Resources
Understand the differences between financing options.
How financing structures differ in how they work, how they are repaid and which costs to examine. Specific terms depend on the financing offered to your business.
How to read this comparison
Different structures can't always be compared by total cost or monthly payment alone. A line of credit, a fixed term loan and invoice factoring repay in different ways, so look at how each works, how it is repaid and its full cost together.
SBA Loans
- How it works
- Distinct SBA programs (7(a) and 504) with different eligible uses and structures
- Repayment
- Terms depend on the program and the financing purpose
- Costs to examine
- Rates, program and lender fees, collateral and any required borrower contribution
Business Term Loans
- How it works
- A lump sum repaid on a fixed schedule
- Repayment
- Scheduled payments, often monthly, over a set term
- Costs to examine
- Interest rate, origination and other fees, prepayment terms and total payback
Business Line of Credit
- How it works
- A credit limit you draw against as needed
- Repayment
- Payments on the amount drawn; available credit renews as you repay
- Costs to examine
- Interest on drawn balances, draw and maintenance fees, and renewal terms
Working Capital
- How it works
- A short-term advance or loan sized to revenue
- Repayment
- Often daily or weekly payments over months
- Costs to examine
- Fees or factor rate as a total payback, payment frequency and any prepayment terms
Equipment Financing
- How it works
- A loan or lease secured by the equipment itself
- Repayment
- Scheduled payments over a term tied to the equipment's useful life
- Costs to examine
- Rate, down payment, fees and end-of-lease options
Invoice Factoring
- How it works
- An advance against, or sale of, unpaid customer invoices
- Repayment
- Settled as your customers pay the invoices
- Costs to examine
- Advance rate, fees by time outstanding and recourse terms
Commercial Real Estate
- How it works
- A loan secured by owner-occupied or investment property
- Repayment
- Scheduled payments over a long term, sometimes with a balloon payment
- Costs to examine
- Rate type, down payment, appraisal and closing costs, and prepayment terms
Ecommerce Funding
- How it works
- An advance or loan based on platform sales
- Repayment
- Often a share of daily or weekly sales
- Costs to examine
- Total payback, the share of sales withheld and how repayment changes with sales
HELOC/CELOC
- How it works
- A revolving line secured by home or commercial property equity
- Repayment
- Payments on the amount drawn, under the line's terms
- Costs to examine
- Rate type, closing costs and the risk to the property used as collateral
General information, not an offer of financing. Actual terms depend on the financing provider and your business. The SBA page explains the separate 7(a) and 504 program limits.
Capital Ally
Compare the offers you actually receive.
Check eligibility, then see each offer's amount, payment, cost per dollar and total payback side by side. Checking does not affect your credit score.