Last updated: 26 Oct 2026

Compare short term business loans and get funded fast

Short term business loans

A short term business loan is a lump sum your business borrows and repays, with interest, over 3 to 24 months. With Capitalise, you can borrow from £1,000 and compare short term business loans from our panel of 130+ UK lenders with one application.

  • Borrow from £1,000 and repay over 3 to 24 months

  • Check your options without affecting your credit score

  • Get support from a dedicated funding specialist

  • Receive funds in as little as 48 hours, if approved

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  • Access 130+ UK business lenders

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What is a short term business loan?

A short term business loan gives your business a lump sum of capital that you repay, with interest, over a period of 3 to 24 months. Businesses use them to cover immediate cash flow needs, manage seasonal costs, buy stock, fund a project or deal with an unexpected expense. Short term business loans are designed for speed and flexibility and funds can reach your account in as little as 48 hours once you're approved.

Because you repay over a shorter period, your monthly repayments are usually higher than with long term business loans. You'll often pay less interest in total, though, since you're borrowing for less time. That's why it's worth comparing the total cost of each offer, not just the monthly repayment.

How does a short term business loan work?

A short term loan works by a lender paying a lump sum into your business account upfront. You then repay it over an agreed term, usually in fixed monthly instalments that cover both the amount you borrowed and the cost of borrowing, such as interest and any lender fees. Some lenders collect repayments weekly or daily instead, so check the schedule suits the way money comes into your business. Before making an offer, the lender will assess your business. Most look at your turnover, trading history, affordability and business credit profile. Short term business loans can be unsecured, with no asset needed as security, or secured against a business asset. Many lenders also ask company directors for a personal guarantee.

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.

How much can you borrow with a short term business loan?

Lenders on our panel offer short term business loans from £1,000. How much you can borrow depends mainly on your turnover, trading history, business credit score and whether the loan is secured or unsecured. Lenders will check that the repayments are affordable from your recent income, so it's sensible to borrow only what you need and can comfortably repay within the term. Our business loan calculator shows your estimated monthly repayments and total interest before you apply.

Am I eligible for a short term business loan?

Eligibility for a short term business loan varies by lender. That's why comparing our panel of 130+ lenders gives you a better chance of approval than applying to one lender. These are the general criteria most lenders look for.

Criteria

Typical requirement

How Capitalise helps

Trading history

At least 6 to 12 months of trading

Some lenders accept businesses trading for 3 months, and your specialist matches you to them

Business credit score

Good credit is preferred but not always required

Businesses with bad credit can be matched to specialist lenders

UK registration

Your business must be registered and trading in the UK

Required by every lender on our panel

Annual turnover

Typically £60,000 or more a year (around £5,000 a month)

Varies by lender, and options for smaller turnovers are available

Business structure

Limited company, sole trader, partnership or LLP

All structures are covered, including sole traders

What are the different types of short term business loans?

  • Unsecured business loans

    An unsecured business loan doesn't require any collateral, so no business assets are at risk. Interest rates are usually higher, because the lender has no security.

  • Merchant cash advance

    A merchant cash advance gives you funding that you repay as a percentage of your daily card sales. Repayments rise and fall with your takings, which suits businesses with changing revenue.

  • No personal guarantee business loans

    No personal guarantee business loans don't ask directors to personally guarantee the debt. Your personal assets aren't at risk if the business can't repay, which offers peace of mind.

  • Revolving credit facilities

    A revolving credit facility lets you borrow, repay and borrow again up to an agreed limit. You only pay interest on the amount you use, which makes it a flexible and cost effective option.

  • Business credit cards

    Business credit cards let you make purchases on credit, often with rewards such as cashback or points. They typically have higher interest rates if you don't clear the balance each month.

How much does a short term business loan cost?

The cost of a short term business loan depends on the lender, the amount you borrow, the repayment term and your business's trading history, turnover and credit profile. Pricing can vary a lot between UK lenders, because some quote an annual percentage rate (APR), others quote a monthly interest rate and some use a fixed fee called a factor rate. This table shows the typical APR range for different business profiles and what a £10,000 loan repaid over 12 months would cost across each range.

Business profile

Typical APR range

Monthly repayment

Total interest

Total repaid

Strong credit with an established trading history

7% to 13% APR

£864 to £890

£371 to £678

£10,371 to £10,678

Good credit with proven affordability

13% to 25% APR

£890 to £938

£678 to £1,262

£10,678 to £11,262

Limited or adverse credit, or higher risk borrowing

25% APR and above

£938 or more

£1,262 or more

£11,262 or more

These figures are examples only and exclude lender fees. Your actual rate, repayments and total cost will depend on the lender's assessment of your business. Beyond the interest rate, check whether an arrangement fee, completion fee or product fee applies, as these increase the total cost of borrowing. Some lenders let you repay early without a fee, while others charge an early repayment fee or apply specific settlement terms. Late payment and missed payment charges also vary by lender, so confirm these before you sign a loan agreement. Capitalise doesn't charge you hidden broker fees. Lenders pay us, not you.

What are the advantages and disadvantages of a short term business loan?

  • Advantages of a short term loan

    • Short term loans are usually processed quickly, so businesses can get the money they need fast - often in as little as 48 hours.

    • You can use the loan for many different purposes, such as paying bills, buying stock, or covering unexpected costs.

    • Successfully repaying short term loans can help establish or improve your business credit profile.

  • Disadvantages of a short term loan

    • Short term loans usually have higher interest rates than longer term loans, which can make the cost of borrowing higher.

    • The amount you can borrow is generally smaller, so it might not be enough for bigger projects or major expenses.

    • The frequent repayments can sometimes negatively impact a business’ cash flow.

What documents do you need for a short term business loan?

Most lenders ask for the same core documents for a short term business loan, here's what you can expect to provide:

  • Six months of business bank statements, so the lender can see your recent income and spending.

  • Your most recent filed accounts, or management accounts if your business is too new to have filed any.

  • Proof of identity for each company director, such as a passport or driving licence.

  • Basic details about your business, including how much you want to borrow and what you’ll use it for.

How to apply for a short term business loan?

  • Green circle with a white number "1" in the center.

    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.

  • Green circle with white number "2" in the center.

    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.

  • Green circle with the white number 3 in the center.

    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.

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Page last reviewed on by Nick Richardson