Short term business loans for bad credit

• Cash flow challenge: Businesses with bad credit needing funding to cover urgent expenses, but limited borrowing options and high rejection rates can make accessing short-term capital difficult.

• Perfect for: UK businesses with stable revenue that need funding over 3 to 18 months to manage short-term cash flow gaps, seasonal demand or urgent operational costs.

If your business needs fast access to capital but has a poor credit history, short term business loans for bad credit may still be available.

Unlike long-term finance structured over several years, short-term funding focuses on speed, flexibility and bridging immediate working capital needs.

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What is a short term business loan?

A short term business loan typically means:

• Repayment terms of 3 to 18 months

• Faster application and decision process

• Smaller to mid-sized loan amounts

• Higher monthly repayments than long-term loans

These facilities are designed to solve immediate cash flow pressure rather than fund long-term expansion.

Can you get a short term business loan with bad credit?

Yes, however approval depends less on your historic credit score and more on:

• Monthly turnover

• Recent bank statements

• Cash flow consistency
• Time trading
• Existing commitments

Some lenders prioritise revenue performance over historic credit issues. However, interest rates are typically higher to reflect increased risk.

Why businesses choose short-term funding

Short-term finance is often used to:

• Cover VAT or tax bills
• Manage seasonal stock purchases
• Handle temporary revenue dips
• Fund urgent repairs or equipment replacement
• Bridge delayed customer payments
  

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Short term loan repayment example

Example: £25,000 funding requirement

6-month short-term loan

Monthly repayment: approximately £4,800

Total repayable: approximately £28,800

Cash flow impact: high but short duration

12-month short-term loan

Monthly repayment: approximately £2,600

Total repayable: approximately £31,200

Cash flow impact: lower monthly pressure, higher total cost

Shorter terms reduce total interest but increase monthly strain. Choosing the right structure depends on affordability.

Types of short-term funding available with bad credit

Unsecured business loans

Unsecured business loans require no assets. Approval is typically based on turnover and affordability. Rates are higher for adverse credit.

Merchant cash advance

Merchant cash advances are seen as a revenue-based facility where repayments are linked to card sales.

• Flexible repayments

• No fixed monthly amount
• Useful for retail and hospitality
• Not technically a loan, but often used as short-term working capital

Invoice finance

For B2B businesses, invoice finance can release cash from unpaid invoices. Approval focuses more on customer credit quality than your own credit history.

What lenders assess beyond your credit score

When reviewing short-term applications, lenders commonly assess:

• Last 3 to 6 months of bank statements
• Average monthly turnover
• Industry risk
• Existing borrowing
• Debt-to-revenue ratio

Strong, consistent revenue can improve approval chances even with imperfect credit.

Interest rates and pricing expectations

Short-term funding can usually carry:

• Higher interest rates than prime loans
• Arrangement or broker fees
• Personal guarantees in some cases
  

Because the term is shorter, monthly repayments are higher than long-term loans. Short-term finance should be used carefully to avoid repeated refinancing cycles.

How to improve your approval chances

To strengthen your application:

• Maintain consistent bank activity
• Avoid multiple recent credit applications
• Reduce outstanding short-term debt where possible
• Prepare up-to-date financial records
• Be transparent about historic credit issues

How Novuna Business Cash Flow can help

At Novuna, We work with specialist UK lenders who can find you a solution to your bad credit and provide funding to suit your needs.

Get in touch with our experts today and we will find a great fit for your situation.