A short-term business loan is financing you repay over roughly 3 to 18 months, usually with daily, weekly or monthly payments, and it is built for needs that pay for themselves quickly. Short-term loans for small businesses come in four main forms: installment loans from online lenders, revenue-based financing (often called a merchant cash advance), business lines of credit and invoice financing. Each is priced and repaid differently, so the useful comparison is the total you pay back and how often a payment leaves your account. Through Today Capital Group, revenue-based financing runs from $5,000 to $2,000,000 and is typically funded within one to two business days of choosing an offer, and lines of credit go up to $250,000.
What counts as a short-term business loan
There is no legal definition, but lenders and funders generally use the term for money that is repaid in under a year and a half. That sets it apart from bank and SBA loans, which run for years. The SBA's 7(a) loan program, for example, covers short- and long-term working capital, equipment and real estate with loans up to $5 million, and most 7(a) term loans are repaid with monthly payments of principal and interest from the business's cash flow.
Short-term products work on a faster clock. The Federal Reserve's study of online lender websites, Uncertain Terms, found that alongside traditional term loans, many online products carry a fixed fee or a set total repayment, are paid weekly or daily, and are often repaid in six to 18 months. Because the term is short, the payments are larger than on a multi-year loan, and the total cost is smaller in dollars than the same money held for a decade.
The other difference is speed. A small business short term loan is usually decided on recent bank statements and a short application, so the money can arrive in days. Bank and SBA loans ask for tax returns, a personal financial statement and a debt schedule, and they take weeks.
The main types of short-term loans for small businesses
The four forms below cover most of what short term business loan lenders and funders offer. Revenue-based financing and lines of credit are both available through us.
Short-term installment loans from online lenders
An installment loan gives you a lump sum that you repay in fixed amounts over a set term. Online lenders quote the cost in several ways, and the Fed's study found that some show an annual interest rate while others use terms such as a factor rate, a fee rate or simple interest. Many add an origination fee, and some charge administrative fees as well, so the quoted rate is only part of the price. Payments run daily, weekly or monthly depending on the lender, and the lenders in the study listed terms from a few months to a few years. These loans tend to weigh credit and time in business more heavily than a revenue-based funder does, and they suit owners who want a fixed payment and a firm end date.
Revenue-based financing (merchant cash advance)
With revenue-based financing, a funder pays you now for a set amount of your future sales. The amount is sized on what your business usually brings in, and you repay it with a set daily or weekly payment over an expected term until the agreed total is reached. Funders decide mainly from four months of business bank statements and usually ask for no collateral, which is why it is the fastest short-term money in our network. Through us it runs from $5,000 to $2,000,000 and is typically funded within one to two business days of choosing an offer. The cost is quoted as a factor rate, so you know the full payback in dollars before you sign. Our guide to how a merchant cash advance works walks through each step from offer to final payment.
Business lines of credit
A line of credit gives you a limit to draw from as bills come due. You repay weekly or monthly on what you have drawn, and the room you pay back becomes available again without a new application. A business line of credit through our network goes up to $250,000, offers often come back within a day, and some programs discount early payoff. Because charges apply only to the amount you actually take, a line suits gaps that come and go, such as payroll before a client pays or a supplier bill ahead of a busy month.
Invoice financing
Invoice financing advances most of the value of unpaid customer invoices, and the advance is settled when your customers pay. The cost is usually a fee set as a percentage of the invoice value, sometimes charged for each week or month the invoice stays open. It fits businesses that sell to other businesses on net 30 or net 60 terms. It is offered mainly by specialist factoring firms.
| Type | How the cost is quoted | How payments run | Typical term | Amounts |
|---|---|---|---|---|
| Short-term installment loan | Interest rate, simple interest or fee rate, plus origination fees | Fixed daily, weekly or monthly | A few months to about two years | Set by each lender |
| Revenue-based financing | Factor rate, giving a total payback in dollars | Set daily or weekly payment | Several months to about a year and a half | $5,000 to $2,000,000 through us |
| Business line of credit | Charges on what you draw, set by the program | Weekly or monthly on the drawn balance | Revolving, each draw repaid over weeks or months | Up to $250,000 through us |
| Invoice financing | A percentage of the invoice value | Settled when the customer pays | Until the invoice is paid | A share of the invoice value |
Short term business loan rates and how to compare them
Because each product quotes its price differently, the rate on the page is a poor way to compare offers. A simple interest rate, a fee rate and a factor rate measure different things, and the same number means a different dollar cost under each once fees and the term are added. Turn every offer into the same three figures and compare those.
- The total payback is the amount funded plus every fee and charge, which tells you what the money costs in dollars.
- The payment and its frequency tell you how much leaves your account and how often, which matters as much as the total when you plan a week of payroll.
- The early payoff terms tell you whether settling early saves you anything, because some programs discount the remaining cost and others keep the full total.
For revenue-based financing, the factor rate does most of the work. Multiply the amount by the factor rate and you have the total, and our guide to factor rates explained shows how fees and early payoff fit around it. Two offers on the same amount can differ by thousands of dollars once the rate and the schedule are set side by side.
The best short term business loans for your business are the offers whose total you can justify and whose payment your usual weeks carry comfortably. Seeing several offers at once makes that easier to judge, which is why we send one application to the funders in our network and bring their replies back side by side.
What a $100,000 short-term loan costs, with a worked example
The figures below are an example to show the arithmetic. They are not a quote, and real offers vary widely with your revenue, time in business, existing payments and credit.
Take a business that deposits about $100,000 a month, or roughly $23,000 a week. A funder offers $100,000 of revenue-based financing at an example factor rate of 1.35.
| Item | Example figure |
|---|---|
| Amount funded | $100,000 |
| Factor rate | 1.35 |
| Total payback ($100,000 x 1.35) | $135,000 |
| Cost of the money | $35,000, or 35 cents per dollar funded |
| Weekly payment over 40 weeks | $3,375 |
| Daily payment over about 200 business days | $675 |
At $3,375 a week, the payment is about 15% of a usual week's deposits in this example, and the advance is cleared in about nine months. If the money buys stock that sells through in two months or materials for a contract with $60,000 of margin, the $35,000 cost sits against a return the owner can measure.
For contrast, an example SBA 7(a) loan of $100,000 at 11% interest over 10 years has a payment of about $1,378 a month, and the interest over the full term comes to about $65,300. The monthly payment is far smaller because the money stays out for ten years, and the approval takes weeks of paperwork. Which one fits depends on how fast the need pays back and how soon the money has to arrive.
When a short-term business loan fits
Short-term money is a good fit when the thing you are paying for brings the money back within months and waiting weeks for a bank would cost you the opportunity. These are some common examples.
- A seasonal business buys inventory a month or two before its busy season and sells it through during the season that the payments run across.
- A contractor wins a job that needs materials and crew up front, and the client pays when the work is done.
- A supplier offers a bulk discount or a closeout price that is gone by the time a bank loan would close.
- A walk-in cooler, a delivery truck or a point-of-sale system fails, and every day it stays down costs sales.
- Payroll falls due before a large customer pays an invoice, and the gap is a matter of weeks.
Long-life purchases are a different case. A building, a major renovation or a machine you will run for ten years earns its keep over years, so the payment should be spread over years too. For those, equipment financing spreads the cost of the machine over its working life, and our guide to SBA loan requirements covers what banks ask for on longer loans. For smaller amounts, the SBA's microloan program provides loans up to $50,000 at interest rates the SBA says are generally between 8% and 13%, and through our partners we offer SBA-equivalent loans with longer terms. If your need is the everyday running of the business rather than a single purchase, our guide to working capital loans covers how to size the amount.
What funders look at for a short term business loan
Funders that work on short terms read your recent history more closely than your tax returns. Four months of business bank statements show them how much comes in each month, how steady it is, the balances you keep, any days the account ran negative and the payments you already make to other lenders or funders. They also look at time in business and credit, though a lower score narrows the options rather than ending them. Getting matched does not need a hard credit pull, because most funders prequalify from bank statements and a soft pull, and if one wants a hard pull in final underwriting, you know first.
The funders we work with generally look for about a year in business and about $20,000 a month in deposits. If you're not there yet, apply anyway. Some funders work with newer or smaller businesses, and we'll tell you what's realistic.
Merchant cash advance applicants are turned down less often than applicants for most other kinds of financing. In the Federal Reserve Banks' 2025 Report on Employer Firms, 9% of merchant cash advance applicants were denied, compared with 24% for business lines of credit, 32% for business loans and 45% for SBA loans or lines of credit. The same survey found that expected odds of success, quick service and the lack of collateral requirements were among the most common reasons firms applied at online lenders.
How to apply for a short-term business loan through Today Capital Group
You fill in one short application and send your last four months of business bank statements, either as PDF uploads or by connecting your bank read-only. Your file goes to the funders in our network that fit your business, and their offers come back side by side, so you can compare the total payback, the payment and the term in one place.
We go through every offer with you before anything is signed, including whether a line of credit or a longer loan would suit the need better than an advance. There is nothing to pay to apply or to see offers, and you are under no obligation to take one. Most applicants are funded within one to two business days of choosing an offer, some the same day, and our guide to how long it takes to get a business loan sets out the timing for each type.
Start your application with your statements ready, or call (818) 351-0225 to talk through the amount and the payment that fit your business.
Short-term business loan questions
Are short-term business loans a good idea?
They are a good idea when the money pays for something that earns it back within months and you need it now, such as stock ahead of a busy season, materials for a profitable job or a repair that keeps sales coming in. For long-life purchases like equipment or property, a longer equipment, bank or SBA loan spreads the payment over the years the asset is used.
How much would a $100,000 business loan cost?
It depends on the product and the term. As an example, $100,000 of revenue-based financing at a factor rate of 1.35 is repaid as $135,000, so the money costs $35,000, paid at about $3,375 a week over 40 weeks, while an example 10-year SBA loan at 11% costs about $65,300 in interest at about $1,378 a month; real offers vary with your revenue, credit and time in business.
What is the easiest short-term business loan to get?
Revenue-based financing is usually the most accessible, because funders decide mainly on four months of business bank statements and usually ask for no collateral, and in the Federal Reserve Banks' 2025 Report on Employer Firms only 9% of merchant cash advance applicants were denied. Lines of credit come next for many businesses, with credit counting for more.
How long is a short-term business loan?
Most short-term business financing is repaid over roughly 3 to 18 months, and some installment loans run to about two years. Revenue-based financing usually clears in several months to about a year and a half, while a line of credit revolves, with each draw repaid over weeks or months.
What credit score do you need for a short-term business loan?
There is no single minimum, because every funder sets its own thresholds. Revenue-based funders weigh your deposits more heavily than your score, so a lower score narrows the options without ending them, while lines of credit and installment loans from online lenders tend to give credit more weight.
