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Best Options for Short-Term and Long-Term Small Business Loans

February 9th, 2024 | 6 min. read

By Bryan Cremeen

When you own a small business, you don’t always have enough cash to make the moves you want to make – and that’s okay! 

There are plenty of lending options available to you. How do you know which one to choose?

At CSI Accounting & Payroll, we’ve worked with small business finances for over 50 years. When our clients need to borrow money, they ask us:

  • What are the long-term loan options for small businesses?
  • What are the short-term loan options for small businesses?
  • What is the best loan option?
  • Can CSI help me get loans?

Blog - Best Options for Short-Term and Long-Term Small Business Loans

Long-Term Loan Options

When we think of long-term loans, we generally think of a term that’s five years or longer. Long-term loans are the most common types of loans, and they’re often used for buying an asset like a vehicle or a building. 

Here are the long-term loan options:

  • Bank loans. These usually have terms of three to 10 years, and they have the highest interest rate of the long-term loan options.
  • SBA loans. These come from banks but are backed by the SBA. Their fixed interest rates are generally lower than those of bank loans, and the terms are usually 10 years.
  • Loaning your money to your business. Ultimately, when you do this, you’re betting on yourself that you’ll get paid back. It has the best interest rate, and it gets even better if you choose a longer loan term.

Short-Term Loan Options

Short-term loans generally have a term that’s under five years. Short-term loans are less common, and they’re often used for situations that need cash fast. They almost always have higher interest rates than long-term options do.

Here are the short-term loan options:

  • Bank line of credit. This loan term is generally between six months and three years. We mostly see this used if a business thinks their payroll will be short. It has the lowest interest rate of the short-term loan options.
  • Business credit card. Of the short-term options, this is the most liquid and easiest to use. It has higher interest than a line of credit, but it has more flexible repayment options. You should never take longer than a year to repay this.
  • Alternative financing arrangements. We can’t put it lightly; these options make us cringe. We would almost rather see you borrow from family or friends, but if you’re in a desperate situation, you can look at the following options:
  • Merchant financing arrangements. If your business accepts credit card payments, you can ask your merchant for a “no doc” loan. They’ll essentially garnish your profits, and your cash flow will be gone. They also have extremely high interest rates (upwards of 60-75 percent).
  • Micro loans, also called daily loans. These “no doc” loans come from financing institutions that want the money back within one to three years. They also have extremely high interest rates, tied for the highest with merchant financing arrangements.

The Best Loan Options

Of all of the long-term and short-term options listed above, which are our favorites?

More than anything, we think the length of a loan matters. If interest rates are high, the length should be short. You want to pay it off quickly to avoid as much interest as possible!

We think all of the long-term loan options are great because they’re used to help you acquire assets! All of them require documentation, which ensures you can afford the loan. 

We recommend SBA loans for purchasing a business or making major expansions. Bank loans are easiest for asset purchases, and you can secure the loan against the asset you’re buying.

Short-term loans are less ideal. People tend to agree to poor loan terms just because they’re in a bad situation. 

However, the best short-term option is the bank line of credit because you can use it, pay it back, and use it again. It also has the lowest interest rate of the short-term loan options. 

Only use a business credit card if you can pay off the balance each month, and never use the two alternative options we mentioned. You should never use debt to operate your business. If your cash flow is negative and you need cash, borrowing only puts you deeper into debt.

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How CSI Helps You Get Loans

CSI Accounting & Payroll has banker partners available for our clients whenever they need loans. Here is how CSI helps secure the loans.

With an accounting expert by your side, you’ll feel confident in your financials and your ability to get a loan. You’ll also know that you’ll be able to pay off the loans you’re approved for.

Plus, don’t worry about taking on short-term loans! CSI can help improve your cash flow, making you much less likely to find yourself in a tight squeeze. Overall, we make short-term and long-term functions of your business easier.

Take Control of Your Cash Flow

Now that you know about short-term and long-term loan options, which ones we like best, and how CSI can help you get a loan, are you ready to check out monthly accounting services?

If so, please consider CSI Accounting & Payroll! To see if we can be a good fit for your business, click the button below for a free consultation:


Not ready to talk? That’s okay! First, learn more about what it’s like to work with CSI by clicking the image below:

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Bryan Cremeen

Bryan joined CSI Accounting in 2019. He joined the team after CSI purchased his accounting firm, AccountSource LLC, which he had owned since 2005. He graduated from St. Cloud State in 2001 with a Bachelor's Degree in Accounting and has been an Enrolled Agent since 2010. Before owning his own accounting practice, Bryan had worked at the State of MN handling financial reporting and had been in private industry as a Controller. His primary responsibilities include overseeing the accounting department and making sure clients are receiving quality service. Fun Fact: Bryan has played soccer since the age of 4. He still plays soccer year round through various adult leagues and is an avid supporter of the Minnesota United MLS soccer team. COYL!!! (Come on, you Loons!!!)