Business financing options, explained simply
Six ways to finance a business, in plain language — what each one actually is, who it's built for, and how to tell them apart before you apply anywhere.
Fundur is a financing marketplace, not a lender. Checking your options is a soft inquiry that won't affect your credit score.
What's actually going on?
Nobody wakes up wanting a loan. You have a specific problem with a dollar amount attached to it. Find yours — the financing question tends to answer itself once the problem is clear.
A defined, short-term gap between a cost and the revenue that covers it — the exact shape of a working capital loan.
You already own the asset — an approved invoice. Invoice factoring turns it into cash now instead of in two months.
A specific asset purchase. Equipment financing is usually the cheaper route, because the equipment itself secures the loan.
A need that repeats but doesn't repeat predictably. A business line of credit costs nothing when you're not using it.
A long-horizon investment where the lowest total cost matters more than speed. That's squarely an SBA loan.
A single, defined, planned cost you can name a dollar amount for. A business term loan gives you the lump sum and one predictable payment.
A bounded, time-limited gap with a known end date — another job for a working capital loan, sized to the stretch, not the whole year.
Understanding your financing options
Most people hear "business loan" and picture one thing. In practice it's a toolbox — several genuinely different mechanisms bundled under one word. The differences matter more than which lender you choose, because the wrong shape of money for the right need is the single most expensive mistake a business can make. Four questions separate the six options below.
Does it arrive once, or can you draw on it repeatedly?
A lump sum shows up once, in full, and you repay it on a fixed schedule — a working capital loan, a term loan, and equipment financing all work this way. Revolving credit is different: you're given capacity, not cash, and you draw against it only when you need it, repaying and freeing it back up. A business line of credit is the one revolving product in the six.
Revolving capacity shown mid-cycle — drawn, then repaid, then available again.
What convinces the lender to say yes?
Most financing is credit-based — the lender is trusting your business's track record and cash flow. Equipment financing is asset-secured: the equipment itself is the collateral, which is usually why it prices better than an unsecured option for the same purchase. Invoice factoring isn't a loan at all — it's the sale of an asset you already own, an approved invoice, which is why your own credit matters less here than anywhere else in the six.
Secured or unsecured?
Secured financing pledges a specific asset and typically costs less because the lender has somewhere to go if repayment stops. Unsecured financing relies on the business's overall creditworthiness and usually moves faster, since there's no asset to appraise. Equipment financing is the clearest secured product here; working capital loans, lines of credit, and term loans are evaluated primarily on the strength of the business itself.
How does speed trade off against cost?
Financing that funds fast is generally priced for that speed. Financing that takes longer to close — more paperwork, a longer underwriting process — is usually the cheapest financing available, because the lender has more time and more certainty to offer a better rate. Where each of the six sits on that trade-off is covered in the comparison below.
Working Capital Loan
A working capital loan is short-term financing that gives your business a lump sum of cash to cover everyday operating costs — payroll, rent, inventory, and similar bills — during the stretch when expenses come due before your revenue arrives.
It shows up as one deposit and leaves as fixed payments on a schedule you know from day one. It's built for a gap you can point to and explain — not for buying something that will still be around in five years.
A specific, time-bounded cash gap, with revenue already coming in.
Buying equipment or funding a multi-year investment — costlier money for the wrong horizon.
Business Line of Credit
A business line of credit is a flexible form of revolving financing that gives your company access to a set credit limit — you can borrow against it whenever you need it, and interest runs only on what you draw.
You're approved for a limit once, then draw against it — and repay it — as many times as the need repeats. Undrawn capacity costs nothing, which is the entire point.
Costs that repeat but vary — materials, inventory, payroll timing that shifts month to month.
A single, large, one-time investment — a line refills for the next need, which isn't what a big purchase requires.
Business Term Loan
A business term loan is a form of financing that gives your company a single lump sum of capital up front — your loan amount — which you repay in fixed installments over a set period of time, called the term.
You get the whole amount up front and pay it down in equal installments. The payment is the same in month one as it is in the final month — that predictability is the entire point.
A single, defined, planned investment you can already put a number on.
A need that repeats or whose size you can't predict yet — a line of credit fits that better.
Equipment Financing
Equipment financing is business funding used to buy a specific piece of equipment — and the equipment itself typically serves as the collateral.
The loan is sized to the purchase, and the equipment secures it — usually why it prices better than borrowing the same amount unsecured.
Buying a specific, identifiable piece of equipment or vehicle.
Operating costs unrelated to a physical asset — that's a working capital loan or line of credit's job.
Invoice Factoring
Invoice factoring is a way to get paid early for work you've already done.
You're not borrowing against your own credit — you're selling an invoice you've already earned. Most of its value lands almost immediately; the rest follows, minus a fee, once your customer pays.
B2B or B2G businesses waiting on approved invoices from creditworthy customers.
A business without invoiced customers on payment terms — there's nothing to factor.
SBA Loan
An SBA loan is a small-business loan issued by a bank or online lender and partially guaranteed by the U.S. Small Business Administration — a federal agency.
A bank or online lender funds it; the SBA guarantees a share, which is what unlocks a lower rate and a longer term than most businesses can get elsewhere. The trade-off is a slower, more document-heavy process.
A major, long-horizon investment where total cost matters more than speed.
Anything urgent — the timeline rules it out for a same-week need.
These six cover the large majority of what small businesses actually need to finance. A few adjacent terms you'll see elsewhere — merchant cash advances, commercial real estate loans, franchise-specific financing — aren't part of Fundur's six; the FAQ below covers how, and whether, they relate.
How the six actually compare
Most "compare business loans" guides mean comparing lenders — this bank's rate against that one. That's a real step, but it's not the first one. Before you shop lenders, it helps to know how the structures differ, because the wrong structure costs more than a slightly worse rate on the right one. Read across the row you're weighing.
Scroll sideways to see all five columns
| Product | How it works | Relative speed | What secures it | Best when |
|---|---|---|---|---|
| Working Capital Loan | Lump sum, fixed repayment schedule | Fastest | Business creditworthiness | You have a specific, dated cash gap |
| Business Line of Credit | Revolving capacity, draw and repay | Fastest | Business creditworthiness | Costs repeat but the amount varies |
| Business Term Loan | Lump sum, fixed installments | Fast | Business creditworthiness | One large, planned investment |
| Equipment Financing | Lump sum, sized to the purchase | Fast | The equipment itself | Buying a specific asset |
| Invoice Factoring | Advance against an approved invoice | Fast after setup | The invoice — your customer's credit | You're owed money already |
| SBA Loan | Lump sum, fixed installments | Slowest | Government guaranty + business qualifications | Lowest cost matters more than speed |
Speed varies by product. Working capital and lines of credit can fund within a day; SBA loans take 30–90 days. Rates and fees vary by lender and by business, and any figures shown are illustrative — your actual terms are determined during underwriting and disclosed in full before you accept.
Two pairs come up most often: a line of credit versus a term loan, and invoice factoring versus invoice financing — both products' own pages carry the full comparison rather than repeating it here.
Which one fits your situation?
Two ways to get there: the fast version below, or the full picture in the six cards that follow.
The 60-second version
- 1
Need a specific piece of equipment or a vehicle?
→ Equipment Financing - 2
Waiting on an invoice a customer already approved?
→ Invoice Factoring - 3
Costs repeat, but the amount changes every time?
→ Business Line of Credit - 4
One big planned investment — and you can wait 30–90 days for the best rate?
→ SBA Loan - 5
One big planned investment — but you need it sooner?
→ Business Term Loan - 6
A short, specific gap between a cost and your revenue?
→ Working Capital Loan
The full picture
"Payroll's Friday. The money I'm owed isn't here yet."
Built exactly for this — a lump sum that covers the gap and repays on a schedule you already know.
Explore working capital loans"Some months I need cash for supplies. Some months I don't."
Costs nothing until you draw it — built for exactly this kind of on-again, off-again need.
Explore lines of credit"The machine we need costs more than I want to pull from savings."
Sizes the loan to the purchase and uses the equipment as collateral — usually the cheapest way to buy it.
Explore equipment financing"My customer's good for it — they just pay on their own schedule."
Turns an invoice you've already earned into cash now, instead of whenever it's convenient for your customer.
Explore invoice factoring"I know exactly what this expansion costs. I want one predictable payment."
Gives you the full amount up front and one fixed payment for the life of the loan — no surprises to plan around.
Explore term loans"I'm buying the building. I can wait for the better rate."
Trades a longer close for the lowest rate and longest term available — worth it when you're not in a hurry.
Explore SBA loansAsk any lender for two numbers
Whichever option fits, you'll eventually be comparing an actual offer — from Fundur's network or anyone else's. Here's what makes that comparison honest, so you're equipped to judge any offer, not just ours.
An interest rate compounds on a shrinking balance. A factor rate — common on shorter-term products — is a flat multiplier on the full amount, charged whether or not you pay early. The two numbers aren't comparable on their own; convert to a real dollar cost before you decide.
Time in business, revenue consistency, credit profile, and — for secured products — the asset itself. Lenders price risk, not your industry or your intentions.
Origination fees, draw fees, prepayment penalties, and late fees can move the real cost of an offer more than the headline rate does.
A short-term product stretched to cover a long-term need gets expensive fast. A long-term product for a short-term need locks up capital you didn't need to commit.
Before you sign anything, ask for two numbers, in writing: the total dollar amount you'll repay, and the APR. If a lender won't give you both plainly, that's the answer.
Rates and fees vary by lender and by business, and any figures shown are illustrative. Your actual terms are determined during underwriting and disclosed in full before you accept.
Talk to a person, not a form
A funding advisor will walk through your situation and point you to the option that actually fits — and will tell you plainly if now isn't the right time to borrow at all.
See my optionsFrom application to funded — without shopping lenders one by one
This is the step Fundur actually replaces: the part where you'd otherwise call five lenders yourself and fill out five applications to compare five answers.
Apply once
Tell us what you need. One form covers all six products — you don't have to pick one before you've talked to anyone.
Matched to real lenders
Your business is checked against Fundur's lender network, not one company's single yes-or-no.
Compare actual offers
See real terms side by side. Ask for the two numbers — total repaid and APR — before you decide anything.
Funded
Timelines vary by product — from within a day for working capital and lines of credit, to 30–90 days for an SBA loan.
Fundur is a financing marketplace, not a lender. We don't make credit decisions or guarantee approval, rates, terms, or funding times.
What it takes to see your options
These four signals get you in the door across all six products. Meeting them doesn't guarantee approval for any one product — it means there's something here worth checking.
Typical signals only — exact thresholds vary by lender and borrower.
These are the typical minimums to see what you qualify for. Requirements vary by product — SBA loans and term loans generally require more time in business and a stronger credit profile.
What you'll likely be asked to show
- Recent business bank statements (typically 3–4 months)
- Proof of time in business (formation documents or license)
- A government-issued ID
- A voided check, for some products
Exactly what's required depends on the product and lender — the fastest way to get a straight answer for your specific situation is to see your options directly.
See my optionsFrequently asked questions
What's the difference between a business loan and a business line of credit?
What credit score do I need to qualify?
How much can my business borrow?
How fast can I actually get funded?
Do I need collateral?
Will checking my options hurt my credit score?
Is Fundur a lender?
What's the difference between invoice factoring and invoice financing?
Is a merchant cash advance the same as a working capital loan?
Does Fundur offer business grants?
How is this different from just going to my own bank?
Does Fundur offer equity or investment funding?
What's the difference between a term loan and an SBA loan?
How long does the whole application process take?
See your real options — not a guess
One application. All six products considered. No hard credit pull until you say go.
Fundur is a financing marketplace, not a lender. Checking your options is a soft inquiry that won't affect your credit score.