The Short-Term Loan You Need

Here at AdvancePoint Capital, we offer various short-term loans and small business loans you can take advantage of today. Your business relies on financing opportunities to keep operations running. Whether it’s money for working capital, renovations, real estate, and more — we provide business owners like you with a wide range of short-term loan options. While your credit score, time in business, and financials may hold you back from traditional loan institutions or lenders, like banks, we offer alternative short-term financing and small business funding to help you get started or continue down the road to success.

What is a Short Term Business Loan?

The term “short term business loan” refers to a lump sum of money provided to a company that then uses the capital for a business opportunity purpose. Such purposes may include working capital, equipment purchases, expansion or renovation, and an abundance of other needs. A short term business loan is typically easier to obtain than alternatives like long-term business loans, which may require a higher credit score or more extended time in business.

How Long Are the Terms?

The use of “short term” means that the term loan consists of a fixed length and/or period of time in which the borrower has to repay the loan. With a short term loan like this, the repayment term is usually designated at a time frame of 18 months or less. Short–term loans can have fixed costs built into the loan monthly repayment plan, or they can be based on an interest rate with principal and interest. Small business owners who need access to funding fast, this short-term loan product is for you. Most lenders/funders can fund you in 24 hours or less after approval with your cooperation.

Who Can Qualify?

Anyone who currently owns a company with revenue can potentially qualify. Qualifications such as credit score requirements, sales volume, annual revenue, and time in business vary depending on the funding product you are applying for.

Short term loans allow owners who have some challenges with more traditional short-term loan products an opportunity to still get the funding they need for their company.

The benefits of a short term loan allow for one or more of the following qualification issues:

  • Substandard, mid-prime to subprime credit
  • Low monthly or annual revenue
  • Challenged or no financial statements available such as tax returns, balance sheets, profit and loss
  • Business bank statement issues such as low daily balances and/or overdrafts or NSF’s
  • Less than 3 years in business
  • The need for speed. Need money faster than the traditional process allows

What Are the Most Common Reasons To Acquire a Short Term Loan?

  • Emergency capital
  • Working Capital 
  • Inventory/Supply
  • Cash Flow shortages
  • Expansion 
  • Advertising/Marketing/Customer Acquisition
  • Small Equipment Purchases
  • Business Opportunity

The 7 Best Short-Term Business Loan Options

Business Loans-Short Term

Business loans short-term are a lump sum fixed amount upfront, with a specified period of time to repay. Short term financing is within 6 to 18 months, but typically one year or less. A short term loan is a great solution when you cannot get approved for more traditional loan products. A “factor rate” or fixed cost of money is charged for most loans of this kind. Documentation requirements, as well as credit score requirements, are more lenient than traditional loans as well. Payment frequency is bi-weekly, weekly, or in some cases, Monday through Friday, and terms are shorter to compensate for the higher risk. Because of these features, this small business loan may have higher approval rates than traditional long term loans and other lending options. Short term loans typically cost more than bank loans and have higher interest rates.

Short Term Loan Product Overview

Rates: Factor rates from 1.09% up to 1.35%
Terms: 6 to 18 months in duration (typically 12 months or less)
Fees: Origination fees from 0% to 3%
Payments: Weekly, bi-weekly, and in some cases, daily Monday-Friday
Credit Scores: All credit types considered
Paperwork: Three months bank statements, 1-page application
Processing Time: Quick turnaround and fast funding – same day funding up to 24 hours

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Business Lines of Credit

A business line of credit is an open revolving line of credit. The product allows the owners to draw funds at will or make purchases up to a set limit. Business lines of credit charge a principal & interest rate. A Small business line of credit doesn’t necessarily have any term length but requires either a renewal semi-annually or annually to be extended.  Business lines of credit offer flexibility in accessing capital that many other short-term loans do not have.

Business Line of Credit Product Overview

Rates: Interest rates starting treasury index plus 1% to 2.5%
Terms: Open revolving line of credit
Fees: Origination fees ranging from 0% to 3%
Payments: Monthly, bi-weekly, or weekly payments
Credit Scores: Good to excellent credit preferred. All credit considered.
Paperwork: Three months bank statements, 1-page application
Processing Time: Quick turnaround processing times: Same day funding or up to a week.

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Business Cash Advance

Business cash advances (BCA), also known as a purchase of future sales agreements, advance money off of future sales. The owner is responsible for paying back a fixed payback amount known as a specified amount, which is greater than the amount that was advanced to the company. A “factor rate” is charged, which is the difference between the advance amount and the payback amount. Factor rates do not function like principal & interest rates in that it is a flat fixed cost of money charged.

The BCA is repaid by taking a fixed percentage (specified percentage) of future overall sales deposits. The payments are collected by an ACH fixed daily or weekly payment deducted from a small business’ bank account based on the specified percentage of future sales. Reconciliation can occur at the end of every month if the fixed payments exceed the month’s fixed set percentage of sales, as described in the agreement. There is no term limit to a business cash advance. A business cash advance is not a term loan but an advance of future receivables.

Product Overview

Rates: Factor rates range from 1.09% up to 1.35%
Terms: No term limits. Repayment period dependent on future sales
Fees: Origination fees 0% to 3%
Payments: Weekly or daily Monday-Friday fixed ACH payments
Credit Score Standards: Poor to excellent credit accepted.
Paperwork: Three months bank statements, 1-page application
Processing Time: Quick turnaround and fast funding – same day to 48 hours

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Merchant Cash Advances

A merchant cash advance (MCA), also known as a purchase of future sales agreement, is similar to another small business financing option but different when it comes to the repayment process. Merchant cash advances are connected to future credit card sales instead of overall sales. MCA’s take a set percentage of future credit card sales until the advance is paid back in full. The payment process provides more flexibility in repayment versus alternative loan solutions.

Product Overview

Rates: Factor rates ranging from 1.09% up to 1.45%
Terms: No term limits (payoff depends on future credit card sales)
Fees: Origination fees 0% to 3%
Payments: Set fixed percentage of future credit card sales withdrawn at the time of batch of credit card sales
Credit Standards: All credit Considered
Processing Time: Quick turnaround, same-day to 24 to 48 hours

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Invoice Financing(Factoring)

Invoice financing advances money through outstanding issued invoices that a company has in accounts receivable but not yet collected. Invoice financing allows access to capital quicker and avoids waiting for outstanding invoices to be paid by the client. The invoice finance company advances the money to the small business owner in exchange for a nominal fee. The invoice factoring company assumes the collection of the invoice and relinquishes the responsibility of collecting on those invoices by the small business owner. Excellent for cash flow shortages.

Product Overview

Rates: None
Terms: No term limits
Fees: 1% to 3% fee based on Invoice. Monthly service fees depending on the volume of invoices factored
Credit Standards: The clients’ credit needs to be favorable, not the small business owner advancing off invoices. Personal credit score is not a factor in the decision.
Processing Time: Advances issued daily off of invoices created. Typically 1 week to set up Invoice financing relationships.

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Purchase Order (PO) Financing

Purchase Order (PO) financing does not require any money out of the pocket. It is a finance option that provides the ability to raise capital to pay suppliers upfront for verified purchase orders. The advance frees up cash flow that they would ordinarily need. Purchase Order financing can finance an entire order or a portion of it, depending on the purchase order and scenario. When a supplier is ready to ship the order, the supplier will request payment. The purchase order financing company will advance the money to the supplier and then collect payment directly from the customer. The purchase order funder then will subtract their fees and then sends the balance of the invoice, so they act both as an advancing company and collection company.

Product Overview

Rates: None
Terms: No term limits
Fees: Purchase order fees range between 1% to 6% of purchase order depending on the risk
Credit Standards: All parties need a favorable credit score history
Processing Time: It takes a few days up to a week to set up purchase order financing

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Business Credit Cards

Business credit cards are open credit lines revolving and charging a principal & interest rate with a credit limit. They function the same as personal credit cards. A plastic card is issued that can be used for making payments or purchases. Great for company needs on-demand.

Product Overview

Rates: Introductory rates starting at 0% up to 28.99%
Terms: Open revolving line of credit with a credit limit
Fees: $0 to $500 annual fees
Payments: Flexible low monthly payments
Credit Score Standards: Must have good to excellent credit score
Time Frame: Instant approval to same day available

The fast, convenient and straightforward way to get the money you need for your business – now! Get Your Quote Today by filling out our simple form.

What are the Pros and Cons of Short Term Business Loans?

Pros

  • Access to capital when other traditional options are not available
  • Fast Processing time usually same day to a couple of days
  • No Upfront fees for services rendered

Cons

  • Rates can be higher than traditional lending
  • Shorter-term
  • Smaller loan amounts due to the shorter term

How to Apply for a Short-Term Business Loan?

There are a variety of short-term loan products. When looking at a short-term loan, a good rule of thumb is the better the costs, rates, and terms, the more information (paperwork), requirements, and length of time it will take to get an answer.

What you will find with most lenders and funders is that an application for business loans will have to be filled out either offline or online that will include many of the following pieces of information:

  • The owner’s personal information includes full name, home address, company email, social security number, date of birth, ownership shareholder percentages.
  • Legal name and DBA if applicable, company address, company number, website.
  • Time in business
  • Business bank statements
  • Description of the company and its activities

Frequently Asked Questions

Are short-term business loans difficult to obtain?

No, compared to other business loan choices like long term loans, a short-term loan is not difficult to obtain. Lenders don’t require a stellar credit score or lengthy time in business and can be a great way for small business owners to get the cash flow they need fast.

How short are short-term business loans?

Typically, short-term business loans have a time frame of around 18 months or less. Short–term loans usually have fixed costs built in their monthly repayment term plan. Short-term business loans can also be based on an interest rate with principal and interest.

Do you need a good credit score to obtain short-term business loans?

No, here at AdvancePoint Capital, we offer short-term business loans for all credit score types. As many business owners use short-term business loan products as a working capital loan, it’s crucial to have cash flow choices available, which is why we accept a wide range of credit histories.

Although many types of short-term small business loan options don’t require excellent credit, some such as business lines of credit do. So, do your research to be certain before looking for term financing options and diving down long term loan products.

What are the benefits of short-term business loans?

A short-term business loan can have many advantages that other loan products do not offer. First, it’s a faster way to get cash flow to your business than many other financing options. So, if you’re in a time crunch, this can be a great solution. Next, the short-term financing requirements are far less stringent than others like long-term loans, which means your business and personal credit score won’t be as big of an issue. And finally, if your financing needs aren’t substantial, it can be a great way to get a reasonable amount that you can pay back daily or weekly.

What are the drawbacks of short-term loans?

Short term loans may not offer enough capital for your business needs. If you’re looking for a loan that offers substantial funding, long-term solutions or lines of credit may be a better fit. Make sure you have a strong understanding of your financing needs before applying with business loan lenders. You can use tools like a business loan calculator to help with the decision making process. Business lenders, especially in the online marketplace, have a diverse range of short term business loan choices your team can take advantage of today.

Who qualifies for short term loans for business?

Most businesses with a business bank account and a company can qualify with online lenders. Yes, credit score, annual revenue, and time in the industry may play a role depending on which lenders you’re considering, but typically the requirements are lenient. Compared to lines of credit or a long term loan, short term loans are far more attainable. Take a look at the repayment term to be sure it’s the right fit.

Should I try to get short-term loans for my business?

There’s no one size fits all funding decision. Factors such as credit score, annual revenue, and time in business may offer better or worse solutions depending on the state of your business. Some loans like long-term loans, purchase order financing, or a line of credit may be better suited for your business down the road. The most important aspect of a loan, long term or short, is that you can pay back the lenders. So, be very mindful of the repayment term attached to your product.

What is the best short term business loan option?

The best short term loan for small business owners is a term loan short term or a business cash advance. The reason is that there are low annual revenue requirements, credit standards, cash flow, and business credit.

How does the Paycheck Protection Program work?

Due to the most recent COVID-19 crisis, the Small Business Administration (SBA) has come up with a new paycheck protection program called the SBA Paycheck Protection Plan, which is a loan to help businesses affected by the crisis. SBA loans may be forgiven under certain circumstances.

Advice, Tips, and Benefits of Short-Term Business Loans

It’s essential to ask questions and do your research about what products are available with short-term loans. With so many business loans out there, it can be difficult to choose the right short term business loan.

Ask the tough questions when you begin your short-term loan search. Always start by asking why I need the loan funds, the dollar cost, and how I will put it to good use? Have I been given all funding options in the marketplace, and am I getting competitive rates, costs, and terms for my situation? Always take the time to do a cost verse benefit analysis for borrowing money for the company with a short term loan.

Check your offers, term sheets, and agreements for terms and conditions, which should include the cost of money (interest rate or factor rate), all closing or funding fees, term duration, payment frequency, personal or guarantees, and any collateral requirements for the short term loan as well. Attempting to qualify for loans requires a lot of research and knowledge about your own company in order to weigh the pros and cons of various loans and their benefits. There’s a wide variety of loans for businesses available, but choosing the wrong loans can have a significant impact on your company’s future.

Using AdvancePoint Capital’s Funding Marketplace

Applying for a short term loan with AdvancePoint Capital is as simple as a 1, 2, 3, 4 process. Start with this online form, then fill out the short application page, wait a few hours for your approval, and then get your cash flow.

The fast, convenient and straightforward way to get the money you need for your business – now!

Get your Quote Today by filling out our simple form.

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* All loans made by either WebBank, an FDIC-insured Utah industrial bank, or Bank of the Internet Federal Bank, an FDIC-insured federally chartered thrift located in California. In connection with the loans, the Banks' underwriting conditions and terms apply.