The 5 Best Short-Term Loans For Small Businesses

Whether you need $5,000 or $250,000, OnDeck offers short-term loans and lines of credit to businesses in need of fast cash. If your loan application is accepted, you may be able to access your funds within the same business day.

OnDeck’s short-term loans do not charge interest in the traditional sense. Instead, you’ll pay a factor rate for your loan — a fixed fee that is calculated when you take out the loan. With OnDeck’s short-term loans, this rate will come out to about 0.4%-0.42% of your borrowing amount per month, depending on your term length and creditworthiness. Payments are required on a daily or weekly basis.

OnDeck also offers revolving lines of credit that run from $6,000 to $100,000. Term lengths are 12 months per draw, there are no draw fees, and you can repay early without facing any penalty. Time to approval is quite quick, just as it is with OnDeck’s short-term loans. If and when you’re approved, you’ll be able to start withdrawing funds immediately.

Sporting relaxed credit score requirements, Fundbox’s business lines of credit are accessible to a wide range of business owners. With a minimum required credit score of just 500, businesses with credit scores that might disqualify them in the eyes of other lenders may still qualify for a Fundbox line of credit.

Fundbox’s lines of credit are offered for up to $150,000, and repayments are made in equal installments over 12 or 24 weeks. The borrowing fee begins at 4.66% for 12-week terms and 8.99% for 24-week terms, and there is no prepayment penalty. If you’re approved, funds will be deposited into your business bank account within one or two days of your withdrawal request. There are no draw fees or money transfer fees. Note that before applying, you’ll need at least three months of transactions in a business bank account or at least two months of activity using compatible accounting or invoicing software.

Fundbox’s easy borrower requirements and fast funding come with a catch: Rates and fees can be on the high side.

Credibly offers a variety of business funding products. Its merchant cash advance service and business lines of credit are the products best suited to businesses needing quick cash. The company offers working capital loans, business expansion loans, equipment financing, and invoice factoring.

Credibly’s merchant cash advances (MCAs) offer up to $400,000 in funding, and just as with a small business short-term loan, a factor rate is used to determine the cost of financing. For payment, Credibly automatically debits a percentage from either your business bank account or your credit card processor every day. These MCAs don’t have set terms, but the anticipated duration of the repayment period is three to 18 months. Unfortunately, there is a $50 monthly administration fee.

Credibly’s revolving business lines of credit have more relaxed revenue requirements than the company’s MCAs ($50K/year versus $15K/month) but steeper credit score requirements (560+ versus 500+). Both require at least six months of business history. An approval decision should come within 24 hours of your application submission. After approval, you should get access to up to $250,000 in funding within the same day. The company offers both unsecured and secured lines of credit.

Lendio is a business financing platform that aggregates loan offers from lenders and matches them to its customers. The platform matches its users to short-term loans along with a wide variety of other business financing products, including business lines of credit, business term loans, merchant cash advances, and accounts receivable financing.

Lendio’s loans for short-term funding run from $2,500 up to $500,000. Loan terms range from one to three years, and factor rates start at 8%. Origination fees and collateral requirements will vary depending on the individual lender you’re matched with. Repayments will be required daily or weekly.

While the specific borrower requirements will vary depending on which of Lendio’s lending partners you get matched with, Lendio recommends that you have a personal credit score of at least 550 and monthly business revenues of at least $10,000 before applying.

LendingClub is a peer-to-peer lender specializing in personal loans that can be used for business. If you require $40,000 or less in funding and have a low credit score and/or have not established a business revenue track record yet, LendingClub’s personal loans might be just the ticket for you.

If you apply for a personal loan and are approved, LendingClub will send you a few different lending options. For the most part, loans with long term lengths will have higher interest rates but lower monthly payments, while loans with short term lengths will have lower interest rates but higher monthly payments. Unfortunately, along with interest, LendingClub also charges an origination fee of between 1% and 6% of your borrowing amount.

LendingClub also offers business term loans of up to $500,000. Terms run from one to five years. You’ll need at least a year of business history and at least $50K in annual revenue.