Last updated: 02 Jul 2026
Access £1,000 - £500,000 from 130+ UK lenders. One application. Multiple offers.
Compare short term business loans and get funded in 48 hours
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TRUSTED BY 200K+ UK BUSINESSES
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What is a short term business loan?
A short term business loan is a type of business financing that provides a lump sum of capital, repaid, with interest, over a period of 3 to 24 months. They can be used to cover immediate cash flow needs, manage seasonal costs, purchase stock, fund a project or respond to an unexpected expense.
Short term business loans are designed for speed and flexibility, with UK businesses typically able to receive funds within 24 hours of approval. Because the repayment period is shorter, monthly repayments may be higher than with longer term finance, so it is important to compare the total cost of borrowing before applying.
What can you use a short term business loan for?
Cash flow gaps
Bridge the gap between outgoings and incoming payments. This can be especially useful for businesses with long payment terms.
Stock & inventory purchase
Capitalise on bulk discounts or seasonal demand spikes without draining your working capital.
Unexpected expenses
Whether you have emergency repairs, urgent supplier payments, or an unplanned business cost, access capital fast when you need it most.
Business growth & expansion
Open a new location, hire staff, or launch a marketing campaign without waiting for profits to accumulate.
Seasonal trading
Retail, hospitality, and construction businesses use short term loans to fund peak seasons and repay during high revenue periods.
Am I eligible for a short term business loan?
Eligibility for a short term loan varies by lender, which is exactly why comparing across 130+ lenders with Capitalise gives you the best chance of approval. Here are the general criteria most lenders look for:
Criteria | Typical requirement | Capitalise advantage |
|---|---|---|
Trading history | Minimum 6–12 months trading | Some lenders accept 3+ months; we match you accordingly |
Business credit score | Good credit preferred but not always required | We match bad credit businesses to specialist lenders |
UK registered | Business must be registered and trading in the UK | Required by all UK lenders on our platform |
Annual turnover | Typically £60,000+ per year (£5,000+/month) | Varies by lender, smaller turnover options available in the Capitalise marketplace |
Business structure | Ltd company, sole trader, partnership, or LLP | All structures covered, including sole traders |
How to apply for a short term business loan?
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Check your eligibility
Complete a quick online form with details about your business and funding needs. This helps us understand which short term lenders are best suited to your business.
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Submit your application
Your funding specialist will helps you prepare and submit the required documents to the short term loan lenders. This allows lenders to assess your business and provide funding offers.
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Compare offers and receive funding
Review and compare available any short term loan offers based on rates, terms, and loan type. Once you move forward with a lender and are approved, funds can be transferred in as little as 24 hours.
How much does a short term business loan cost?
The cost of a short term business loan depends on the lender, loan amount, repayment term, your business’s trading history, turnover and credit profile. In the UK, pricing can vary significantly because some lenders quote an APR, while others quote a monthly interest rate or use factor rate pricing. Here's an idea of the costs you can expect:
Business profile | Typical range cost | Example | Example monthly repayment |
|---|---|---|---|
Strong credit with an established trading history | Around 7% - 13% APR | £10,000 over 12 months at 8% APR | Around £870 per month |
Good credit with proven affordability | Around 13%–25% APR | £10,000 over 12 months at 15% APR | Around £903 per month |
Limited or adverse credit, or higher risk borrowing | Around 25% APR and above | £10,000 over 12 months at 25% APR | Around £950+ per month |
*These figures are examples only and exclude any lender fees. Your actual rate, repayment amount and total cost will depend on the lender’s assessment of your business.
Beyond the interest rate, you should check whether an arrangement fee, completion fee or product fee applies, as this can increase the total cost of borrowing. Some lenders allow early repayment without a fee, while others may charge an early repayment fee or apply specific settlement terms. Late payment fees and missed-payment charges vary by lender, so you should confirm these before signing a loan agreement. Capitalise does not charge hidden broker fees. We are paid by the lender, not by you.
Why should you get a short term business loan?
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Faster access to funding
With shorter approval times, you can access the funds your business needs, fast.
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Flexible use
From paying an upcoming tax bill, to upgrading equipment, or handling a cash flow gap, short term loans can be used for any purpose.
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No long term commitments
Perfect for businesses needing quick cash, with repayments completed in a few months, up to 2 years.
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How does a short term business loan work?
A short term business loan gives your business a lump sum of money upfront, which you repay over an agreed period, usually between 3 and 24 months. Repayments are typically made monthly and include both the amount borrowed and the cost of borrowing, such as interest and any lender fees.
The lender will assess your business before making an offer, usually looking at factors such as turnover, trading history, affordability and credit profile.
What are the different types of short term business loans?
Loan type | How it works |
|---|---|
Unsecured business loan | An unsecured short term loan doesn’t require any collateral, which means no assets are at risk. However, the interest rates are usually higher since there’s no security for the lender. |
Revolving credit facility | This option allows you to borrow and repay money as needed, up to a limited amount. You only pay interest on the amount you use, making it a flexible and cost-effective option. |
Business credit card | Business credit cards allow you to make purchases on credit, often with rewards like cashback or points. However, they typically have higher interest rates. |
No personal guarantee business loans | These loans do not require a personal guarantee, meaning the business owner’s personal assets are not at risk if the business defaults on the loan, offering peace of mind. |
Startup loans | Designed for new businesses with little to no financial history, startup loans help entrepreneurs cover initial expenses such as equipment, inventory, and marketing to get their business off the ground. |
Merchant cash advance | A merchant cash advance provides funding that’s repaid through a percentage of daily sales, making it ideal for businesses with fluctuating revenues. Repayments adjust based on how much the business earns. |
If you’re unsure which type is best suited to your business needs, search for a short term business loan with Capitalise. Our dedicated funding specialists will help you to find the best option for your business.
What are the advantages and disadvantages of a short term business loan?
Advantages of a short term loan
Disadvantages of a short term loan
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