The seven funding options that actually fund

Walk into any bank and you will hear about two of these: a term loan and a line of credit. Walk into any MCA shop and you will hear about one: the merchant cash advance. Walk into a broker like us and we will look at your situation and decide which of the seven fits, because the wrong product is the most common reason owners overpay for capital.

Here is the full menu, ranked roughly from fastest to slowest to fund:

None of these is universally best. Each is the right answer for a specific combination of speed, credit profile, and use case. Below is the detailed breakdown of each, plus a decision matrix at the end if you want to skip ahead.

1

Merchant Cash Advance (MCA)

Speed and bad-credit specialist

A merchant cash advance is technically a purchase of future receivables, not a loan. The funder advances you a lump sum and is repaid through a fixed daily or weekly ACH debit tied to a percentage of your revenue. Underwriting is primarily based on bank deposits and credit-card processing volume, not personal credit. Read the full MCA explainer here.

Amount
$5K – $500K
Term
4 – 24 months
Speed
24 – 48 hours
Rate
1.20 – 1.49 factor
✓ Best forFunding within 24 hours. FICO 500–650. Restaurants, retail, trucking. Inventory crises, payroll shortfalls, equipment repairs.
✗ Worst forLong-term capital needs. Owners with 700+ FICO who qualify for cheaper products. Paying off last quarter's tax bill (you can't out-grow MCA repayment).
2

Business Term Loan

Predictable spend, predictable payment

A business term loan is a lump-sum loan repaid over a fixed term with fixed monthly (or sometimes weekly) payments. Alternative lenders fund in days; community banks fund in weeks. The product is structured almost identically to a personal loan, just underwritten on business cash flow plus personal guarantee. See our term loan page for full details.

Amount
$10K – $500K
Term
1 – 5 years
Speed
2 – 5 days
Rate
9 – 30% APR
✓ Best forPlanned spends with a known ROI: marketing campaign, build-out, hire, inventory load. FICO 600+. Owners who want a fixed monthly payment they can model.
✗ Worst forSub-600 FICO without compensating revenue strength. Ongoing or unpredictable cash needs (use a line of credit instead). Acquisitions over $500K (go SBA).
3

Business Line of Credit

Revolving working capital

A business line of credit is a revolving credit facility you draw against as needed, pay back, and draw again. You pay interest only on what you have drawn, not the full limit. Perfect for businesses with cyclical or unpredictable cash needs. Full line-of-credit details here.

Amount
$10K – $250K
Term
Revolving
Speed
2 – 5 days
Rate
10 – 30% APR
✓ Best forSeasonal businesses, contractors with project-based cash gaps, owners who want a safety net for slow weeks. FICO 600+.
✗ Worst forLarge one-time spends with no expected payback in 60–90 days. Sub-600 FICO (most LOC lenders won't underwrite). Owners who will treat the LOC as long-term debt.
4

Equipment Financing

Asset-backed, lower rates

Equipment financing uses the equipment itself as collateral, which lowers the lender's risk and your rate. Works for vehicles, trucks, ovens, freezers, dental and medical equipment, POS systems, manufacturing machinery, computer hardware. Read more about equipment financing.

Amount
$5K – $500K
Term
1 – 6 years
Speed
2 – 7 days
Rate
7 – 25% APR
✓ Best forBuying anything tangible: truck, freezer, CNC machine, dental chair, espresso machine, server rack. FICO 580+. Lower rates than unsecured products.
✗ Worst forWorking capital, payroll, marketing, anything not physical. The equipment IS the collateral; if you default, they take the equipment.
5

SBA Loans (7(a), Express, 504)

Cheapest capital, slowest process

SBA loans are made by participating banks and lenders with a partial guarantee from the Small Business Administration. That guarantee allows the lender to offer lower rates and longer terms than they otherwise would. Three flavors matter: SBA 7(a) (general business purpose, up to $5M), SBA Express (faster but capped at $500K), and SBA 504 (real estate and major equipment, very long term). See our MCA vs SBA loan comparison for when each makes sense.

Amount
$25K – $5M
Term
10 – 25 years
Speed
30 – 90 days
Rate
10 – 13% APR
✓ Best forAcquisitions, real estate, major equipment, expansion. FICO 680+. Owners with 2+ years tax returns, strong financials, and the patience to wait 30–90 days. Cheapest long-term capital available.
✗ Worst forAnyone who needs the money this week. Sub-650 FICO. Owners with tax liens or recent defaults. Businesses under 2 years old.
6

Invoice Factoring

Sell receivables, get paid today

Invoice factoring is the sale of unpaid invoices (usually B2B) to a factoring company at a discount, typically 1 to 3 percent per 30 days the invoice is outstanding. You get 70 to 90 percent of the invoice value upfront, the factor collects from your customer, and you receive the remainder minus the factor fee. Works only if your customers are creditworthy businesses, not consumers.

Amount
Up to invoice value
Term
Per invoice
Speed
24 – 72 hours
Rate
1 – 3% / 30 days
✓ Best forB2B businesses with Net 30, 60, or 90 invoicing. Trucking companies, staffing agencies, manufacturers, contractors. Personal credit and time in business matter less, customer creditworthiness matters most.
✗ Worst forB2C businesses (no invoices). Owners who don't want their customers to know about the factoring arrangement (most factors notify the customer). Small one-off cash needs.
7

Revenue-Based Financing (RBF)

Longer-term MCA cousin

Revenue-based financing is structurally similar to an MCA but with longer terms (12 to 36 months versus 4 to 24), lower factor rates (1.15 to 1.30 typical), and a more flexible repayment that scales up and down with monthly revenue rather than fixed daily debits. Good middle ground for established businesses that need MCA speed but a softer cash-flow impact.

Amount
$25K – $1M
Term
12 – 36 months
Speed
3 – 7 days
Rate
1.15 – 1.30 factor
✓ Best for$250K+ monthly revenue businesses needing $50K–$500K. FICO 620+. Owners who don't want a fixed daily MCA payment but need faster funding than SBA.
✗ Worst forSub-$25K monthly revenue (too small). Businesses needing under 6 months speed. New businesses (under 18 months).

How to pick: decision matrix

Three questions decide which product fits: how fast, what for, and what credit. The matrix below maps the most common combinations.

Your situation
Best fit
Backup option
Need cash in 24 hours, any credit
Merchant Cash Advance
Invoice Factoring (if B2B)
Buying equipment or a vehicle
Equipment Financing
SBA 504 (if over $250K)
Predictable spend, fixed monthly payment
Business Term Loan
SBA 7(a) (if you have 30+ days)
Seasonal swings, want a safety net
Business Line of Credit
MCA (only if LOC denied)
Buying a business or property
SBA 7(a) or 504
Term Loan (smaller deals)
B2B with Net 30+ invoicing, slow customers
Invoice Factoring
Line of Credit
Established, $250K+ monthly revenue
Revenue-Based Financing
Term Loan
FICO under 600, need capital
MCA
Equipment Financing (if asset-backed)

If none of these match cleanly, that is exactly what a broker is for. We submit your file across all 7 product lanes simultaneously, sort the offers, and recommend the strongest fit based on your actual numbers.

What we ask before recommending a product

Most brokers ask three questions and rush to a quote. We ask twelve, because the right product is rarely obvious from the first answer. The questions we ask on every application call:

From those answers we usually know within 5 minutes which 1 to 2 products fit and which to rule out. Then we shop the file to the lenders most likely to compete, present the offers, and you pick. (Curious about the exact eligibility thresholds for each product? See the full requirements breakdown.)

How the process works after you apply

1

2-minute application

One short form, no bank statements upfront, soft credit pull only. We review and call within 2 business hours during weekdays.

2

We shop your file

Based on the 12 questions above, we submit to 3 to 7 lenders most likely to compete for your specific product type. Offers come back same day to 48 hours.

3

You pick. We close.

We present the strongest 2 to 3 offers in plain English with the math laid out. You pick. The lender funds. We are paid by the lender at close, $0 from you.

Common timelines from application to wire: MCA 24 to 48 hours, term loan 3 to 5 days, line of credit 3 to 5 days, equipment 3 to 7 days, SBA 30 to 90 days, factoring 24 to 72 hours, RBF 3 to 7 days. The bottleneck is rarely us; it's usually documents (bank statements, tax returns) on your side.

Common mistakes when picking a funding product

Frequently asked questions

What are the main small business funding options?
Seven products cover virtually every small business funding scenario: merchant cash advance, business term loan, business line of credit, equipment financing, SBA loans, invoice factoring, and revenue-based financing. Most small businesses use 2 or 3 of these across their lifetime, often a term loan or SBA for big planned spends paired with a line of credit for ongoing working capital.
Which funding option is cheapest?
SBA 7(a) loans are typically the cheapest at prime plus 2.75 to 4.75 percent APR (currently 10 to 13 percent in 2026), with 10 to 25 year terms. The trade-off is speed: SBA loans take 30 to 90 days to fund. If you have time and the use case fits (acquisition, expansion, real estate), SBA almost always wins on total cost. If you need cash this week, SBA is the wrong product.
Which funding option is fastest?
Merchant cash advances fund in 24 to 48 hours, sometimes same day for clean files submitted before noon. Term loans through alternative lenders fund in 2 to 5 business days. Lines of credit, 2 to 5 days. Equipment, 2 to 7 days. SBA, 30 to 90 days. Faster products have higher rates because underwriting is lighter.
What credit score do I need for small business funding?
Depends on product. MCAs fund borrowers down to 500 FICO routinely because they underwrite off bank deposits, not personal credit. Term loans and lines of credit through alternative lenders typically want 600 plus. SBA 7(a) wants 680 plus and a 2-year track record. Equipment financing falls in the middle around 580 plus. There is a funding product for almost any credit profile down to 500; the cost just rises as the score falls. Read more on bad-credit funding here.
Can I get funding for a new business?
Most of these products require 6 to 12 months minimum in business with consistent revenue. Pre-revenue startups are typically funded through equity or SBA microloans (under $50K). We do not broker pre-revenue startup funding. If you have a registered business that has been generating revenue for 6 months and depositing into a business bank account, you usually have at least 2 or 3 products available.
How do I know which option is right for my business?
Three questions decide it: How fast do you need the money? What is the use case? What is your credit profile? Under 5 days narrows you to MCA, term loan, LOC, or equipment. Over 30 days opens up SBA. Equipment purchases open equipment financing. B2B receivables open factoring. Predictable spend opens term loans. We map these in 5 minutes on the application call. Or use our MCA calculator to see what an advance would cost first.
Do I have to pick just one funding option?
No, but be careful with stacking. Many businesses run a term loan and a line of credit simultaneously, which is fine because they serve different purposes. Stacking multiple MCAs is the dangerous pattern. If you already have an MCA and need more capital, talk to a broker about consolidation or renewal before adding another position.