Funding options for different stages of business.
No single product is the best fit for every business. The right fit depends on what the capital is for, how quickly it is needed, how revenue comes in, and what payment structure the business can support.
Business line of credit
A business line of credit can provide reusable access to capital up to an approved limit. It may make sense for inventory purchases, seasonal gaps, payroll timing, or other recurring working-capital needs.
Good questions to ask
- Is there a draw fee?
- When does interest begin?
- How often are payments due?
- Are there maintenance or unused-line fees?
Term loan
A term loan provides a lump sum with a stated repayment schedule. It may fit a defined project with a measurable cost, such as equipment, a new location, renovations, or a planned expansion.
Good questions to ask
- What is the annual percentage rate, if applicable?
- What is the full repayment amount?
- Is there a prepayment penalty or discount?
- Is collateral or a personal guarantee required?
Revenue-based financing / Merchant cash advance
Revenue-based products are generally evaluated on deposits, sales, and cash flow. Payments may be daily or weekly, and the transaction may use a factor rate rather than an interest rate. These products can be faster or more flexible than traditional bank credit, but they can also carry a higher cost.
Good questions to ask
- What is the purchase amount and total remittance amount?
- What percentage or fixed amount is collected, and how often?
- Can payments be reconciled if revenue falls?
- Does early payoff reduce the total cost?