1. Term Loans
A term loan is what most people think of when they think of small business financing. These loans have a set repayment time, a set number of payments, and a fixed or variable interest rate.
You can get short-, medium-, or long-term loans. The differences lie in their repayment term lengths: less than a year, between one and three years, and three years or longer, respectively.
2. Business Lines of Credit
A business line of credit is typically “revolving,” which means you can draw funds when you need them, pay them back with interest, and then your loan amount resets back to its original value.
You can use your business line of credit to increase your working capital, purchase inventory, cover cash flow gaps, and deal with plenty of other financing needs you might have. It’s a great safety cushion to keep in your back pocket for emergencies or unexpected opportunities.
3. Equipment Loans
Equipment loans let you finance up to 100% of the value of the computers, machinery, vehicles, or other equipment you need to run your business. With equipment loans, the equipment will act as collateral, which means your lender will care more about its value and less about your company’s financials or your credit history.
4. Invoice Financing
Also called accounts receivable financing, invoice financing is an alternative lending option that gives you an advance on the money you’re already owed, so you don’t have to wait for your clients to pay you before you can cover your own bills.
Dealing with cash flow gaps because of late-paying customers can be a serious issue. A quick fix is accounts receivable financing that can give you more stability—for the price of the fees you’ll pay to the lender.
5. Merchant Cash Advances
Your fifth and final alternative lending option, the merchant cash advance, gives you an advance that’s paid back with a percentage of your daily credit card transactions, plus a lender fee. Merchant cash advances are best suited for companies that do a large amount of their business through credit card transactions.
On the one hand, this is a useful way to pay back an advance: If you have a slow day, you’ll pay less. But on the other, merchant cash advances are incredibly expensive—and we generally advise that you explore other options before settling on one.
The Bottom Line
Small business lending marketplaces make it possible to get several business loan offers with just one application. We’re focused on simplifying the business loan process by presenting you with the best-fitting options from the most trusted lenders in the industry.
We take the values of honesty and transparency seriously—that’s why there are no hidden fees, and you’re in complete control of who can see your information.