Run your numbers
Read the cost the right way
A short-term loan quoted as a flat total cost repays that cost over a few months, so its annualized rate is much higher than the flat percentage suggests.
Always convert the weekly payment to a monthly equivalent (weekly payment times about 4.33) and test it against your slowest month. See daily and weekly payments in monthly terms and stress-testing payments.
When short-term makes sense
When the money produces a return quickly, such as inventory that sells in weeks or a job that pays on completion.
Short-term money is expensive for slow payback uses. Read short-term business loans and working capital.
Frequently asked questions
Is early payoff cheaper?
It depends on the contract. Some short-term products discount early payoff and others charge the full cost regardless. Ask before signing.
What is a monthly equivalent?
The weekly payment multiplied by about 4.33, so you can compare it with monthly bills and other offers.