SBA 7(a) Loan
The SBA 7(a) loan is widely used for working capital, business acquisition, partner buyouts, equipment, and real estate. SBA 7(a) loans are issued by lenders, partially guaranteed by the SBA. Learn more in this comprehensive guide: SBA loan.
- Typical uses: Working capital, acquisitions, refinancing eligible debt, equipment, leasehold improvements.
- Benefits: Longer terms than many conventional loans; often more flexible collateral requirements.
- Considerations: Documentation-intensive; underwriting timeline can be longer than online alternatives.
Explore the SBA’s official overview here: SBA 7(a) Loans.
SBA Express Loan
For smaller requests and quicker responses, the SBA Express program may be helpful. Get an overview: SBA Express loan.
- Typical uses: Working capital, short-term needs, smaller equipment purchases.
- Considerations: Lower maximum loan amounts compared to standard 7(a).
SBA 504 Loan
SBA 504 is designed for fixed assets like owner-occupied real estate or heavy equipment. It blends bank financing with a Certified Development Company (CDC) loan, often producing long terms and potentially stable rates for the CDC portion.
- Typical uses: Buying a building, expanding your facility, large equipment.
- Considerations: Owner-occupancy requirements and structured closing.
Learn more from the SBA: SBA 504 Loans.
Conventional Term Loan
A traditional term loan provides a lump sum repaid over a fixed schedule. See how term loans work and where they fit: Term Loan and this guide on a term loan for small business.
- Typical uses: Expansion, equipment purchases, renovations.
- Benefits: Predictable payments; potentially competitive rates with strong credit and collateral.
- Considerations: May require collateral and covenants; documentation varies by institution.
Business Line of Credit
A revolving business line of credit can help manage cash flow gaps and seasonality. Learn how it works here: Business Line of Credit and this practical guide to a business line of credit.
- Typical uses: Inventory, receivables timing, short-term payroll needs.
- Benefits: Pay interest only on drawn amounts; flexible access.
- Considerations: Annual reviews, potential utilization requirements, rate variability.
Short-Term Business Loan
For urgent needs over 3–18 months, short-term funding can be useful. Compare general features here: Short-Term Online Loan.
- Typical uses: Time-sensitive inventory, quick opportunities, minor equipment, or temporary cash gaps.
- Benefits: Fast decisions and access to funds compared with traditional loans.
- Risks: Higher total cost; ensure cash flows comfortably support repayment.
Equipment Financing and Leasing
Equipment financing often uses the asset as collateral, which can streamline access. Explore the details: Equipment Financing and this deep-dive on equipment financing.
- Typical uses: Manufacturing machines, vehicles, restaurant equipment, IT hardware.
- Benefits: Conserves cash; may align payments with useful life of assets.
- Considerations: Compare loan vs. lease; review end-of-term options and fees.
Invoice Factoring
If your customers pay on net-30 to net-60 terms, factoring can accelerate collections by converting receivables to immediate cash. See how it works: invoice factoring.
- Typical uses: Growth phases where receivables expand faster than cash.
- Benefits: Non-debt working capital; relies on customer creditworthiness.
- Considerations: Factor fees; customer notification vs. non-notification structures.
Revenue-Based Financing (RBF)
With RBF, repayments are tied to a percentage of monthly revenue, which flexes with sales. Learn the structure here: Revenue-Based Financing.
- Typical uses: SaaS, DTC eCommerce, and recurring-revenue businesses.
- Benefits: No fixed amortization; aligns payments with revenue.
- Considerations: Compare implied APR and revenue share cap.
Merchant Cash Advance (MCA)
MCAs are not loans but advances repaid from a share of daily card sales. They can be expensive and are best reserved for short-term, high-return scenarios. If exploring, first read this balanced guide: merchant cash advance.
Startup Loan and Early-Stage Options
Newer businesses with limited operating history can review these approaches: Startup Loan, microloans, equipment leasing, or RBF for revenue-generating startups.
