Small business loans. Where to find capital, what it costs.
Most small businesses do not need or qualify for venture capital. They need a loan or line of credit to fund growth, equipment, real estate, or working capital. This guide covers the full small-business financing landscape: SBA programs, traditional bank loans, online lenders, equipment-specific financing, invoice factoring, and lines of credit. Including what each costs, who qualifies, and how long the application actually takes.
Start here.
Most common SBA loan. Up to $5M. Use for working capital, expansion, equipment, real estate. 10-25 year terms. Prime + 2-4%.
For real estate and major equipment only. Up to $5.5M. 10-25 year terms. Fixed rates.
Up to $50k. For very small businesses and underserved markets.
OnDeck, Bluevine, Funding Circle, Kabbage. Faster than SBA (days vs months) but higher rates (8-99% APR).
Revolving credit. Pay interest only on what you draw. Useful for working capital fluctuations.
The full picture.
SBA 7(a) loan
The default SBA loan. Used for almost anything: working capital, debt refinance, equipment, real estate, business acquisition, expansion. Loan amounts $50k-$5M. Terms: 10 years (working capital), 25 years (real estate). Rates: Prime + 2.25% to 4.75%. SBA guarantees 75-85% of the loan to the lender, reducing lender risk. Application takes 60-120 days. Down payment: 10-30% typical.
SBA 504 loan
For real estate and large equipment only. Three-party structure: bank lender 50%, CDC (Certified Development Company) 40%, borrower 10%. Loan up to $5.5M ($5M for manufacturing). Fixed rates over 10-25 years. Best for asset-heavy purchases.
SBA Microloan
Up to $50k. Distributed through nonprofit intermediaries. Higher rates than 7(a) but accessible to newer or smaller businesses. Good for first-time borrowers.
Traditional bank business loan
Term loans from banks without SBA guarantee. Faster than SBA. Lower amounts typically. Better rates than online lenders. Requires strong credit, time in business (typically 2+ years), and revenue.
Business line of credit
Revolving credit. Like a credit card but with higher limits and lower rates. Draw what you need, pay interest only on the drawn amount. Useful for inventory purchases, seasonal cash flow, working capital. Banks, SBA Express, and online lenders all offer.
Online business lenders
OnDeck, Bluevine, Funding Circle, Kapitus, Credibly, others. Application in minutes. Decision in 1-3 days. Funding in days. Rates: 8-99% APR (effective). Much faster than SBA, much more expensive. Good for short-term needs.
Equipment financing
Loan or lease secured by the equipment itself. The equipment is collateral, reducing risk for the lender. Lower rates than unsecured business loans. Used for vehicles, machinery, technology.
Invoice factoring
Sell outstanding invoices to a factor for immediate cash (typically 70-90% of invoice value). Factor collects from the customer. Useful for cash flow when customers pay slowly. Effective rates 10-60% annualized.
Revenue-based financing
Repayment as percentage of monthly revenue. Total repayment is a multiple of borrowed amount (1.3-2x typical). Pipe, Capchase, Stenn, Founderpath for SaaS. Clearco for ecommerce.
Business credit cards
Useful for small ongoing expenses + travel. Building business credit history. Rewards. APR 18-28%. Limits typically $5k-$50k for new businesses.
Common questions.
What credit score do I need for an SBA loan?
How long does SBA approval take?
Do I need collateral for an SBA loan?
What is a personal guarantee?
Can I use an SBA loan to buy a business?
What is the cheapest way to borrow for working capital?
Can I get a loan as a sole proprietor?
What is debt-to-income ratio for business loans?
Do I need a business plan to get a loan?
Build the foundation.
Entity, EIN, banking, cap table, contracts, books. Everything funders, lenders, and acquirers want to see.
This guide is educational. Funding decisions require professional advice from licensed attorneys and CPAs.
On the $129/yr Compliance Annual Filings plan, we cover state late fees.
When you autofile your annual report through the $129/yr plan and we miss the deadline, we pay the state's late fee. The guarantee applies to that specific plan and the filings it includes. Other File.Business services are billed at the prices on this page.