Short term business loans explained: what is a short term business loan?

The Pros and Cons of Short Term Business Loans

The Pros The Cons
  • A short-term business loan provides fast access to capital that you can use to remedy your most pressing business issues.
  • Lenders tend to process applications quickly, which means you’ll usually receive approval within 24 hours. This assumes that you meet the criteria that the lender has in place. Some specialist lenders can even provide pre-approval in a matter of minutes.
  • Businesses with poor credit histories may still be able to access a short-term loan. This makes them a viable alternative for those who can’t get approval on a long-term loan from a major bank or lender.
  • The fast approval process often means that short-term loans come with higher interest rates than long-term loans. This means you may have to pay more for access to the same amount of money. To mitigate this, many lenders offer discounts to those who repay their short-term loans early.
  • Some short-term lenders offer inflexible repayment conditions. In some cases, you may have to make weekly, or even daily, repayments. This is not the case with all lenders though. Make sure you consider all of your options to avoid inflexible repayment schedules.
  • As with all loan types, you may face penalties and fees if you’re unable to make your repayments.

How do short term business loans benefit small business?

  • In a short-term, there is less total interest payment compared to a longer-term loan
  • It is a source of quick capital, it can help small businesses with their working capital flow and allow them to dedicate their focus to more areas of the business.
  • Credit score booster, short term loans are faster to pay off the due amount. By paying the loan on time, the results for an improved credit score is almost instant.
  • Generally, short term loans are faster to pay off the due amount. By paying the loan on time, the results for an improved credit score is almost instant.

Who might need a short-term business loan?

  • Start-Up Businesses. Brand new businesses often can’t offer much in the way of security for a long-term loan. They also have to deal with set-up costs that more established businesses don’t have to worry about. These initial costs can place a huge burden on the start-up. Short-term business loans can alleviate that burden and provide a start-up with the capital needed to get up and running.
  • Fast-Growing Businesses. Rapid business expansion may occur if you achieve unexpected success. While this is a boon to the business, it also adds pressure to your operations. You may need to hire new people, buy new equipment, and set up more infrastructure to keep pace with the growth. A short-term business loan provides the capital needed. You can then rely on the growth of the business to help with the repayments.
  • Businesses with Cash Flow Issues. Many small businesses rely on timely invoice payments from their clients. Any delays could lead to cash flow issues that prevent them from paying their own bills. Moreover, chasing delayed payments could lead to the business facing legal costs. A short-term business loan can help such businesses remain solvent while they get their cash flow situations in order. One of Max Funding’s clients used a short-term loan for this very purpose. Poised to buy a new premises, the client experienced cash flow hiccups as the purchase drew to a close. Max Funding helped them to secure a short-term loan of $885,000 so they could complete settlement.
  • Businesses in Emergency Situation. Often, the source of your money issues may not stem from business-related issues. Emergency situations can lead to you needing access to money quickly to remedy them. For example, hardware and maintenance issues could prevent the business from operating. Your funds may not cover the repair costs, which would leave the business unable to generate income. A short-term business loan can remedy the immediate problem to ensure the business stays in operation.
Short Term Business Loans Long Term Business Loans
Loan Terms 3 to 18 month 3 to 20 years
Interest Rate Higher interest rates Lower interest rates
Credit score No good credit score required Good credit score required
  • Maintain cash flow gaps
  • Quick fund arrangement
  • Flexibility
  • Easy repayment option
  • Cash flow maintenance
  • Minimize investor interference
  • Leasing
  • Build credit history

Can I get a short term business loan if I have bad credit?

Yes, at Max Funding, we understand that bad credit doesn’t automatically equate to irresponsibility. We believe in second chances, and strive to give as many bad credit short term loans as responsibly as possible.

Why are Max Funding short term business loans better?

At Max Funding, we pride ourselves in being a short-term business financing specialist that caters to all small to medium enterprises in Australia.

Here is why we stand out:

  • Borrow from $2,000 to $1,000,000
  • Easy to qualify
  • Funds are available in 24-48 hours after applying
  • Unlike general short-term loans, our loans are much more flexible with a repayment term of up to 36 months
  • Low-interest rates and flexible repayment terms
  • Pay off early to save interest
  • Interest is tax deductible
  • Complete online application in just minutes
  • If you find a lower rate, we are determined to beat it!

Whether you are looking to purchase equipment, expand your business or looking to relieve working capital, a short-term business loan is a wise financing choice. Our loans enable readiness, durability and flexibility. Even if you do not expect something to happen, extra cash flow may be a wise choice.

Our loans are fast and easy to approve. Obtain funding within just 24-48 after your loan application.

We have helped clients all around Australia, whether you are in Melbourne, Sydney, Brisbane or Adelaide, we can help.

Recent Cases

Client Name: Michael Rilley
Industry: Construction
Loan Amount: $110,000
Terms: 9 months

Situation: Michael’s construction business was bidding for a big contract with a telecommunications company. However, his staff needed to undergo a specific training to be able to do this job and Michael currently didn’t have the necessary funding to afford it.

Solution: Max Funding was able to give Michael a quick loan approval and he was able to send his staff through training, which lead to him landing the big contract and further grow his business.

Client Name: Jasmine Wynack
Industry: Retailer
Loan Amount: $375,000
Terms: 12 months

Situation: Jasmine was currently in the middle of arranging a large loan for her business; however the processing of the other lender was taking longer than she expected. Her business started to suffer and was in urgent need of funding to pay her bills.

Solution: Max Funding were able to approve her loan with minimal processing time and Jasmine was able to keep her business from going in the red. On top of that, when Jasmine received the funds from the other slower lender, she was able to pay off her loan with Max Funding and save on half of the unpaid interest, with no penalty fees.

Grant short term business loan today from Max Funding

Max Funding specialises in providing short term business loans to business owners across all over Australia. Typically, banks and other lenders will tend to require more time to process your loan application for short term business funding. However, at Max Funding, we pride ourselves in our engagement of being invested into helping our client’s situation. Our friendly team is always ready to help your business reach the next stage. Fill out the application form, and get your business funding today!

How to apply for a short term business loans?

To apply for short-term business funding, it’s easy.

  1. Fill out the online pre-approval which only takes 5 minutes to complete.
  2. Our dedicated team at Max Funding, will give you an instant approval decision upon completing your online application form. All that is required of you is to upload a few basic documents for verification.
  3. If you are a successful loan applicant, the funds can be transferred to you within just 24 hours. Furthermore, you can obtain access to additional funding at any time with your free line of credit.

You’ll be amazed at how easy it is to apply for a loan through our website. Filling out the pre-approval form places you under no obligation to continue with the loan process. And thanks to our advanced approval algorithms, we’re able to provide you with a decision in approximately five minutes.

The essential short-term business loan checklist

As with any loan, poor preparation can lead to you running into issues. Use this checklist to ensure you’re ready to take out a loan and avoid any problems.

  1. Know exactly what you'll use the loan for
  2. It’s not a good idea to apply for a loan when you have no direct purpose. You may feel like you want some capital ready for the “just in case”. But you’ll end up repaying the money that you’ve borrowed without ever using it for anything useful.

    A short-term business loan may not be the best choice if you have no immediate plans for the cash. Instead, it’s best to outline the exact ways that you’ll use the money. Of course, many lenders will also want to know the purpose of the loan. If you can’t provide one, they’re likely to refuse your application.

    There’s an added benefit to doing this. Listing the reasons why you need the money also gives you time to determine the exact cost of each issue you identify. This means you can apply for exactly the amount you need.

  3. Ensure you have the means to repay
  4. Generally speaking, you’ll pay more interest in total on a short-term loan than a long-term one. Moreover, the shorter term usually means that you have higher monthly repayments to deal with.

    None of that will be an issue as long as you know you have the means to repay. For example, you may take out the loan to keep the business going because your clients haven’t paid their invoices on time. In that situation, you know you have money coming in that you can use to handle the repayments.

  5. Check your credit rating
  6. You can usually access short-term loans even if you have a poor credit rating. However, a lower rating could lead to more stringent requirements. Plus, you may have to deal with a higher interest rate.

    As a result, it’s best to know where your credit rating stands before you apply. This gives you more reasonable expectations in relation to the terms of the loan.

  7. Find a suitable lender
  8. Research is the key here. Don’t just go with the first lender that you come across. Spend some time comparing different lenders. Aim for lenders that offer flexibility and fast approval. That’s what a Max Funding client found after working with us. An unexpected contract rescission left the client at risk of losing a business opportunity. Max Funding helped them to secure a $100,000 loan in less than 24 hours.

  9. Compare loan offers and features
  10. Checking interest rates is the obvious first step. But it’s also worth checking comparison rates, if you can find the figures. These rates tend to provide a more realistic view of the rate you end up paying.

    Ask the lenders about the specific features that they offer too. Keep in mind that short-term loans come with short repayment windows. Any lenders that offer more flexibility in this area should shoot to the top of your list.

    Also, consider the differences between fixed and variable interest rates. A fixed rate may work well if the current national interest rate is low. But you want to avoid fixing yourself into a high rate. A variable rate may be the best choice if you feel like the national rate will decrease during your loan period.

FAQs about Short Term Business Loans

To apply for a short term business loan, it’s very easy. Simply complete the obligation free application form and within just 24 hours, funds will be transferred to you.
For more information, head over to our How To Apply page to see just how simple the whole process is.
A short-term business loan is just like what its name suggest; a loan paid off in a short period of time. For most short-term lenders in Australia, a loan is classified to be ‘short-term’ if the repayment period is less than 24 months. However, at Max Funding, we believe that more flexibility is possible without taking the loan into the long-term territory, and can last as long as 36 months.
To put it all together, with Max Funding, a short-term business loan is simply a loan that is to be repaid within the span of 36 months.
Yes, to apply online, simply fill out our online-pre approval form which takes just 5 minutes. With Max Funding, it’s easy to be eligible. We cater our services to businesses regardless of whether they are existing or new.
A free line of credit is attached to the short-term business loan and every other loan (excluding USB) offered at Max Funding. To access your line of credit, email your desired amount, and the team at Max Funding will take care of the rest for you.
Unlike traditional banks, Max Funding tailors to businesses of all sizes, regardless of whether they are new or existing. Max Funding provides more flexible terms than traditional banks in their short term business loans, with an extended repayment period of 36 months compared to the 24 month term for a traditional bank. Max Funding also allows clients to borrow as little as $2,000 in comparison to the bank’s minimum of $50,000.
To find more on how a loan from Max Funding might differ from a traditional bank loan, head over to our Max Funding VS. Bank comparison for more information.