Side by side

Every option, in plain English.

No jargon and no sales pitch. Here's how the most common kinds of business funding actually work, what they cost, and who they fit. Costs shown are typical ranges to help you learn, not a quote.

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The big questions.

Most owners end up choosing between two things. Here are the matchups we get asked about most.

SBA loan or bank loan?

Both are bank loans. The SBA version lets the bank say yes more often, with longer terms. A conventional bank loan can close faster with less paperwork if you're very strong.

SBA 7(a) loan

A bank loan the government partly backs, so banks can say yes with longer terms and capped rates.

Amounts: Up to $5 million
Typical cost: Rate caps of prime + 3% to prime + 6.5% by loan size (about 10% to 13.5% with prime at 7.00%)
Term: Up to 10 years (25 for real estate)
Speed: 30 to 90 days
Usually needs: ~2 years in business, credit often 650+, tax returns

The good

Among the lowest costs available to small businesses
Long terms: up to 10 years for working capital, 25 for real estate
Can be used for almost anything: cash flow, equipment, buying a business, refinancing

Watch for

Slowest option: often 30 to 90 days
The most paperwork: tax returns, financial statements, a plan
Usually needs about 2 years in business and solid credit

Best for: Established businesses that can wait a few weeks for the best long-term cost.

Bank term loan

A classic loan from a bank: a lump sum paid back monthly.

Amounts: $25,000 to several million
Typical cost: Typically among the lowest rates
Term: 1 to 10 years
Speed: 2 to 8 weeks
Usually needs: Credit often 680+, 2+ years, collateral

The good

Low cost when you qualify
Predictable monthly payment
Builds a banking relationship

Watch for

Hard to qualify: strong credit, 2+ years, collateral
Slow, often weeks
Usually needs a personal guarantee

Best for: Established, profitable businesses with good credit and something to pledge.

SBA loan or a fast online loan?

The classic trade: lowest cost and slow, or higher cost and fast. If you can wait, SBA usually wins. If waiting costs you a deal, fast can be worth it.

SBA 7(a) loan

A bank loan the government partly backs, so banks can say yes with longer terms and capped rates.

Amounts: Up to $5 million
Typical cost: Rate caps of prime + 3% to prime + 6.5% by loan size (about 10% to 13.5% with prime at 7.00%)
Term: Up to 10 years (25 for real estate)
Speed: 30 to 90 days
Usually needs: ~2 years in business, credit often 650+, tax returns

The good

Among the lowest costs available to small businesses
Long terms: up to 10 years for working capital, 25 for real estate
Can be used for almost anything: cash flow, equipment, buying a business, refinancing

Watch for

Slowest option: often 30 to 90 days
The most paperwork: tax returns, financial statements, a plan
Usually needs about 2 years in business and solid credit

Best for: Established businesses that can wait a few weeks for the best long-term cost.

Online term loan

A lump sum like a bank loan, but faster and easier to get, and it costs more.

Amounts: $10,000 to $500,000
Typical cost: Higher than bank loans; ask for the APR
Term: 6 months to 5 years
Speed: 1 to 7 days
Usually needs: Often 6 to 12+ months in business, steady deposits

The good

Decisions in days
Easier approval than a bank
Clear payoff date

Watch for

Higher cost than bank or SBA
Shorter terms mean bigger payments
Some pay weekly instead of monthly

Best for: Businesses with steady deposits that need money in days, not months.

Line of credit or term loan?

A term loan is one lump sum for one big thing. A line of credit is a safety net you dip into as needed.

Business line of credit

Like a credit card for your business: a limit you can draw from and pay back, over and over.

Amounts: $10,000 to $500,000+
Typical cost: Interest only on what you draw; varies widely
Term: Revolving; draws repaid in 6 to 24 months
Speed: Days to weeks
Usually needs: Often 1+ year, steady revenue, fair credit or better

The good

Pay interest only on what you use
Money ready when you need it
Perfect for uneven cash flow and seasons

Watch for

Rates can change
Some charge draw or yearly fees
Easy to lean on too much

Best for: Businesses with ups and downs: seasonal sales, slow-paying customers, surprise repairs.

Online term loan

A lump sum like a bank loan, but faster and easier to get, and it costs more.

Amounts: $10,000 to $500,000
Typical cost: Higher than bank loans; ask for the APR
Term: 6 months to 5 years
Speed: 1 to 7 days
Usually needs: Often 6 to 12+ months in business, steady deposits

The good

Decisions in days
Easier approval than a bank
Clear payoff date

Watch for

Higher cost than bank or SBA
Shorter terms mean bigger payments
Some pay weekly instead of monthly

Best for: Businesses with steady deposits that need money in days, not months.

Buy the equipment or lease it?

Buy what lasts and you'll keep. Lease what goes out of date or when you need lower payments.

Equipment financing

A loan to buy equipment or vehicles, where the equipment itself backs the loan.

Amounts: $5,000 to $5 million
Typical cost: Moderate; depends on credit and equipment
Term: 2 to 7 years (up to the equipment's life)
Speed: 1 to 10 days
Usually needs: Quote or invoice for the equipment

The good

Easier to qualify: the equipment backs it
Can cover up to 100% of the cost
You own it; possible tax benefits (ask your CPA)

Watch for

Only for equipment
You're responsible if it breaks or goes out of date
A down payment may be needed with weaker credit

Best for: Buying trucks, machines, ovens, tools, or tech that will earn its keep.

Equipment leasing

Renting equipment for a set time, with an option to buy or upgrade at the end.

Amounts: $5,000 and up
Typical cost: Lower payment, higher total if you buy at the end
Term: 1 to 5 years
Speed: Days
Usually needs: Equipment quote

The good

Lower payments than buying
Easy to upgrade tech that ages fast
Little or nothing down

Watch for

Often costs more in total if you keep it
You don't build ownership
Contract terms matter; read the end-of-lease options

Best for: Equipment that goes out of date fast, or when cash is tight.

Invoice financing or a cash advance?

If your customers are businesses that pay slowly, invoice financing is usually much cheaper than a cash advance.

Invoice financing and factoring

Get cash now for invoices your business customers haven't paid yet.

Amounts: Up to about 90% of your invoices
Typical cost: A fee per invoice, often 1% to 5% a month
Term: Until the invoice is paid
Speed: 1 to 5 days
Usually needs: Unpaid invoices from business or government customers

The good

Based mostly on your customers' credit, not yours
Grows as your sales grow
Fast: often days

Watch for

Only works if you invoice other businesses
Fees add up if customers pay late
With factoring, your customers may pay the factor directly

Best for: Businesses that bill other businesses and wait 30 to 90 days to get paid.

Revenue-based financing / cash advance

Fast money paid back from a slice of your daily or weekly sales. The easiest to get, and the most expensive.

Amounts: $5,000 to $500,000
Typical cost: Factor rates around 1.1 to 1.5; very high yearly cost
Term: 3 to 18 months
Speed: 1 to 3 days
Usually needs: Steady card or bank deposits

The good

Very fast: sometimes 24 to 48 hours
Works with lower credit
Payments can move with your sales

Watch for

Most expensive option: a 1.3 factor over 6 months can mean a yearly cost over 60%
Daily or weekly payments squeeze cash flow
Stacking several advances can trap a business

Best for: Short, clear needs where the money quickly earns more than it costs. Use carefully.

SBA 504 or a regular commercial mortgage?

If you'll work in the building, a 504 can mean just 10% down and a fixed rate. For investment property, a regular commercial loan is the path.

SBA 504 loan

The SBA loan for buying or building the property you work in, or big equipment, with as little as 10% down.

Amounts: SBA portion up to $5 million ($5.5 million for some projects)
Typical cost: Below-market fixed rate on the SBA portion
Term: 10, 20, or 25 years
Speed: 60 to 90+ days
Usually needs: Owner-occupied property (51%+), 2+ years is typical

The good

Often just 10% down
Long, fixed-rate terms of 10, 20, or 25 years
Builds equity instead of paying rent

Watch for

Only for property you occupy or major fixed equipment, not everyday cash flow
Two loans means more closing steps
Takes 60 to 90 days or more

Best for: Owners ready to stop renting and buy their building, or buy big equipment.

Commercial real estate loan

A loan to buy or refinance business or investment property.

Amounts: $250,000 and up
Typical cost: Depends on property, income, and credit
Term: 5 to 25 years
Speed: 30 to 60 days
Usually needs: Property details; income covering about 1.25x the payment

The good

Long terms
Builds equity
Can refinance to pull cash out

Watch for

Bigger down payment than 504, often 20% to 30%
Appraisal and closing costs
Some loans balloon after 5 to 10 years

Best for: Buying a building, a rental property, or refinancing one you own.

The whole shelf, simply.

Twelve ways to fund a business, each in a sentence or two.

SBA 7(a) loan

You borrow a lump sum and pay it back monthly over years. Because the SBA guarantees part of it, the bank takes less risk, so you get a longer term and a capped rate.

30 to 90 days · Up to $5 million

SBA 504 loan

Two lenders split it: a bank covers about half, an SBA-backed lender covers up to 40% at a fixed rate, and you put in about 10%.

60 to 90+ days · SBA portion up to $5 million ($5.5 million for some projects)

SBA Express and microloans

Express lenders can approve on their own, so it moves faster than a regular 7(a). Microloans come through local nonprofit lenders and often include coaching.

1 to 4 weeks · Up to $500,000 (Express) or $50,000 (micro)

Bank term loan

You borrow a set amount for a set time at a set payment. Strong businesses with collateral get the best pricing.

2 to 8 weeks · $25,000 to several million

Online term loan

The lender looks mainly at your bank deposits and credit, and can decide in days.

1 to 7 days · $10,000 to $500,000

Business line of credit

You get a limit, say $50,000. Use $10,000, pay interest only on that $10,000. Pay it back and it's available again.

Days to weeks · $10,000 to $500,000+

Equipment financing

The lender pays for the equipment, you pay monthly, and you own it. Since the equipment is the collateral, it's easier to get.

1 to 10 days · $5,000 to $5 million

Equipment leasing

You make lower monthly payments to use it. At the end, return it, upgrade, or buy it.

Days · $5,000 and up

Invoice financing and factoring

You have $40,000 in unpaid invoices due in 60 days. A lender advances most of it now, then you settle up when your customer pays.

1 to 5 days · Up to about 90% of your invoices

Revenue-based financing / cash advance

You get, say, $50,000 and agree to pay back $65,000 through small daily or weekly payments. That 1.3 is called a factor rate.

1 to 3 days · $5,000 to $500,000

Commercial real estate loan

The lender looks at the property and, for rentals, whether its income covers the payment (called DSCR).

30 to 60 days · $250,000 and up

Startup options

Most lenders want some history. We help you use what works now and build toward bank and SBA loans later.

Days to weeks · Usually under $50,000 to start

Words you'll hear.

Lenders talk in shorthand. Here's what it means.

APR

The yearly cost of the money, including fees. The easiest way to compare two offers fairly.

Collateral

Something the lender can take if the loan isn't paid, like equipment, property, or invoices.

Personal guarantee

Your promise to repay if the business can't. Most small business loans ask for one.

Factor rate

How cash advances are priced. 1.3 means you pay back $1.30 for every $1. It sounds small but is often very expensive.

Prime rate

The base rate banks build from. It was 7.00% in September 2026. Many SBA and bank rates are prime plus a margin.

DSCR

Debt service coverage ratio: does the income cover the payment? 1.25 means $1.25 of income for every $1 of payment.

Time in business

How long you've been open. Two years opens the most doors; six months opens some.

Stacking

Taking several cash advances at once. It can drain cash fast; we help owners get out of it, not into it.

Ranges are educational and change with the market; your actual terms depend on your business, credit, and the lender. SBA program limits and rate caps from the U.S. Small Business Administration; prime rate from the Federal Reserve (FRED). Not an offer or commitment to lend.

See what fits my business Or call 254-722-7764