Short Term Loan

With a short-term small business loan, you are lent a set amount of capital upfront, which you quickly pay back (along with fees) over a short period of time.

Maximum Amount of Loan

$2.5K- $250K



3-18 Months


Interest Rates

Starting at 10%



As quick as 1 day


Learn More

What is a Short Term Loan?

Short-term loans are lump sum loans that are designed to be paid back in less than 18 months. They can be a flexible financial tool that are best used for financing short-term needs such as  managing cash flow, dealing with unexpected needs for extra cash, or taking advantage of unforeseen business opportunities.


  • Set payment structure
  • Limited paperwork
  • Bad credit is accepted
  • Suitable for a wide range of business purposes


  • Annual costs higher than those of longer-term loans
  • Weekly payments could prove difficult to make for businesses with sporadic revenue


Who Qualifies for Short Term Loans?

Short-term lenders emphasize cash-flow more than lenders of traditional term loans. Strong cash-flow can sometimes overcome other financial information that would disqualify a business for a traditional term loan.

But you should be aware that the interest rate you’ll pay and the amount you can borrow will depend on your annual revenue, business history, and personal credit rating.


Most Customers Who Were Approved Had

Annual Revenue

over $150k

Credit Score


Time in Business

Over 2 years


How to Apply

Short-term loans are exclusively applied for online. For that reason, a short-term loan application is a fast and easy process. You’ll likely need to provide just your credit score, bank statements, and tax returns. Most short-term lenders can fund borrowers just a day or two after they apply.

You Will Need These Documents

  • Driver’s License
  • Voided Business Check
  • Proof of Ownership
  • Bank Statements
  • Credit Score
  • Personal Tax Returns


How Do Short Term Loans Work?

Sometimes your business just needs extra cash—right away.

Can you actually get financing that fast?

Common Funding helps businesses get funding in all shapes and size, including loans that make it to your bank account before you know it.

Let’s take a closer look at how these smaller short-term loans can make a major difference when you need capital in a hurry.


The Fundamentals

Short-term loans work like traditional term loans: predictability is the mainstay of this type of loan.

It’s a straightforward loan product.

You receive a set amount of cash upfront that you agree to pay back, along with the lender’s fees and interest, over a predetermined period of time.

With short-term loans, loan amounts may be smaller, the repayment period drastically shorter, interest rates higher, and you often pay the lender back on a daily or weekly instead of monthly schedule.

However, they’re usually easier to qualify for, faster to apply for, and quicker to fund.

Do keep this in mind, though: short-term loans are some of the most expensive loans available to small businesses.

Why do they come with such high interest rates?

The speed and ease of application makes a short-term loan deal riskier for the lender. They spend less time vetting your business and checking that you’ll be able to pay back on time and have a history of doing so. Because short-term loans tend to fund for riskier borrowers, they tend to have more expensive interest rates.

Although they make sense in many situations, the best loan for your business is always the lowest-cost loan. Do your research, apply for a few different loan types, and if it comes down to it, make sure your business has a clear plan on how it will pay back short-term debt.


When is a Short Term Loan Good for You?

It takes money to make money. Anyone who runs a small business knows this to be true. That makes access to working capital essential—whether you’re just starting out or have big plans to expand your existing business.

Just about every business needs extra working capital from time to time. When that’s the case, a short-term loan might be your best option.

If you have the opportunity to fill a massive order for a customer who can pay you in 60 days, but your supplier needs to be paid in a week? Without access to cash, you might have to pass up that golden opportunity.

With a short-term loan, you could get the funding you need to fill that order—and then pay your loan back when your customer pays you.

Perhaps you have a seasonal small business that needs an influx of capital just before the holiday season. Getting a short-term loan would give you the funding to cover promotional expenses and build your inventory well before the holidays—even though you might be short on cash right now.

Other businesses find that a short-term loan is a great way to fund business expansion, refinance other short-term debts at more favorable terms, pay upcoming taxes, put extra cash into their business to take advantage of new opportunities, or meet any short-term financing need.

Fast financing gives you the flexibility to spend how you need.


What Will a Short Term Loan Cost?

Short-term loans are paid off quickly, most often with daily payments.

This means you don’t have to worry about that debt for too long.

However,  repaying a short-term loan in daily or weekly installments could cut into your cash flow.

Short-term loans also often come with factor rates instead of interest rates: a factor rate is a number that, when multiplied by your total loan amount, gives you how much you’ll be paying the lender back.

This we can explain with an example.

Short Term Loans & Factor Rates

Suppose you’ve taken out a $100K short-term loan and the lender has a 1.18 factor rate.

1.18 multiplied by $100K is the total amount you’ll need to pay back: $118K.

Then we’ll assume your lender will want you to pay back the total amount in 12 months, like with most short-term loans.

Given that there are 22 payment days in a month, that’s 264 payments you’d have to make.

And how much are you paying out every day for this loan?

The amount of each of those payments would be $446.96, making your actual APR 33.54%—quite a bit higher than the rates for traditional term loans.


Why Do Short Term Loans Cost More?

You’re paying the price for speed and convenience.

Higher rates and shorter terms are able to generally offer reduced paperwork and faster funding times than traditional term loans.

But expensive debt can be better than no debt if your business needs the money to take advantage of an opportunity. Assuming you know you can afford to pay it back. Just because they’re pricey, short-term loans don’t need to be a bad investment.

Sometimes a short-term loan is exactly what your business needs to grow.

Short-term loans can also be refinanced into longer-term products down the road if your business’s financials improve.