Understanding how different financing structures work helps you compare rates, terms, and flexibility. Below are common options U.S. businesses explore in Nevada.
SBA 7a Loan
The SBA 7a loan is a flexible government-backed option used for working capital, refinancing eligible debt, equipment, and business acquisitions. Because of the SBA guarantee, banks and certain nonbank lenders may consider a wider range of borrowers than for conventional financing.
- Typical amounts: Up to $5 million.
- Terms: Up to 10 years for working capital; up to 25 years for real estate.
- Rates: Often variable, commonly tied to Prime plus a spread within SBA caps.
- Collateral: Usually required for larger amounts; personal guarantees are common.
Learn more: Complete SBA loan guide and SBA Express loan.
SBA 504 Loan
For owner-occupied commercial real estate and heavy equipment, the SBA 504 loan pairs a bank loan with a Certified Development Company (CDC) second mortgage. It’s often explored for facility purchases or major upgrades because of long terms and potentially competitive fixed rates on the CDC portion.
- Use cases: Building purchase, construction, renovation, large equipment.
- Structure: Bank first lien + CDC second lien + borrower down payment.
- Term: CDC debenture commonly 10, 20, or 25 years.
Conventional Term Loans
Term loans provide a lump sum repaid over a fixed period, used for expansion, refinancing eligible debt, or large purchases. Terms and rates depend on credit profile, cash flow, and collateral.
- Best for: Long-term projects, buildouts, one-time purchases.
- Consider: Origination fees, prepayment policies, and covenants.
Explore a Term Loan or read: Term loan for small business guide.
Short-Term Business Loan
A short term business loan typically runs 3–18 months (sometimes up to 24 months) and can be used for quick inventory purchases, marketing pushes, or bridging seasonal gaps. Costs are generally higher than longer-term loans, but speed and accessibility may be stronger.
- Pros: Faster funding timelines, flexible use of proceeds.
- Cons: Higher effective cost; frequent payments may impact cash flow.
Compare options: Short-Term Online Loan.
Business Line of Credit
A revolving business line of credit (LOC) offers reusable working capital. Draw only what you need, pay interest on the amount drawn, and redraw as you repay.
- Use cases: Payroll gaps, receivables timing, small equipment, recurring needs.
- Watch for: Draw fees, annual fees, and rate adjustments.
Learn more: Business Line of Credit and LOC guide.
Equipment Financing
Equipment loans and leases are secured by the asset, which can make approval criteria different from unsecured working capital. Terms usually mirror the useful life of the equipment.
- Great for: Vehicles, manufacturing machinery, POS systems, and heavy tools.
- Potential tax considerations: Section 179 expensing (consult a tax pro).
See: Equipment Financing and Equipment financing guide.
Invoice Factoring and Receivables Financing
Businesses that invoice other businesses (B2B) sometimes use invoice factoring to convert unpaid invoices into immediate working capital. The factor may advance a percentage of the invoice value and collect the invoice later.
- Strength: Tied to your customers’ creditworthiness as well as your own.
- Fit: Manufacturing, staffing, logistics, and services with net-30/60 terms.
Learn how it works: Invoice factoring guide.
Merchant Cash Advance (MCA)
MCAs provide an advance repaid via a percentage of daily card sales or fixed debits. Costs are typically expressed as a factor rate, not APR.
- Considerations: High cost; designed for short-term use and sales volatility.
- Use carefully: Understand total payback and daily remittances.
Read before you consider: Merchant cash advance guide.
Revenue-Based Financing (RBF)
With RBF, repayments are a percentage of monthly revenue until a fixed cap is repaid. It can be useful for recurring-revenue companies seeking flexible payments tied to performance.
Explore: Revenue-Based Financing.
