Before applying, clarify your use of funds and repayment ability. The best option balances speed, cost, and flexibility. Below is a high-level overview.
1) Bank Term Loans and Lines of Credit
Traditional bank financing can offer competitive rates and structured terms if your business has strong financials.
- Use cases: equipment, buildouts, working capital, refinancing higher-cost debt
- Pros: lower rates, longer terms
- Watch-outs: more documentation, longer review timelines
Learn how term loans typically work: Term Loan and term loan for small business guide. For flexible credit, see a Business Line of Credit and our in-depth business line of credit guide.
2) SBA 7(a) Loan
The SBA 7(a) loan is the SBA’s flagship program, commonly used for working capital, equipment, real estate, and business acquisitions. While the SBA does not lend directly, it partially guarantees loans made by approved lenders, potentially improving access for eligible borrowers.
- Typical maximum: up to $5 million
- Common terms: up to 10 years for working capital and equipment; up to 25 years for real estate
- Rate structure: often variable, tied to Prime with allowable spreads (confirm current limits on SBA.gov)
Explore the official program details: SBA 7(a) Loans. For an overview of SBA loans generally, see our comprehensive SBA loan guide.
3) SBA 504 Loan
Best suited for fixed assets like owner-occupied real estate and major equipment. The 504 structure typically involves a bank first mortgage and a Certified Development Company (CDC) second mortgage.
- Advantages: long terms, competitive rates for fixed assets
- Considerations: project-based underwriting, occupancy requirements, more paperwork
Program details: SBA 504 Loans.
4) SBA Express Loan
SBA Express can be faster than standard 7(a) for smaller requests.
- Typical maximum: up to $500,000
- Use cases: working capital, equipment, business expansion
Learn more in our SBA Express loan guide.
5) Microloans
Smaller loans for startups and young businesses, often delivered through community-based lenders. Microloans can be more flexible with coaching and technical assistance.
- Typical amounts: up to $50,000 (SBA Microloan program)
- Good for: early-stage working capital, inventory, small equipment
Learn more: SBA Microloan Program.
6) Short-Term Business Loan
Short-term loans can fund time-sensitive needs quickly, with daily or weekly repayment in some cases. Cost may be higher than long-term options.
- Use cases: inventory buys, bridging seasonal gaps, emergency repairs
- Pros: speedy access, lighter documentation
- Watch-outs: higher APRs, frequent payments
Get familiar with features: Short-Term Online Loan and compare alternatives like a merchant cash advance.
7) Equipment Financing and Leasing
Equipment financing can secure machinery, vehicles, and technology with the asset as collateral.
- Pros: preserves cash, matches payments to asset life
- Considerations: costs vary by equipment type, age, and credit profile
Explore structures and rates: Equipment Financing and our practical equipment financing guide.
8) Invoice Factoring and Receivables Financing
Accelerate cash flow by selling invoices or borrowing against accounts receivable.
- Best for: B2B firms with slow-paying customers
- Key point: cost is often expressed as a discount rate or fee, not a traditional APR
Learn more: invoice factoring guide.
9) Revenue-Based Financing (RBF)
With RBF, payments flex with monthly revenue until a predetermined cap is repaid.
- Pros: aligns payments with performance
- Considerations: effective cost varies with revenue volatility
Overview: Revenue-Based Financing.
10) Business Grants for Small Businesses
Grants are non-dilutive, but competitive and often targeted to specific industries, projects, or locations. Always validate eligibility and deadlines.
- National directory: Grants.gov
- State and local opportunities: see DCED and municipal commerce departments (details below)
