Quick answer
A short-term business loan is funding repaid over weeks or months rather than years, used to cover a specific gap or opportunity. In New Zealand they're offered unsecured (typically $5,000 to $500,000) or against property ($20,000 to $5,000,000). Short-term loans can be funded fast — often within 24 hours — but they work best when you know exactly how and when the money will be repaid.
Key points
- Terms measured in weeks or months, not years.
- Available unsecured or against residential or commercial property.
- Quick to arrange; the exit plan decides whether it's a good idea.
- Compare the total dollar cost, not just the speed.
- Unsecured
- Typically $5,000 to $500,000
- Property-secured
- $20,000 to $5,000,000
- Typical use
- A gap with a known end
- Speed
- Within 24 hours often realistic
Short-term business loans are built for speed and for a finish line. You borrow to get from here to a point you can see — a contract payment, a sale, the busy season — and you repay when you arrive. Used that way, they’re one of the most useful tools in business finance. Used without a finish line, they become expensive quickly.
What is a short-term business loan?
It’s any business loan with a short repayment period. In New Zealand the main types are:
- Unsecured short-term loans, sized on turnover, typically $5,000 to $500,000.
- Caveat loans, very short property-backed loans where the lender lodges a caveat on the title.
- Bridging finance, which covers the gap between a purchase and a sale or refinance.
- Short second mortgages, sitting behind an existing bank mortgage.
Property-secured short-term loans run from $20,000 to $5,000,000 against residential or commercial property.
How fast can a short-term loan be funded?
Speed is the main reason people choose them. With documents ready, our aim is funding within 24 hours of your first application. Unsecured amounts can be the quickest because there’s nothing to register. On the property side, $20k to $250k is possible the same day when the title is clean and a lawyer is available, and up to $5m is possible within 24–48 hours.
A quick reference:
| Type | Main steps | Typical pace |
|---|---|---|
| Unsecured short-term | Statements, ID, offer | Same day possible for smaller amounts |
| Caveat loan | Title search, value check, lawyer, caveat lodged | Often among the fastest property options |
| Second mortgage | As above, plus possible first-lender consent | Allow longer if consent is needed |
| Bridging | Purchase and sale documents, valuation | Depends on settlement dates |
If your deadline is already set, start an application now so the clock is running.
Why does the exit plan matter so much?
Because the term is short, repayment arrives fast. A lender will want to know where the money will come from, and so should you. Strong exits are specific and likely:
- A signed contract with a payment date.
- A property sale with an agreement in place.
- A confirmed refinance to a bank once accounts are filed.
- A seasonal peak you’ve seen in previous years’ statements.
Weak exits are hopes: “sales should improve”, “a big client might come through”. If the exit is uncertain, a longer term or a different product is usually safer.
Our guide to planning an exit from short-term finance goes into this step by step.
How do I work out what a short-term loan really costs?
Annualised percentages make short loans look dramatic; dollars tell the real story. Ask for:
- Establishment and legal fees, in dollars.
- The interest or charges for the expected term, in dollars.
- Any minimum interest period — some lenders charge for a minimum number of months even if you repay early.
- Default and extension costs — what happens if the exit is late.
Then compare that total with the cost of not borrowing: a missed supplier discount, an IRD penalty, a lost contract. An illustrative example: a Tauranga engineering firm needs $60,000 for eight weeks to buy steel for a contract that pays on completion. If the loan’s total cost is less than the margin on the job, and the payment date is firm, the short-term loan pays for itself. (Illustrative only.)
When is a short-term loan the wrong choice?
- When there’s no clear repayment source.
- When the need is permanent — ongoing losses or a structural cash shortfall.
- When you’d be using it to repay another short-term loan.
- When you’re buying an asset you’ll use for years, which suits equipment funding or a longer loan better.
What do lenders ask before approving a short-term loan?
Expect four main questions, and have the answers ready:
- What is the money for? A specific purpose, with a quote, invoice or contract if possible.
- How much exactly? Including fees, GST where relevant and a small buffer.
- How and when will it be repaid? The exit, with evidence.
- What security or guarantee is offered? Property, a director guarantee, or both.
Applications that answer all four on the form tend to be approved fastest, because the lender can go straight from reading to deciding.
Short-term loans and tax timing
A common use for short-term finance in New Zealand is covering a tax payment due before the income that would pay it. GST, for example, is generally due on the 28th of the month after the period ends, with the March period due on 7 May and the November period on 15 January. If a large receivable lands a few weeks after a due date, a short loan that pays IRD on time and is repaid from the receivable can cost less than late payment penalties. See GST bill due for the details.
Get from here to your finish line
If you can see the date your money arrives and just need to bridge the weeks before it, a short-term loan is often the quickest answer. See if you qualify in about 60 seconds. We won’t run a credit check for an enquiry, we won’t scatter your details among lenders, and you’ll talk to an actual person about the term and exit. Please be precise on the form — the amount, the purpose and when repayment will come — so we can line up the right lender and keep within the 24-hour aim.
Frequently asked questions
How short is a short-term business loan?
It varies by lender and purpose. Unsecured short-term loans often run months; property-secured short-term facilities such as caveat or bridging loans can be weeks to a year or so. The term should match the date your repayment source arrives.
What counts as a good exit?
A specific, likely source of repayment: a property sale settling, a contract payment, a seasonal peak, a tax refund or a planned refinance to a bank. 'Things will pick up' isn't an exit.
Are short-term loans more expensive?
Usually, measured over a year. But you only pay for the time you use. A short facility that solves a problem and is repaid quickly can cost less in dollars than a long loan you didn't need.
Can I extend a short-term loan?
Sometimes, at the lender's discretion and usually at a cost. Plan as if no extension will be available.