Both give you a lump sum repaid over a fixed term, but they trade off on cost, speed, and how hard they are to get. The right pick depends on how fast you need the money.
What an SBA loan is
An SBA loan is a bank loan partly guaranteed by the U.S. Small Business Administration. That guarantee lets banks offer lower rates and longer terms than they otherwise would, which is why SBA loans are among the cheapest funding a small business can get.
The trade-off is the process. SBA loans require strong credit, solid financials, often collateral, and a lot of paperwork — and approval-to-funding can take weeks to a few months.
What a term loan is
A conventional term loan — from a bank or an online lender — is a straightforward lump sum repaid in fixed installments. Bank term loans are cheaper but stricter; online term loans cost more but move much faster and accept a wider range of credit profiles.
Terms typically run from one to five years, and because there's no government guarantee step, funding can land in days rather than weeks with the right lender.
Cost, speed, and qualification
If you can wait and you qualify, an SBA loan usually wins on pure cost — lower rates and longer repayment mean smaller payments. A term loan wins on speed and accessibility: simpler underwriting, faster cash, and approval even when your file isn't pristine.
Many owners use both over time — a faster term loan to handle an urgent need now, then refinancing into cheaper, long-term financing once the pressure is off.
How to keep both options open
You don't have to guess which path you'll qualify for. The Broker Shop submits your file to 50+ lenders at once, including SBA-preferred lenders and fast term-loan providers, so you can compare a cheaper-but-slower offer against a faster-but-pricier one and choose with real numbers in front of you.
See what you qualify for
One 2-minute application reaches 50+ competing lenders. It's free, and checking your options won't affect your credit score.
See What I Qualify For →The bottom line: Choose an SBA loan when you can wait and want the lowest cost; choose a term loan when you need speed or flexible qualification — and compare real offers for both before committing.