The Best Short-Term Business Loans in 2021

Since 24% of small businesses get turned down for a bank loan,1 short-term loans provide an appealing alternative—unfortunately, at high cost.
Best overall
Lendio
Lendio
  • Icon Pros  Dark
    Quick and easy application
  • Icon Pros  Dark
    Access to many lenders
Most convenient
Kabbage
Kabbage
  • Icon Pros  Dark
    Lenient approval requirements
  • Icon Pros  Dark
    Fast funding times
Best repeat borrowing
OnDeck
OnDeck
  • Icon Pros  Dark
    Discounts for repeat borrowers
  • Icon Pros  Dark
    Credit-boosting ability
Best for bad credit
Fundbox
Fundbox
  • Icon Pros  Dark
    Repayment options
  • Icon Pros  Dark
    Flexibility for extremely low credit
Most personal approach
Accion
Accion
  • Icon Pros  Dark
    Relaxed borrower requirements
  • Icon Pros  Dark
    Personalized approach

Owning and running a business can be full of surprises and chaos. Whether you’re dealing with unexpected needs and need extra funding or wanting to take advantage of new business opportunities, working capital is crucial. Although all of us wish we could get it with the snap of our fingers, money doesn’t grow on trees. (Sorry to sound like your mother.)

2021 Top short-term business loans

Compare the top short-term loan providers

Company
Loans offered
Min. credit score
Loan min./max.
Required annual income
Get a loan

Lendio

Business lines of credit and many others

550

$2,500/$500,000

$50,000

Kabbage

Business lines of credit

540

$2,000/$250,000

$50,000

OnDeck

Business lines of credit and term loans

600

$5,000/$250,000

$100,000

Fundbox

Business lines of credit

500

Up to $150,000

$50,000

Accion

Term loans

N/A

$300/$250,000

N/A

Data effective 12/7/20. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

Fortunately, business funding is easier than ever to obtain. And every smart business owner knows that time is money. So if you need a quick and small infusion of cash for one-off projects or emergencies, a short-term loan can provide you a lump sum of capital within 24 hours, which you must repay over a three- to eighteen-month period with fixed, regular payments. But keep in mind that these business loans have higher interest rates than long-term loans, making them best for urgent funding needs.

As with any type of loan, it’s important to know what you should look for when sifting through short-term business loans. With that being said, we’ve compiled a guide to our favorite short-term lenders for small business.

So without further ado, let’s explore the details on the best short-term lenders so you know which one to use for your business financing needs.

What is a short-term business loan?

First thing’s first: you’ll need to understand what a short-term loan is and how to use it proficiently. Overall, this financing solution is straightforward. But keep in mind that there are some nuances—just like any business loan.

While short-term business loans can serve immediate business needs, the loan amounts tend to be smaller, the repayment period notably shorter, and interest rates higher than a traditional term loan. On the flip side, however, they have easier qualification requirements and faster funding times.

Thanks to the speed and ease of the application process, lenders spend less time reviewing and vetting your business. Because of this, short-term loans are considered risky for lenders.

So how long are the repayment terms for short-term loans? The easy answer is three to eighteen months. The more specific answer is, as you’d expect, more complex. Each lender will differ depending on the amount borrowed. And the amount you borrow will, of course, depend on the kind of credentials you bring to the table as a borrower.

Now that we’ve addressed what a short-term loan is, let’s explore some of the best short-term lenders.

Lendio: Best overall short-term loan

Known as “the company that’s boosting American small business,” Lendio isn’t your run-of-the-mill lender. Rather than offering financing itself, it serves as a financing marketplace, matching business owners with lenders. Think of it as a dating site of sorts (without the tireless games and uncertainty).

Lendio

Lendio can hook you up with over 75 different lenders—some of which are on this very list. And as a one-stop shopping portal, Lendio can help entrepreneurs like you save time and money

Lendio prides itself on having hassle-free, simple small-business loans. Once you fill out its free, no-obligation application and are approved for a short-term loan, you’ll have your funds in as little as one day.

Since Lendio offers many types of funding from different lenders, which is also why it’s our first pick for best business loans overall, there's several variables to consider. Short-term business loans ranging from as little as $2,500 to as much as $500,000 are available, with interest rates as low as 8%. Similarly, annual fees, term lengths, and collateral requirements vary by lender.

To qualify, businesses must generate $50,000 per year, show six months of history, and have a credit score of 550 or higher.

Strengths
Pro Bullet Fast application
Pro Bullet Many lenders available
Weaknesses
Con Bullet Unpredictable parameters
Con Bullet Six-month business history requirement

Kabbage: Most convenient

Next on our list is Kabbage, best known for its convenient and fast approval and business line of credit—and its wacky name. As a reminder, Kabbage isn’t currently extending new loans. We’ll let you know when Kabbage starts lending again.

Kabbage

To qualify for short-term funding with Kabbage, you need to have been in business for at least one year and have a minimum annual income of $50,000. If this sounds like you, you’ll have access of up to a $250,000 line of credit within just a few short hours.

There are a few ways you can access your line of credit. Both your phone and computer allow you to withdraw the amount you need for the moment and have funds deposited directly into your PayPal account or checking account. The Kabbage Card, as another option, is a physical Visa card that can run as either credit or debit. Although the card is convenient for business owners on the go, make sure to use it wisely.

Take note that each withdrawal from your line of credit is considered a separate short-term loan with its own terms and fees. Even if you have several short-term loans with Kabbage, you’ll still make just one monthly payment.

Strengths
Pro Bullet Quick, streamlined application
Pro Bullet Fast funding
Pro Bullet Convenient Kabbage Card
Weaknesses
Con Bullet High interest rates
Con Bullet Complex fee structure

OnDeck: Best for repeat borrowing

While it doesn’t have the lowest loan requirements out there, OnDeck does offer one advantage to borrowers: discounts for repeat borrowing.

OnDeck

To qualify with OnDeck, your company must have at least one year of history under its belt, $100,000 in yearly income, and a majority owner with a personal credit score of 600 or more.

OnDeck offers advantages like lower interest rates and discounted loan fees to its repeat borrowers. And if you take out a second OnDeck loan before you finish repaying your first, you may be able to waive the remaining interest on your first loan. That means that OnDeck gets better as you borrow more.

One notable downside to this short-term lender? Its rates. The APR on OnDeck term loans starts at 35.1%. That’s not terribly unusual for an online lender, but it is still expensive. So keep in mind that OnDeck may cost you a fair bit―especially the first time you borrow.

Strengths
Pro Bullet Lenient qualification requirements
Pro Bullet Quick approval
Pro Bullet Fast funding
Pro Bullet Loyalty benefits
Weaknesses
Con Bullet High interest rates
Con Bullet Maintenance fees
Grow your business today

Browse hundreds of loan options, custom-tailored to your business and budget needs, from a single, simple platform.

Fundbox: Best for bad credit

From its lenient requirements to its fast access to cash, placing Fundbox on our list of best short-term lenders was a no-brainer. As a revolving line of credit for small businesses, Fundbox can approve you within a mere 10 minutes.

Fundbox

To qualify for financing, borrowers need to be in business for a minimum of two months, rake in at least $50,000 annually, and have a business checking account or compatible accounting software.

As an added bonus, you need only a 500 personal credit score to qualify.

Although the rates are higher than traditional banks and some other online lenders, borrowers can lower their APR by choosing the 12-week repayment option and by repaying the loan early. To get a clear picture of Fundbox's pricing, enter an amount into its pricing calculator to find out.

Strengths
Pro Bullet Options for new businesses
Pro Bullet Repayment options
Pro Bullet Flexibility for extremely low credit
Weaknesses
Con Bullet $100,000 borrowing limit
Con Bullet Limited software and bank account compatibility
Don't qualify for a business loan due to your credit score? Get a personal loan instead.

Accion: Most personalized approach

Accion is a global nonprofit lender with philanthropic ideals. It helps bridge the gap for small businesses that may be considered too risky for traditional banks to approve. The minimum credit score requirement for an Accion loan approval can vary from place to place. While many areas require a credit score of at least 575, that isn’t true for all zip codes, and Accion will also consider other business strengths if your credit is damaged or less established.

Although Accion offers flexible repayment terms and affordable loans, it’s important to note that you may experience a longer approval process, high APR, and additional processing fees. On the bright side, however, Accion’s personalized approach can help business owners who have been denied by other lending options. Also, we recommend checking Accion’s local offers to see if it provides specialized small-business loans in your state.

Strengths
Pro Bullet Options for a diverse range of business owners
Pro Bullet Relaxed credit score requirements
Pro Bullet Flexible repayment terms
Weaknesses
Con Bullet Slow approval times
Con Bullet Additional fees

The takeaway

We live in a fast-paced world, which means that, sometimes, you need a lending option that gives you access to capital sooner rather than later. After exploring many short-term loan options, we truly believe Lendio is the best short-term financing lender on the market. Not only does the platform offer over 75 lender options, but it also boasts a streamlined application process and fast funding.

Whatever lender you choose to use, make sure you understand the business loan requirements, rates, terms, and fees for your short-term loan. 

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Sources
1. Guidant Financial, "2018 Small Business Trends." Accessed December 7, 2020.

Sarah Ryther Francom
Written by
Sarah Ryther Francom
Sarah is Business.org’s senior content editor. She has more than 15 years of experience writing, editing, and managing business-focused content. As the former editor-in-chief of Utah Business magazine, Sarah oversaw the state’s premier business publication, developed several custom publications, and managed all business-to-business content. She also co-authored a business book with FJ Management CEO Crystal Maggelet. Sarah is passionate about helping small-business owners reach sustained success.
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