion costs, and a short-term business loan can provide the ideal solution. Although recent years have seen a reduction in the number of business loans on offer, there are still plenty of options available to explore.
The providers below are ranked by the following scenario; taking out a loan of £10,000 over 6 months. Ranked by the least you would need to pay back in total over the period.
Rates from 4.5% per year. Terms from 6 months – 5 years
Apply online get a decision typically in 24 hrs
You ll have a dedicated Account Manager from start to finish
Minimum criteria: Two years+ filed accounts at Companies House or formally prepared accounts for non-limited businesses.
Borrow up to 250,000 unsecured and up to 500,000 secured
Terms from one month – four years
If approved, funds are sent within hours of signing your agreement
Early repayment fees do not apply – repay early, pay less
Top-ups and payment holidays available after three months of successful repayments
Only see loans you are eligible for
Searching has no impact on your credit score
Service is completely free to use
Choose which providers you deal with
If approved, funds can be in your bank account within hours
Early repayment fees don t apply
How our site works
We want to show you short term business loans from as many lenders as possible, so you have plenty of choice. Not all lenders want to be included on comparison websites, so we can’t promise to show you loans from every single one. We’ve looked at how much it would cost to borrow £10,000 over 6 months, including fees, and we’ve ranked the lenders from the cheapest to the most expensive. You can find out more about how we work here.
Advantages of short-term business loans
The main advantage of opting for a short-term business loan is that you know your business will only have to make repayments for a limited period of time. You will also usually pay less interest overall than if you opted to repay what you owe over a much longer term, such as five years.
Disadvantages of a short-term business loans
Choosing to take out a short-term business loan may mean that you will be able to pay off what you owe quickly, but bear in mind that your repayments will be much higher than if you opted to repay your long over a medium or long-term period. Interest rates can be very high on short-term borrowing, so it’s worth comparing lots of different loans to ensure you find the right deal for your business’s needs.
What else you need to know
Difficult economic conditions in recent years have made it harder for businesses to borrow money. To apply for a business loan, your business may be required to have a minimum monthly turnover, and you may have to show a set number of accounts, usually two or more years.
Remember too that the actual rate of interest you will be charged on a short-term business loan will depend on your business’s individual circumstances, the amount you want to borrow, and over what period you intend to pay off what you owe.
Alternatives to a short-term business loan
If you don’t think your business will be able to pay off any borrowing over a year or less, then you might want to consider a medium or long-term business loan which can be repaid more slowly.
Other options include using a business credit card for any immediate expenses. These can also be a useful way to manage staff spending. You could also speak to the provider of your business bank account about arranging a business overdraft which can provide you access to funds as and when you need them. You can usually arrange an overdraft for a 12 month period, at which point it will have to be renewed.
Businesses can also raise funds though cashflow finance, which allows then to borrow against the value of their