SBA 7(a) Loan
The SBA 7(a) loan is a flagship program commonly used for working capital, equipment, partner buyouts, and business acquisitions. The SBA provides a partial guarantee to lenders, which can support longer terms and competitive rates compared to many conventional options.
- Typical uses: Working capital, equipment, inventory, refinancing eligible debt, acquisitions
- Loan sizes: Up to $5 million (varies by lender and underwriting)
- Rates: Often tied to Prime; see current SBA guidance for caps and structures
- Terms: Up to 10 years (working capital); up to 25 years (real estate)
- Collateral: Required when available; personal guarantee common
Learn more: SBA 7(a) overview and a practical SBA loan guide. For faster, smaller SBA loans, see SBA Express loan options.
SBA 504 Loan
Designed primarily for owner-occupied commercial real estate and heavy equipment, the SBA 504 structure blends a bank loan, a Certified Development Company (CDC) loan, and borrower equity to achieve long terms and fixed-rate stability.
- Typical uses: Real estate purchase, new construction, major equipment
- Benefits: Long amortization, fixed CDC portion, lower down payment versus conventional CRE loans
- Best for: Established companies buying long-lived assets in Wisconsin markets
Conventional Term Loan
A bank or nonbank Term Loan offers a lump sum with fixed or variable payments. Suited for clear, long-term investments with predictable cash flow.
- Use cases: Equipment, expansion, refinancing eligible debt
- Rates/terms: Highly variable by credit profile, collateral, and lender type
Explore best practices in our guide to the term loan for small business.
Business Line of Credit
A revolving Business Line of Credit is ideal for variable needs such as payroll cushions or purchase orders. Pay interest on the amount you actually draw.
- Benefits: Flexibility, only pay for what you use
- Considerations: May involve annual reviews, utilization requirements, or covenants
See our comprehensive business line of credit guide.
Short Term Business Loan
A short term business loan can provide quick working capital with simplified documentation—often based on recent bank statements and revenue trends.
- Use cases: Rapid inventory turns, marketing campaigns with quick payback, brief cash gaps
- Timeline: In days rather than weeks (varies by provider)
- Considerations: Higher effective costs; ensure ROI exceeds financing expense
Equipment Financing and Leasing
Equipment Financing aligns the repayment term with asset life and can preserve cash for operations. Underwriting often emphasizes the equipment’s resale value and business fundamentals.
- Benefits: May require less upfront cash, can be faster than SBA
- Considerations: Equipment serves as collateral; understand end-of-term options in leases
Dive deeper into equipment financing structures and rates.
Invoice Factoring
If you invoice creditworthy buyers and face slow pay, invoice factoring can advance a percentage of your receivables. This transforms AR into immediate working capital.
- Best for: B2B companies with 30–90 day terms and reliable customers
- Cost basis: Discount fees often quoted monthly; compare all-in cost to alternatives
Merchant Cash Advance (Use with Care)
A merchant cash advance (MCA) provides a lump sum repaid via a daily/weekly holdback from card or bank deposits. It can be fast, but the cost is typically higher than many alternatives. Learn mechanics in this merchant cash advance guide.
- Best for: Card-heavy sales, short projects with clear ROI, when speed is critical
- Considerations: Factor rates, daily remittances, potential strain on cash flow
Revenue-Based Financing
Revenue-Based Financing ties repayments to a fixed percentage of monthly revenue, scaling payment size with performance. Useful for growth-stage companies without hard collateral.
- Benefits: Variable payments, non-dilutive
- Considerations: Effective cost, total repayment cap, impact on margins during slow months
Business Acquisition Loans
Buying a Wisconsin competitor or performing a partner buyout can be structured with SBA 7(a), seller financing, and a bank term loan. Explore frameworks in business acquisition loans.
- Key factors: Post-acquisition DSCR, management experience, customer concentration
- Practical tip: Secure a detailed quality of earnings (QofE) if acquisition size warrants it
Construction and Owner-Occupied Real Estate
For ground-up or tenant improvements, see Construction Loan options and SBA 504 for stabilized owner-occupied buildings. Budget for contingencies, interest reserve, and timeline slippage.
