Whether you’re just starting a new business or you’ve been working for yourself for a while, you’re occasionally going to need an influx of cash to keep your business running smoothly. There will be slow periods in many industries, or times when you’re waiting for invoices to be paid so you can pay your own bills. During these times, you may want to consider a short-term business loan.

With a short-term business loan, you can get the cash you need now and you don’t have to be in debt for years. Repayment terms are typically short, and qualification requirements can be much less strict than they are for traditional long-term business loans.

What Makes a Short-Term Business Loan Different from a Long-Term Loan?

One of the key differences between a short-term business loan and a long-term one is, well, the length of the term. You could spend years paying back a long-term loan by making payments every month. But the term length of a short-term loan isn’t going to be any longer than three years max. Most terms are three to 24 months. Instead of paying monthly, you’ll pay weekly or even daily until you’ve repaid the loan.

How Do Short-Term Business Loans Work?

Short-term business loans are a lot like most other loan products. You get a lump sum of money from a lender and repay it in installments at agreed-upon intervals. You can get secured short-term business loans for which you put up some kind of collateral, or you can get unsecured business loans. Unsecured loans typically accrue interest at a higher rate and may come with other fees to offset the lender’s increased risk.

If you default on a short-term business loan, the lender can charge late fees, call the rest of the loan balance due in full, and seize any collateral you may have used to secure the loan. Even if you didn’t put up any collateral, your credit score will still take a hit and you could find yourself struggling to get financing in the future if you need it.

Where Do You Get a Short-Term Business Loan?

You can get a short-term small business loan from a traditional bank or credit union, although not all traditional lenders offer short-term loans. It’s much more common to get them from an online lender. Online lenders typically have lower standards for who qualifies for a loan than traditional lenders, so you may still be able to get a short-term business loan even if you have bad credit or haven’t been in business long enough to qualify for a traditional loan.

You can apply for short-term business loans online and you’ll usually get an answer within 24 hours. Some online lenders can give you an answer within minutes. After you’re approved, you’ll get the funds fairly quickly. It usually takes only two or three days for online lenders to transfer loan disbursements.

When Is a Short-Term Loan a Good Idea?

There are lots of times when you might need the cash injection that a short-term loan can provide. Let’s say an exciting opportunity comes your way. A big new client is interested in your services, but you need to hire more staff or buy more inventory in order to service them. A short-term loan could provide the funds.

Perhaps you’re in a cash flow slump – it’s the slow time of year and you need some dough to keep the doors open until business picks up again next season. That happens to a lot of businesses, and short-term business loans are a common solution among many of them. With short repayment terms, you can usually be done paying off your short-term business loan by the time the busy period comes back around again.

Short-term business loans can also be an effective way to deal with emergency expenses. When you need to replace an expensive piece of equipment, for example, you can take out a short-term loan to cover the cost. You can even use a short-term business loan to fund buying new equipment and expanding your business.

Running a business takes cash – sometimes a lot of it. And you can’t always just have the cash you need lying around. You’re going to have to take out loans sometimes. Short-term business loans are a good solution for solving cash flow problems or funding expenses. With the right source of funding, you can keep your business afloat – or take it to the next level.