Short-term business loans - Flexible finance when you need it most
Short-term business loans provide fast funding for cash flow, emergencies, or growth—typically repaid over 3–24 months. Compare options from 80+ UK lenders in minutes with Funding Options by Tide.
Last updated: October 2025, edited by Joe Morley, reviewed by Vivek Seda
What is a short-term business loan and how it works
What is a short-term business loan?
A short-term loan is a type of business loan designed to be repaid quickly—usually within a year or two. Instead of tying you into long-term commitments, it provides quick working capital for urgent needs.
Repayments are often more frequent (weekly or monthly), and interest rates may be slightly higher than long-term loans due to the shorter repayment window.
How do short-term loans work?
The process is simple:
Apply for the amount you need—say £25,000.
Provide recent bank statements, accounts and ID.
Once approved, the money can reach your account in 24–48 hours.
Repay in regular instalments (weekly or monthly) over 3–24 months.
Clear the loan early if you wish—many lenders allow this.
Types of short term business loans
Unsecured business loans
No collateral required, based on your credit profile.
Secured business loans
Merchant cash advance
Merchant cash advance borrows against future card sales
Invoice finance
Invoice finance releases money tied up in unpaid invoices.
Asset finance
Asset finance is used to fund vehicles, machinery and equipment.
Business overdraft
Business overdraft is linked to your account, but often lower limits and higher rates.
When are short-term loans useful?
Businesses use short-term finance for:
Covering seasonal cash flow dips
Paying urgent bills like VAT or payroll
Buying stock to fulfil a new order
Investing in marketing campaigns
Handling unexpected repairs or equipment upgrades
For ongoing cash flow needs, consider alternatives like a revolving credit facility or invoice finance.
Pros and cons of short-term loans
Pros | Cons |
Quick access to funds (24–48 hours possible) | Higher interest rates than long-term loans |
Flexible repayment terms (3–24 months) | Larger repayments due to shorter term |
Useful for emergencies or opportunities | Can strain cash flow if not managed |
May be easier to qualify for | Not suitable for large, long-term projects |
Potential to improve credit if repaid on time | Fees may apply for early repayment |
What can I use a short term business loan for?
Cash flow
You can use short term business loans to manage cash flow and navigate seasonal variations (e.g. for seasonal businesses, revenue can go up in Christmas but fall in February).
Emergency costs
Smooth out financial emergencies, pay for broken equipment, or purchase an essential tool with the support of small business loans.
Inventory
Buy stock or inventory with a short term business loan - you can even use them to capitalise on a time-sensitive offer extended by a supplier.
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How does Funding Options work?
Tell us how much you need
We’ll ask a few questions about your business and the reason for your loan.
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Why choose Funding Options by Tide?
Funding Options by Tide helps UK SMEs find fast, tailored business finance by connecting them with over 80 trusted lenders. Backed by Tide and FCA-regulated, the service is free and easy to use.
Compare 80+ UK lenders in minutes
We scan the market so you don’t have to, finding the right option for your business.
Trusted by 17,000+ UK businesses
From startups to established SMEs, we’ve already helped secure over £1bn in funding.
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We operate as a credit broker, not a lender, giving impartial access to multiple finance products.
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Personalised support
Our team can guide you through the process and help you choose the finance that fits your needs.
Estimate your costs today
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
Monthly payments
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Total interest
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Financial product information
Representative example*
• 9.7% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,291.56. The total amount payable is £54,997.44
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 8.2% APR
Repayment period
1 month to 30 years terms
Want to find out more about short term business loans?
How much can I borrow with a short-term loan?
Amounts typically range from £1,000 to £500,000 depending on turnover, credit and security.
Are short-term loans more expensive?
They can be, because repayments are compressed into a shorter period. Compare APR and total repayable before committing.
Can I repay early?
Many lenders allow early repayment, sometimes with reduced interest, though fees may apply.
Can startups get short-term loans?
It may be harder without trading history. Alternatives include business loans for new businesses or equity finance.
What’s the difference between short and long-term loans?
Short-term loans are typically repaid within 3–24 months, while long-term loans can run for 3–10 years or more.
Short-term lending can lead to financial difficulty and is not suitable for everyone. Contact us for support if you ever face difficulties making your repayments. Warning: Late repayment can cause you serious money problems. For help go to moneyhelper.org.uk
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
Joe Morley
Business Finance Lead
Joe has been helping UK businesses secure the funding they need since 2015. Over the years, he’s supported hundreds of SMEs in accessing millions of pounds for everything from purchasing essential assets to unlocking working capital for day-to-day operations. As Head of Sales at Funding Options, Joe leads a large team of expert Business Finance Specialists dedicated to finding the right solution for every customer. His goal is simple - to make securing finance straightforward, stress free, and tailored to each business’s needs.