Tide Funding Options
iwoca Business Loan
365 Finance Merchant Cash Advance
Capify Business Loan
Fleximize Business Loan
Funding Circle Business Loan
How Short-Term Business Loans Work
Loan Amounts, Terms and Short-Term Options
Short-term finance covers 3 to 18 months, and you pick from three shapes: a revolving credit line, a fixed-term loan, or a merchant cash advance against your card takings. Amounts run from £1,000 on an iwoca line up to £500,000 or more, sized to your recent turnover and cash flow rather than your trading history. Speed is the appeal, and that pace is what you pay the premium for.
How Short-Term Lenders Charge You
Watch how you’re charged: iwoca and Fleximize quote a monthly rate, while Capify and 365 Finance use a factor rate, a fixed multiplier on the amount you borrow. A factor rate of 1.25 means you repay £1.25 for every £1, whatever the timeframe, so clearing it early won’t cut the cost, and the real price of the money stays hidden until you do the sum yourself.
How Short-Term Funds Reach You
Speed is the point: with Open Banking, iwoca and Capify can read your account and fund within 24 hours, and 365 Finance approves within 24 hours and funds within days, where a bank takes weeks to reach the same decision. Connecting your bank feed can bring an offer the same day because the lender can assess current cash flow without waiting for paper statements.
Short-Term Business Loan Costs and Fees
Interest Rates, Factor Rates and Representative APR
You’ll pay far more than on a long-term loan: iwoca quotes a 49% representative APR and Fleximize charges up to 3.9% a month, while Funding Circle’s longer fixed-term loans start from 6.9% a year. The Bank of England base rate is 3.75%, but these lenders price on risk and speed rather than the base rate, so the cost barely tracks it. iwoca’s 49% representative APR buys flexibility, not cheap money, and factor-rate products can cost more still. Either is defensible only when the borrowing solves a short, profitable need that cannot wait.
Fees on Top of the Headline Cost
Your headline cost isn’t the end of it. Capify charges origination and processing fees on top of its factor rate once you make a full application, though it does not publish the amounts. iwoca and Fleximize charge no early repayment fee, while 365 Finance rolls everything into one agreed total repaid from your card takings rather than itemising each charge separately.
Why Short-Term Costs So Much Annualised
Some short-term finance looks especially expensive when annualised because the fee is fixed upfront, unlike bank-loan interest that accrues daily. Repayments also start before the money has had long to produce a return. It suits stock or an urgent cost that should pay back quickly, not planned spending that could use a cheaper loan.
Eligibility for Short-Term Business Loans
Trading History and Turnover
Your recent turnover matters more than your history: most short-term lenders want six months trading, though Capify and Funding Circle ask for twelve. MCA providers like 365 Finance need steady card takings from £10,000 a month, because that figure is what the advance is actually repaid from. Your accountant can usually pull three months of card statements and connect Open Banking in an afternoon, which is often all the underwriter needs for a same-day decision.
Credit Score and Open Banking
Your credit file counts for less here, because Open Banking lets a lender read your live cash flow instead of relying on a score. Open Banking lenders are consistently the fastest to decide, but a weak recent cash flow still shows up in the price: expect a higher rate even with a same-day yes.
Personal Guarantees on Short-Term Loans
Almost every short-term lender wants a personal guarantee, so your own assets back the debt even though no specific asset is secured against it. 365 Finance is the outlier, marketing no security or business plan requirement, though most other merchant cash advance providers still take a guarantee.
How to Compare Short-Term Business Loan Lenders
Comparing Short-Term Lenders by Cost
Cost is rarely a clean comparison here: convert every offer to a total repayment figure including fees, because a factor rate and an APR can’t be measured against each other directly. iwoca and Fleximize are the easier two of the five to price this way, since both quote a straightforward rate; the factor-rate MCAs hide their true annual cost behind a single upfront multiplier.
Comparing Short-Term Lenders by Flexibility
Flexibility matters most when your income is lumpy: a revolving line or an MCA flexes with you, where a fixed-term loan locks you into the same payment every month regardless of how that month actually goes. iwoca lets you draw and repay as your cash flow allows, while 365 Finance shrinks its take automatically on slow days.
Comparing Short-Term Lenders by Speed and Credit
Speed and a thin credit file usually point the same way: Capify and the MCA providers will still say yes where a bank would not, because they price the risk into the cost rather than declining outright. That trade-off is worth taking when you genuinely need the money fast; reached for every time cash gets tight, it becomes an expensive habit, so pick the lender that fits your actual cash-flow pattern rather than the biggest name on the list.
Who Short-Term Business Loans Are Best For
Best Short-Term Loan for Bridging a Cash-Flow Gap
A revolving iwoca line is the best fit for a temporary cash-flow gap, such as a large invoice arriving late or a seasonal dip. You pay only for the days you draw the money, so you are not locked into a fixed schedule after the gap has closed.
Best Short-Term Loan for Card-Revenue Retail
If most of what you take is card payments, a merchant cash advance from 365 Finance fits the shape of the business: repayments rise and fall with your daily takings, so a quiet Tuesday costs you less than a busy Saturday, with no fixed sum to find in a slow week.
When a Different Loan Beats Short-Term
If you’re funding kit, premises or a multi-year project, a longer secured or term loan is far cheaper than draining your cash flow on short-term repayments. Short-term finance only wins when the return lands fast, and for slow-burn growth it is the wrong, expensive tool.
iwoca is the clearest choice for a short, unpredictable gap if its 49% representative APR still leaves the borrowing worthwhile. Businesses repaying from card sales may find 365 Finance easier to live with, and Capify suits a credit file that rules out the cheaper lenders, while Fleximize or Funding Circle suit established firms that can trade some speed for a fixed-term loan. In every case, compare the total amount repayable, including fees; the headline rate alone does not settle the decision.
Frequently Asked Questions
What is a short-term business loan?
A short-term business loan is finance repaid quickly, usually within 3 to 18 months. It covers revolving credit lines, fast fixed-term loans and merchant cash advances. The trade-off for speed and easy access is a higher cost than a standard multi-year loan, and a personal guarantee is usually required.
How much do short-term business loans cost?
Expect to pay far more than for a bank loan: iwoca quotes a 49% representative APR, and Fleximize charges up to 3.9% a month, against Funding Circle rates from 6.9% a year. Factor-rate products such as merchant cash advances fix the cost upfront, so repaying early does not reduce it. Always convert an offer to a total repayment figure before you sign.
What is a merchant cash advance and how does it work?
A merchant cash advance gives you a lump sum against your future card takings. The lender then takes a fixed share of each day’s card sales until an agreed total is repaid, so payments rise on busy days and shrink on slow ones. It’s priced on a factor rate, not an APR, and suits card-revenue retail and hospitality businesses.
Can you get a short-term business loan with bad credit?
Yes. Capify and the merchant cash advance providers consider adverse credit and CCJs, because they assess your turnover and cash flow rather than relying on a credit score. You’ll pay a higher factor rate to reflect the risk, and a personal guarantee is required.
How fast can you get a short-term business loan?
Very fast. Using Open Banking, iwoca and Capify often decide the same day and fund within 24 hours, 365 Finance approves within 24 hours and funds within days, and Fleximize funds within 48 hours. That speed is the main reason short-term finance costs more than a slower high-street loan.
Do short-term business loans need a personal guarantee?
Almost always. Capify, Fleximize and most merchant cash advance providers require a personal guarantee from a director, and iwoca may ask for one, so you are personally liable if the business defaults. 365 Finance is an exception that markets no security or business plan, though it still advances against your card takings.
How We Reviewed Short-Term Business Loan Lenders
Ranking criteria. We ranked lenders on total cost, speed, flexibility and eligibility, giving the greatest weight to cost and pricing clarity. APRs, monthly rates and factor rates can make unlike offers look comparable when they are not.
Data sources. Rates, limits and eligibility were checked directly in October 2026: iwoca, 365 Finance, Capify, Fleximize and Funding Circle. No comparison sites and no press releases.
Update cadence. We re-verify every lender on this page regularly, and whenever a lender changes pricing, eligibility or terms. The verification date reflects the most recent full review. Some links on this page are affiliate links, see our editorial policy.
Regulatory note. This is editorial content, not regulated financial advice. Most short-term business lending and merchant cash advances are unregulated B2B agreements. Credit is subject to status and approval; compare offers directly before you apply.