Short-Term Business Financing Options Compared
| Option | Min. Credit | Speed | Term | Cost |
|---|---|---|---|---|
| Merchant Cash Advance | 500 FICO | 1-3 days | 4-18 months | Factor 1.10-1.50 |
| Online Term Loan | 580+ FICO | 1-5 days | 3-24 months | 20-99% APR |
| Business Line of Credit | 620+ FICO | 3-10 days | Revolving | 10-30% APR |
| Invoice Factoring | None | 1-3 days | Invoice cycle | 1-5%/month |
SBA short-term working capital loans take 30-90 days — not viable when capital is needed immediately. See full comparison →
When a Short-Term Loan Makes Sense
Revenue is coming but payroll is due now. MCA bridges the timing gap without missing a pay cycle.
Need to stock up before a high-revenue period. Short-term capital enables the purchase; peak revenue repays it.
Equipment failure that stops revenue. Fast capital restores operations quickly.
A 5-10% discount for immediate payment that exceeds the advance cost. Net positive when cost of capital is less than the discount.
A marketing spend that returns 3-5x in revenue within the repayment window. Capital generates more than it costs.
A bank decline based on credit history, not revenue performance. MCA evaluates your deposits, not your FICO score.
How MCA Repayment Works vs. a Traditional Short-Term Loan
Traditional Short-Term Loan
- Fixed weekly or monthly payments
- Stated APR (often 20-80%)
- Late payment fees if cash flow dips
- May require collateral
- Default risk if revenue drops
Merchant Cash Advance
- % of daily deposits — no fixed payment
- Factor rate, not APR
- Repayment slows when revenue slows
- No collateral required
- No late fees — payment scales with revenue
For businesses with variable or seasonal revenue, MCA's flexible repayment can be significantly less risky than a fixed payment loan. → Learn exactly how MCA repayment works
Capital when you need it, not when the bank is ready
Apply for Short-Term Business Funding Today
Short-Term Business Loan FAQ
What is a short-term business loan?
A short-term business loan provides capital repaid over 3-24 months — used for immediate operational needs like payroll, inventory, or cash flow gaps rather than long-term investments. Merchant cash advances (MCA) are the most accessible short-term option: funded in 1-3 days, repaid over 4-18 months via daily percentage of bank deposits. No collateral required, 500 FICO minimum.
What is the fastest short-term business loan?
Merchant cash advances fund in 1-3 business days, making them the fastest short-term business financing available. For complete submissions received before noon, same-day funding is routinely achieved. Business lines of credit take 3-10 days. Online term loans take 1-5 days. SBA short-term working capital loans take 30-60 days.
Can I get a short-term business loan with bad credit?
Yes. Merchant cash advances are available with as low as 500 FICO because approval is based on monthly revenue, not credit score. Revenue-based repayment means there is no fixed monthly payment — the advance is repaid as a percentage of your daily deposits, which adjusts with your revenue. Traditional short-term business loans from banks typically require 620-640+ FICO.
How much can I borrow with a short-term business loan?
Through an MCA: $5,000-$1,000,000 based on 75-150% of average monthly bank deposits. Through a short-term business line of credit: $10,000-$250,000. Through online short-term lenders: $5,000-$500,000 at 20-99% APR. First-time MCA applicants most commonly qualify for 1-1.5x their average monthly deposits.
What is the difference between a short-term loan and an MCA?
A short-term business loan is debt with a fixed repayment schedule (weekly or monthly payments at a stated APR). An MCA is a purchase of future receivables — you receive a lump sum and repay a fixed percentage of your daily bank deposits until the purchased amount is fully repaid. MCA has no fixed monthly payment, no interest rate (uses factor rates), and repayment automatically slows when revenue is slow.
Related Resources
When MCA Is Better Than a Short-Term Loan
Short-term business loans and merchant cash advances serve the same function — fast working capital — but they work very differently. A short-term loan (typically 3–24 months) has a fixed monthly payment regardless of revenue. An MCA has a variable daily payment that scales with your card sales. For businesses with predictable monthly revenue and strong credit, a short-term loan often offers a lower effective cost. For businesses with variable revenue, seasonal swings, or credit challenges, MCA is usually more accessible and safer to cash-flow manage.
- Approval Speed
- Short-term loan: 2–10 business days for most fintech lenders; 3–6 weeks for banks. MCA: 24–72 hours from application to funded.
- Credit Requirements
- Short-term loan: typically 580–650+ FICO minimum. MCA: 500+ FICO minimum, revenue is the primary factor.
- Repayment Structure
- Short-term loan: fixed monthly payment regardless of revenue. MCA: daily holdback percentage scales with card volume — slower months mean smaller payments.
- Collateral
- Short-term loan: often requires UCC filing or personal guarantee. MCA: no collateral, no UCC lien on business assets.
- Best For
- Short-term loan: businesses with predictable revenue, 650+ FICO, and 2+ years in business who can wait 1–2 weeks. MCA: businesses that need capital in 24–72 hours, have variable revenue, or have credit scores below 620.
Short-Term Business Funding FAQ
- What is the minimum FICO for a short-term business loan?
- Most online short-term business lenders require 580–620+ FICO. Bank-issued short-term loans typically require 650–680+. MCA has no traditional credit threshold — T.A.G. requires a minimum 500 FICO and uses revenue as the primary underwriting factor. A business with a 540 FICO and $40,000/month in deposits will typically qualify for MCA where a short-term loan would be declined.
- Is an MCA the same as a short-term business loan?
- No — they are fundamentally different structures. A short-term loan is debt: you borrow a fixed amount and repay it with interest on a fixed schedule, and the lender reports to credit bureaus. An MCA is not a loan — it is the purchase of a portion of your future receivables. There is no fixed interest rate, no credit bureau reporting, and repayment is automatic via daily holdback from card sales. MCA is faster and more accessible; short-term loans are typically cheaper if you qualify.
- How fast can a business get short-term funding?
- Via MCA (the fastest option): approval in 4–8 hours, funds in 24–72 hours. Via online short-term loan (OnDeck, Fundbox, etc.): 1–3 business days. Via bank short-term loan: 1–4 weeks depending on the lender and loan size. T.A.G. specializes in the 24–72 hour funding window — if you need capital by Friday, applying Monday morning gives you buffer time to review your offer and sign before funds transfer.