Finimpact
Can I get short-term business loans with bad credit?
There are some lenders that focus on offering short-term business loans for bad credit, but it is far more difficult to qualify unless you have good personal and business credit.
How much does a short-term business loan cost?
Short-term business loan costs depend on many factors, including the type of loan, the lender, your business history, and your credit score. APRs can range from a low of 3% to as high as 50% or more.

Don’t forget that many business loans also involve fees. Origination fees are common and can range from 1.5% or more, or may be a flat fee, depending on the loan.
Are there short-term loans for startup businesses?
Yes, there are short-term business loans for startup businesses that you can use to pay for your company’s initial expenses.

However, it can be much harder to get these loans due to your company’s lack of business history. You’ll be relying more on your personal credit history or start up loans to qualify. You can also expect higher interest rates and fees.
How Much Does a Short-Term Business Loan Cost?
Short-term business loans tend to be more expensive than traditional business financing. Lenders tend to charge higher interest rates and fees, especially when offering very short-term, unsecured loans.
Who Should Get a Short-Term Business Loan?
Short-term business loans are intended for companies that need to borrow money to deal with an unexpected situation.

This can be a negative situation, such as cash flow issues caused by a customer that is slow to pay their invoices or an emergency expense like a broken-down piece of equipment. It can also be a positive situation such as an exciting business opportunity that won’t last long.

The unifying factor is short-term needs. Businesses with short-term needs and an expectation of being able to repay the loan quickly should turn to short-term business loans.

If you’re looking for a larger loan to make a more serious, long-term investment, you should consider more traditional business financing instead.

Conclusion

Short-term business loans are an option for companies looking to handle a short-term need, such as covering an unexpected cost, dealing with cash flow problems, or taking advantage of an opportunity. However, they shouldn’t be something you use frequently. For larger investments, look for more traditional business financing.

About the Authors

TJ Porter

Written by: TJ Porter

Personal Finance Writer

I have in-depth experience in reviewing financial products such as savings accounts, credit cards, and brokerages, writing how-tos, and answering financial questions both simple and complicated.

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Kal Salem

Reviewed by: Kal Salem

CPA, PMP and Finance Consultant

A CPA and finance professional working with small businesses to educate owners and grow alongside their businesses. He holds a Masters in Accounting and a BS in Supply Chain Management. Owner at Salem CPA Services LLC.

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Somer G. Anderson, Ph.D.

Fact checked by: Somer G. Anderson Ph.D., CPA

Accounting and Finance Professor

Somer G. Anderson has been working in the Accounting and Finance industries for over 20 years as a financial statement auditor, a finance manager in a large healthcare organization, and a Finance and Accounting professor at Maryville University.

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