Quick Short-Term Loans: The Top 7 Options of 2020

Updated on September 28, 2022
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Your Ultimate Guide to Quick Short-Term Loans

Quick short-term loans are a form of debt financing that funds quickly—within an average of three days. Quick short-term loans come in the form of a lump sum of cash that’s repaid, plus interest, within a year. Generally speaking, quick short-term loans will come with weekly or daily repayments, higher rates, and smaller amounts. But, they’ll also be much easier to qualify for and, of course, much quicker to fund.

The seven most affordable, quickest-to-fund short-term loan options on the market are:

  1. CAN Capital
  2. Direct Capital
  3. ForwardLine
  4. OnDeck Capital
  5. RapidAdvance
  6. LoanBuilder, a PayPal Service
  7. The Business Backer

These seven best quick short-term loan options can get you cash in hand fast—often within the same business day—and offer relatively affordable rates compared to more costly competitors.

Here’s your guide to finding the very best quick short-term business loans possible:

Quick Short-Term Loans: The 7 Best Available

Now that we’ve prefaced this with some of the important factors you should consider before you pursue quick short-term loans, we’re ready to dive in.

To help you find the very best short-term loan option that will get you cash in hand quickly, we’ve compiled our top seven choices based on two key standards:

  • An average of three days or less to funding after an application is submitted (with many boasting funds transferred within the same business day!)
  • TrustPilot borrower rating of 8.5 out of 10 or higher.

Here are the best quick short-term loans that fit our criteria:

1. CAN Capital

With a solid TrustPilot rating and relatively low approval requirements, CAN Capital is a solid short-term loan option with fast approval for businesses needing as little as $2,500 or up to $250,000 in funding.

Here are the facts you need to know:

  • TrustPilot rating: 8.9/10
  • Average days to funding: 2 business days
  • Loan amount: $2,500 to $250,000
  • Length of term: 3 to 24 months

To qualify for a short-term loan from CAN Capital, you need to have been in business for at least a year and have average monthly revenue of at least $4,500. You also need a minimum personal credit score of 600, with higher credit scores typically resulting in a lower total cost of borrowing.

Keep in mind that CAN Capital charges a 2% origination fee on all short-term loans. However, borrowers who repay their loan early can earn a discount of up to 6% off their remaining balance at the time of total payment.

2. Direct Capital

If you’ve been in business for at least two years with an annual revenue of at least $150,000, a highly rated short-term loan from Direct Capital might be a great choice for your business. Funds from this lender can be used for virtually any business need, including inventory purchases, marketing costs, and more.

Check out these fast facts on a short-term loan from Direct Capital:

  • TrustPilot rating: 9.2/10
  • Average days to funding: 3 business days
  • Loan amount: $10,000 to $150,000
  • Length of term: 6 to 18 months

Borrowers seeking a quick short-term loan from Direct Capital must have a minimum of seven monthly deposits as well as an average bank balance of $3,000. In addition, Direct Capital caps the loan amount for short-term borrowers at 3.5 times your average daily bank balance.

Before applying, be aware that Direct Capital requires all borrowers to sign a personal guarantee, and that all short-term loans from this firm require daily repayments.

3. ForwardLine

A particularly good choice for borrowers with poor credit, ForwardLine requires a minimum FICO personal credit score of only 540. That’s because this lender takes pride in their holistic evaluation of a business’s financial standing before making a funding decision.

Start here to determine whether a short-term loan from ForwardLine is right for you:

  • TrustPilot rating: 8.8/10
  • Average days to funding: 3 Business Days
  • Median loan amount: $30,000
  • Length of term: 6 to 15 months

If you’re concerned about not having collateral to put up on a short-term loan for your small business, you’ll be glad to know that ForwardLine is one of only a few lenders that has no collateral requirements for short-term loans. This firm does, however, require all borrowers to sign a personal guarantee—so be sure you understand the long-term implications of that document before you sign.

4. OnDeck Capital

With a minimum personal FICO score of just 625, OnDeck offers hope to business owners with very poor personal credit who need funding for their business. As long as you’ve been in business for at least a year with an annual revenue of $100,000, you have a good chance of qualifying with this lender.

Here’s what you need to know about OnDeck’s short-term offerings:

  • Average days to funding: 1 business day
  • Loan amount: $5,000 to $250,000
  • Length of term: Up to 24 months

Though OnDeck maintains some of the highest interest rates on the market for borrowers with poor credit, this lender may still be a particularly great choice for borrowers planning to pay off their short-term loan ahead of schedule. That’s because—unlike many lenders that charge a prepayment penalty—OnDeck actually rewards early payers by forgiving 25% of outstanding interest at the time of their final payment.

5. RapidAdvance

Known for their devoted customer service as well as a higher than average rate of loan approvals, RapidAdvance offers three tiers of short-term loan offerings—Standard, Select, and Preferred—to suit the specific needs of different businesses.

Though it’s worth learning the particulars of RapidAdvance’s tailored offerings, these fast facts cover the basics of all short-term loan products from this lender:

  • TrustPilot rating: 9.6/10
  • Average days to funding: 2 business days
  • Loan amount: $5,000 to $1,000,000
  • Length of term: 4 to 12 months

Any business with at least a two-year operational history and $120,000 annual revenue can be eligible for RapidAdvance’s standard short-term loan. However, business owners with a longer time in business, higher revenues, and a FICO personal credit score in the mid-600 range or higher have a better chance of qualifying for the Select or Preferred loan products, which come with a lower total borrowing cost.

6. LoanBuilder, a PayPal Service

Convenience is the name of the game for PayPal’s LoanBuilder program, which boasts preapprovals in just five minutes as well as convenient automatic daily repayment transfers from your business checking account.

Here’s what you need to know about short-term loans from LoanBuilder:

  • TrustPilot rating: 9.4/10
  • Average days to funding: 3 business days
  • Loan amount: $5,000 to $75,000
  • Length of term: 13 to 52 weeks

Businesses can qualify for funding from LoanBuilder with only nine months of operational history and $42,000 in revenue, making it an excellent choice for younger businesses that don’t want to wait for funding.

7. The Business Backer

Unlike the other options on our list, The Business Backer’s funding option is structured as a short-term line of credit. This means that after being approved for funding up to a certain maximum balance limit, you can elect to take either the full balance or a smaller amount—and you’ll only be charged interest on the funds you actually use.

Considering the Business Backer’s unique short-term line of credit for your financing needs? Here are the basic facts to know:

  • TrustPilot rating: 8.9/10
  • Average days to funding: 1 business day
  • Loan amount: $5,000 to $240,000
  • Length of term: 4 to 18 months

Although interest rates from the Business Backer are on the higher end of the market, the company’s commitment to transparency in borrowing—along with the line of credit structure of its product—mean that your total cost of borrowing from this lender may actually be less than from other firms that advertise a lower interest rate.

Apply for Quick Short-Term Loans

Quick Short-Term Loans: What to Consider Before Funding

While there’s certainly value in reacting quickly and efficiently to get your business the funding it needs, there’s something important to remember:

Often your first or fastest available funding option isn’t necessarily what’s in the long-term best interest of your business—and that’s particularly true of short-term loans with quick approval.

So, before you scroll down and click through to apply for the fastest cash you can get, take just a few minutes to ask yourself these questions, and make the right funding choice for your business’s long-term financial needs.

There Are Some Notable Downsides to Short-Term Financing

Before you sign the dotted line on any short-term loan application, there’s an old financial industry adage you need to take to heart: Fast cash is expensive cash.

Yes, there are plenty of quick short-term loan options that can get you cash in hand within just a few days. (We’ve got seven favorite options, in fact!) But we have to be honest—choosing one of these options is going to cost you. Taking on a short-term loan can significantly impact not only your total cost of borrowing but also your business’s daily cash flow and access to longer-term funding.

Of course, there are circumstances in which the potential for added revenue is worth any potential downside. To make sure you’re objectively weighing the pros and cons, consider these three biggest potential downsides to taking on a short-term loan with fast approval.

  • Higher Than Average Interest Rates

    With interest rates on fast short-term loans reaching up to 80% APR, it’s no wonder that borrowers often find themselves second-guessing what fast access to funds is really worth for them. In particular, when you’re considering quick short-term loans to take advantage of a revenue opportunity, it’s important to evaluate whether your profit potential outweighs the interest you’ll pay on the loan. If you have a good chance of doubling your money, the cost may be worth it! Just make sure you complete an accurate revenue forecast to better understand the financial implications of your decision.

  • Repayments Due Weekly (or Even Daily)

    There’s a reason quick short-term loans are given this name—the repayment period is typically only a couple of months, and your loan repayments will catch up to you quickly. In fact, most short-term loans require weekly or even daily repayments from the borrower! The expectation to start repaying your loan right away—often before you’ve had a chance to generate revenue from your new investment—makes short-term loans a less desirable option for certain borrowers.

  • It May Limit Your Access to Other Financing

    Taking on a short-term loan—even if it’s one your business can easily afford—can limit your access to other forms of debt financing for your business during the duration of your loan term. Keep this in mind if you’re planning to apply for a larger, longer-term loan for your business in the near future, and weigh your priorities to determine whether the quick access to cash would be worth these limitations.

Quick Short-Term Loans Have Fine Print, Too

Think about how many times weekly (or even daily!) you download a new mobile app or sign up for a new product online and check a box that says something like:

I have read and accepted the terms and conditions for this product.

Of those times, how frequently do you actually read that fine print before checking the box and moving on?

We get it. There are only so many hours in a day, and who really has time for all that fine print? But while the risks of ignoring the terms of service details on the latest social media app may be relatively minor, if you’re about to sign a business loan agreement, you should always read the fine print. Trust us, it is worth the time you put in.

As you’re reviewing the finer points on your short-term loan application, we recommend taking special note of how the interest rate is listed, as well as any requirements for collateral or a personal guarantee. These considerations can have a significant long-term impact on your business, so be sure you understand the implications!

A Repayment Plan for a Quick Short-Term Loan Is a Must

When you’re in a hurry to apply for quick short-term loans, it’s easy to get narrowly focused on the first half of the process—getting approved and getting the cash you need.

But it’s the other side of taking on a short-term loan—the repayment process—that will have the most significant impact on your business.

So, before you sign the dotted line on any business loan, you first need to make a plan. How much is your loan going to cost you, what can you afford, and how will you pay it back?

Consider these most important factors to make sure you understand exactly how any short-term loan option with quick approval will affect your company’s long-term finances.

Affording Your Quick Short-Term Loan Isn't a Given

We’ve probably overemphasized by now that quick short-term loans come at a high price—but that fact alone doesn’t answer the big questions: Can you afford a short-term loan, and is it worth the cost?

Fortunately, short-term loan lenders have a simple, straightforward way of determining the loan amount and rate you can afford—and with a little know-how, you can use their same model to determine the loan size you’re comfortable taking on.

All you need is a simple formula called the debt service coverage ratio, or DSCR. Here’s how it works:

Cash Flow / Loan Payment = Debt Service Coverage Ratio

To complete the calculation for a potential loan before you apply, first determine your monthly cash flow (that’s your average monthly revenue less your average monthly expenses), and divide that by the total monthly payment for your potential loan. If you’re considering a loan with daily or weekly payments, add all the payments together for an average month to come up with your total. That number should always be higher than 1.0—the higher the number, the more “affordable” your short-term loan will be.

Every lender sets a minimum DSCR for their short-term loans—but in general, 1.25 is a good rule of thumb. That said, some lenders fund loans with a DSCR as low as 1.15, while others require a ratio of 1.5 or higher.

As you calculate your own DSCR and determine what you can afford, be sure to consider not only what you’ll qualify for but also the level of risk you feel comfortable taking on. There’s little value in capitalizing on an exciting business opportunity if the resulting loan payment will put your cash flow at risk!

Clarify the Short-Term Loan Repayment Schedule

Depending on how revenue and expenses flow within your business, the difference between a single monthly sum versus weekly or daily loan payment requirements can have a significant impact on your cash flow.

What’s more, quick short-term loans with weekly or daily payments will compound interest more quickly than a loan with monthly payments, escalating your total cost of borrowing even further. (Consider this one more reason to always calculate your equivalent APR!)

When reading the fine print on your short-term loan application, pay attention to the repayment schedule, as well as how and when interest compounds. If you’re uncertain about the impact various payment schedules may have on your cash flow, consider drawing up a loan amortization schedule or a cash flow forecast to evaluate the effect.

Quick Short-Term Loans: How To Apply

Once you’ve determined that quick short-term loans are the right choice for your business and found the right loan product for your needs, you’re ready to submit your application, get the cash you need, and move on to the other day-to-day work of growing your business.

But remember, lenders can only do their part to get you access to funding quickly if you’ve given them everything they need to process your application. In almost every case, delays in approval for short-term loans are the result of an incomplete or inaccurate application.

For the fastest possible approval and funding time on your short-term loan, take care to follow these steps before you apply.

1. Weigh Your Quick Short-Term Loan Options

Remember, your goal should be to obtain not just any quick short-term loan but the best available short-term loan option for you. It will likely be relatively simple to access some form of a quick short-term loan, no matter your qualifications.

But that doesn’t necessarily mean that you should take one just any quick short-term loan handed to you. As we’ve said, many times, the “quick” and the “short-term” of quick short-term loans make them the perfect storm—a quick approval turnaround and a short repayment term both correlate to expensive funding on their own. And combined into one quick short-term loan, they could spell serious trouble for your business finances.

So, though you might be in a hurry to access funding, be sure to consider multiple quick short-term loan options so that you can find the most affordable possible. A little time dedicated to shopping your options now could save your business untold sums in avoided interest.

2. See What Quick Short-Term Loans You're Eligible Fo

All that said, getting your quick short-term loan application to actually be approved quickly will require you to be realistic about your qualifications as a borrower.

To select the highest quality quick short-term loan option that you can realistically qualify for, consider how you measure up under these four primary qualification standards:

  • What is your personal credit score? (And have you checked your credit report for accuracy with the major reporting agencies?)
  • How long have you been in business?
  • What is the average daily balance in your business checking account?
  • How many transactions, on average, do you process per month?

Weigh your answers to these questions against the standards of each short-term loan product you’re considering. Doing so will help you select your best option and get approved quickly.

3. Prepare and Submit Your Quick Short-Term Loan Application

Many online lenders advertise that their loan applications can be completed in under 10 minutes. Now, that is technically true, and we see borrowers complete and submit their applications that quickly every day. However, if you want to get through that loan application quickly and move on with your day, you need to have your ducks in a row.

Before starting your short-term loan application, we recommend compiling the following personal and business documentation:

  • Proof of identity, such as your passport or driver’s license
  • A voided business check
  • Proof of business ownership, such as your LLC filing or articles of incorporation
  • Business bank statements for the past two years
  • Your most recent personal tax return

In addition to these basic forms of documentation, some lenders might request additional paperwork either as part of your loan application or as follow up before they can approve your short-term loan. Take a look at our list of conventional loan requirements to better prepare yourself. And if your lender requests additional documentation, be prepared to respond quickly to minimize your funding time.

Frequently Asked Questions

The Bottom Line

Remember, no matter how tempting fast access to funding may be, taking on any loan that you can’t afford or that doesn’t make financial sense is only going to do harm to your business in the long run.

That said, for borrowers in certain circumstances, short-term loans can be the perfect solution to address immediate cash flow needs. As long as you’ve done your research and run the numbers to make sure your profit potential outweighs the costs, applying for a short-term loan with quick approval could be the best thing you do for your business today.

Meredith Wood
Vice President and Founding Editor at Fundera

Meredith Wood

Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera. She launched the Fundera Ledger in 2014 and has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending. She is a monthly columnist for AllBusiness, and her advice has appeared in the SBA, SCORE, Yahoo, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, MyCorporation, Small Biz Daily, StartupNation, and more. Email: meredith@fundera.com.
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