Quick answer
A short term business loan is repaid in months, not years. Company Cash loans of $20,000 to $50,000 are built to be repaid in one, two or three months from cash flow or a refinance, with the option to extend for longer if the business needs it.
Key points
- Designed to be repaid in one to three months.
- Up to three months of prepaid interest, then weekly repayments.
- Can be extended if you need longer.
- Secured on property, no cash flow evidence.
- Typical term
- One, two or three months
- Extension
- Possible if you need longer
- Repayments
- Up to three months prepaid interest, then weekly
- Loan size
- $20,000 to $50,000
Short term borrowing is a tool for a specific job: bridging a gap you expect to close soon. A customer pays late. A tax bill arrives before the quarter’s takings do. A supplier offers a discount for paying upfront. Each problem is temporary, so the loan should be too. A five-year loan for a six-week gap is poor value.
What “short term” means here
Lenders use the phrase loosely. Some say short term means twelve months. At Company Cash it means one, two or three months: you borrow $20,000 to $50,000, secured on property or a company vehicle, and plan to repay within a quarter. If that turns out to be too tight, you can extend for a longer period.
How the repayments work
A short loan is easier to plan when you know how money moves. Ours usually starts with up to three months of prepaid interest, so nothing comes out of your account in that period. After that, repayments are weekly. The idea is simple: breathing space first, then a rhythm you can live with. The detail is on our prepaid interest and weekly repayments page.
Three ways a short term loan ends
- Repay from cash flow. The gap closes, customers pay, and you clear the loan out of normal trading. This is the most common ending.
- Refinance. You refinance the property or another asset with a bank or a cheaper lender once your records look stronger.
- Extend. If the business needs longer, you ask to extend. This should be a decision, not a surprise, so ask about fees and terms before you agree.
The worst ending is having no plan. Before borrowing, write down which of the three you expect and what date you expect it. Lenders will ask, and so should you. Our exit strategies page goes into the options.
Short term loans in real situations
A café with a quiet winter. Takings dip for eight weeks, rent and wages do not. A short loan covers the gap, and summer trade repays it.
A tradie waiting on a big invoice. The job is finished, the client pays in sixty days, and materials and wages are due now. A short loan bridges the sixty days.
A company with a tax bill. An ATO debt falls due before the quarter ends. A short loan clears it, and normal cash flow repays the loan.
An owner stacking small loans. Several cash flow loans are debiting daily. One short secured loan wraps them up, with a prepaid interest period to catch breath.
What to check before you sign
- What is the total amount you will repay, including fees?
- How many weeks of repayments follow the prepaid interest period?
- What does it cost to extend, and for how long?
- What happens if a payment is missed?
- Can you repay early, and are there any terms if you do?
The ASIC guide to unfair contract terms explains protections for small business contracts. If you are unsure, an accountant or lawyer can read the contract with you.
Is short term right for you?
It suits you if the problem is temporary, you can describe how it ends, and you hold property or an unencumbered vehicle to offer as security. It does not suit you if the underlying problem is permanent, such as a business that loses money every month: borrowing then only delays the issue. Honest advice includes saying so.
Choosing between one, two and three months
One month suits a gap with a known end date, such as a customer invoice due in four weeks. Two months suits a seasonal dip. Three months suits larger recoveries, such as rebuilding after a slow quarter. If you are unsure, choose the length that leaves you a margin, because extending is possible but is better planned than improvised.
A useful test is to ask what has to happen for the loan to be repaid, and by when. If the answer is “a customer pays”, find out whether the customer has confirmed the date. If it is “takings recover”, look at last year’s same months. The more specific your answer, the safer the loan.
Plan the weekly repayment
Because repayments are weekly after the prepaid interest period, put the amount into your forecast as a weekly line, and make sure the account holds it on debit day. A calendar reminder for the first debit is a simple habit that avoids a dishonour.
Getting started
Use the application form: choose “up to $50,000”, answer a few questions and a person will call you. Approval is subject to assessment, and nothing written here promises a loan.
Frequently asked questions
How short is a short term loan?
For Company Cash, typically one to three months, with the option to extend. Some other lenders define short term as up to twelve months or more.
What happens at the end of the term?
You repay from cash flow, refinance the property or another asset, or ask to extend. Plan the exit before you borrow.
Can I extend the loan?
Yes, you can ask to extend for a longer period. Ask about any fees and the new repayment arrangements first.
Is a short term loan cheaper?
A shorter term can mean less interest overall, but fees are often fixed, so compare the full cost rather than the headline.
Who is a short term loan for?
Companies with a temporary gap, such as a late customer payment, a tax bill or a seasonal dip, that expect to clear it quickly.