Get the Best Short-Term Business Loan
Here at AdvancePoint Capital, we offer various short-term business loans and other funding alternatives small businesses can take advantage of today that traditional lenders do not offer.
To keep operations running smoothly, sometimes small business loans are needed to cover the cash flow gaps. Whether it’s money for working capital, cash flow, opportunities, emergencies, or other needs, we provide small businesses with a wide range of loan options through our lender network that traditional lenders do not have.
While your credit score, time in business, and financials may hold you back from approval through traditional loan institutions or lenders like banks, you still have options. We offer alternative short-term financing and business funding to help you get started at reasonable loan costs and interest rates.
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What is a Short-Term Business Loan?
The term “short term ” means 6 to 18 months to repay and 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 needs, equipment purchases, expansion or renovation, and an abundance of other expenses. 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 a longer time in business.
How Long are the Terms for a Short-Term Loan?
The use of “short term” means that the loan consists of a fixed length of time in which the borrower must repay the loan ranging from 6 to 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. When small business owners need access to funding fast, this loan product is the perfect match. Most lenders or funders can fund in 24 hours or less after approval with your cooperation on this product.
Who Can Qualify for a Short-Term Loan?
Anyone who currently owns a company with revenue can potentially qualify for short-term loans. 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 business loans an opportunity to still get the funding they need for their company. The benefits of short-term financing allow for one or more of the following qualification issues:
- Substandard, mid prime, to subprime credit
- Low monthly or annual revenue
- No financial statements, such as tax returns, balance sheets, profit & loss, etc.
- Business bank statement issues such as low daily balances, overdrafts, or NSFs
- Less than 3 years in business
- The need for speed; faster funding than the traditional process allows
Common Reasons to Acquire a Short-Term Business Loan
While some businesses acquire short-term commercial loans to quickly fund their company needs, some need short-term financing for a startup. Regardless, this loan option can be beneficial for multiple reasons including:
- Emergency Capital
- Working Capital
- Advertising/Marketing/Customer Acquisition
- Small Equipment Purchases
- Emergency expenses
- Business Opportunity
6 Best Short-Term Loans for Business Owners
Short-Term Small Business Loans
Short-term business loans are defined as repayment terms ranging between 6 to 18 months. This short-term business financing option has a lower minimum credit score requirement and less documentation needed for approval than traditional installment loans. Same-day funding is available.
Short-Term Business Line of Credit
A credit line is a great option for businesses that need to draw money on demand for unexpected emergency expenses but only want to pay interest for a short amount of time. Line of credit has competitive interest rates as well as the ability to pay off early with no prepayment penalties to save interest.
Short-Term Business Cash Advance
A business cash advance is an advance of future sales receivables of the business, and not a loan. Repayment terms are flexible and based on a set percentage of future deposits in the bank account of the business.
Short-Term Merchant Cash Advance
A merchant cash advance is an advance of future credit card processing receivables and is repaid by a set percentage of credit card processing.
Invoice Factoring or Financing
Invoice factoring provides businesses that invoice their clients regularly the ability to get an advance of the business's outstanding invoices within the net terms of the invoice. This advance process accelerates payment of the invoice by the invoice factor company before the client pays. Great for filling the cash flow gap.
Business Credit Cards
Credit cards are always an option for immediate purchases and cover emergency expenses. Most credit cards are offered by traditional banks. Credit cards have a personal guarantee.
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Pros and Cons of Short-Term Business Loans
- 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
- Interest rates can be higher than traditional lending
- Shorter term
- Smaller loan amount due to the shorter term
- Some products don’t have benefits to paying off the loan early
- Weekly payments, as monthly payments are rare
- Personal guarantee in some cases
- No startup businesses
How to Apply for a Short-Term Business Loan?
There are a variety of short-term funding products to pick through. A good rule of thumb when looking at short-term financing 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 for lender approval;
- Owner’s personal information, including full name, home address, company email, social security number, date of birth, ownership shareholder percentages, etc.
- Legal name and DBA if applicable, company address, company number, website, etc.
- Time in business
- Business bank statements
- Description of the company and its activities
- Business expenses
Frequently Asked Questions
Things to Consider While Applying for a Short-Term Loan
When considering a short-term loan, you need to consider several factors – your offers, the agreement terms and conditions, the interest rate and factor rate, closing and funding fees, term duration, guarantees, and payment and collateral requirements.
So, where do you start when beginning your short-term loan search? With the tough questions.
- Why do you need the loan?
- What’s the actual dollar cost?
- How will you use the loan?
- Have you checked out all of your options in the marketplace with online lenders?
- Am I receiving competitive rates, costs, and repayment terms for my loan inquiry?
- Does this loan require collateral?
And, if you want to be extra thorough, consider conducting a cost-benefit analysis.
Apply for a Short-Term Business Loan Today!
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 to move your business forward.