Lending Box

Short-term business loans

A short-term business loan is designed to be repaid quickly, typically over a few months up to around two years, rather than stretching across several years like a traditional term loan. Businesses use them to bridge gaps, fund a specific project, or take advantage of an opportunity without committing to a long-term facility.

Because the term is short, lenders often focus heavily on current trading and cash flow rather than long credit histories. This page explains how short-term lending works, what it costs, and when it makes sense. Lending Box is a whole of market broker, not a lender, so we compare options for you but every lending decision is made by the lender.

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Updated 2 October 2026 · Lending Box editorial team

Who it's for
UK Ltd companies, PLCs and LLPs needing finance for a short, defined period
Typical amounts
£5,000 up to £1,000,000
Typical terms
3 months to around 2 years
Minimum turnover
£100,000 a year to use Lending Box
Security
Usually unsecured with a personal guarantee; secured options also available

Indicative only. Subject to lender assessment and approval.

Who it's for

  • Businesses with a short-term cash flow gap, such as waiting on a large invoice or seasonal dip.
  • Companies funding a specific, time-limited project or opportunity, like a bulk stock purchase.
  • Businesses that would rather clear a debt quickly than spread it over several years, even if monthly payments are higher.
  • Companies that need a decision and funds reasonably quickly, without the process a long-term facility can involve.

How it works

  1. 1You tell us the amount, the term you'd like, and what the finance is for.
  2. 2We review your bank statements and basic company details to see which lenders are likely to be a realistic fit.
  3. 3A specialist talks through the options, including total cost over the term, before you choose a lender to proceed with.
  4. 4Once approved, funds are typically paid directly into the business account, with repayments collected daily, weekly or monthly depending on the lender.

How short-term loans are priced

Many short-term business loans are priced as a fixed total cost for the term rather than a traditional annual interest rate — for example, a fee expressed as a percentage of the amount borrowed, repaid in equal instalments. It's worth asking for the total repayable and comparing it against the amount borrowed, not just a headline rate.

  • A fixed fee loan quotes one total cost regardless of exactly when it's repaid, unless you settle early with an agreed discount.
  • Some lenders offer early settlement discounts; others don't, so it's worth checking before you commit.
  • Repayment frequency (daily, weekly or monthly) affects cash flow more than it affects total cost.

When a short-term loan makes sense

Short-term finance tends to work best for clearly defined, short-lived needs rather than ongoing working capital.

  • Bridging a gap until a specific invoice or contract payment lands.
  • Funding stock for a known seasonal peak, repaid once the stock is sold.
  • Covering a one-off cost, such as a repair, VAT bill, or opportunity to buy at a discount for cash.
  • A short gap before longer-term finance, such as a commercial mortgage, completes.

Alternatives worth comparing

Short-term loans aren't the only option for a short-term need, and a specialist can help you weigh them up.

  • A business credit card or flexible overdraft, for smaller or recurring gaps.
  • Invoice finance, if the gap is specifically waiting on customer payments.
  • Revenue-based finance, if repayments flexing with income would suit you better.
  • A longer-term loan, if spreading the cost over more months would ease monthly cash flow even at a higher total cost.

How a broker helps

Short-term lenders vary considerably in how they price and structure repayments, and the headline rate rarely tells the whole story. As a whole of market broker, we compare realistic options side by side so you can see the total cost before deciding. Our service is free to your business; we're paid a commission or finder's fee by the lender if finance completes, as set out in our Broker Terms.

Eligibility

  • A UK limited company, PLC or LLP (not sole traders or partnerships).
  • Annual turnover of at least £100,000.
  • Usually at least 6 months of trading, though this varies by lender.
  • A business bank account showing regular income.
  • Directors willing to give a personal guarantee in most cases.

Documents you'll need

  • 3–6 months of business bank statements.
  • Latest filed accounts, if available.
  • Details of what the funds will be used for.
  • Details of any existing finance and its repayments.
  • Photo ID and proof of address for directors.

Advantages

  • Can be arranged and funded faster than longer-term facilities, as lenders often rely mainly on bank statements.
  • You stop paying interest sooner than with a longer loan, since the term is short by design.
  • Useful for genuinely short-term needs, avoiding being tied into finance for years.
  • Available to a reasonably wide range of credit profiles, since lenders focus on current trading.

Things to weigh up

  • Monthly, weekly or daily repayments are higher relative to the amount borrowed than with a longer-term loan.
  • Annualised cost can look high even where the total fee is reasonable, because the term is short.
  • Not well suited to funding something that won't generate a return or saving within the loan term.
  • Taking out several short-term loans back to back can strain cash flow — worth reviewing with a specialist first.

Worked example (illustrative)

A catering company needs £20,000 for six months to cover a busy events season, expecting payments from clients to land over the following few months.

A specialist lender quotes an illustrative fixed fee equivalent to roughly 12% of the amount for a 6-month term, meaning a total repayable of around £22,400.

Using the business loan calculator below, that works out at roughly £3,735 a month over 6 months. The real cost and term depend on the lender's own assessment and pricing.

Business loan calculator

£
£1,000£1,000,000
3 months72 months
%

Monthly repayment

£2,307.25

Total repayment
£55,373.91
Total interest
£5,373.91
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Representative example: borrowing £50,000 over 24 months at 10% a year would cost £2,307.25 a month, £55,373.91 in total, including £5,373.91 interest.

Illustrative only. Your actual rate depends on your circumstances. Indicative only. Subject to lender assessment and approval.

Frequently asked questions

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Lending Box helps UK businesses access business finance, working directly with businesses and their trusted advisers. We are a credit broker and do not provide loans ourselves. All finance and quotes are subject to status and income. Applicants must be aged 18 or over, and terms and conditions apply. Guarantees and indemnities may be required. Lending Box can introduce applicants to a number of providers based on each applicant's circumstances and creditworthiness. We can also make insurance introductions. Lending Box will receive a commission or finder's fee for arranging such finance and insurance introductions. Broker Terms

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UK limited companies and LLPs. Indicative only. Subject to lender assessment and approval.

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