Knowledge Center
Business funding, explained plainly.
Guides written by funding advisors to help you understand your options before you apply.
SBA Loans
6 min readHow to Qualify for an SBA LoanTo qualify for an SBA loan, your business generally needs to be a for-profit U.S. company that meets SBA size standards, shows enough cash flow to repay, and has owners with acceptable credit who will personally guarantee the loan. The SBA sets the baseline rules, but the participating lender makes the credit decision, so requirements vary from bank to bank.5 min readSBA 7(a) vs. 504 Loans: Which One Fits Your Project?SBA 7(a) loans are flexible and can fund working capital, equipment, acquisitions, refinancing and real estate, while SBA 504 loans are built specifically for major fixed assets like owner-occupied buildings and long-life equipment. If you need money for operations or a business purchase, 7(a) is usually the fit; if you are buying or building real estate you will occupy, 504 is often worth comparing.
Cash Flow
5 min readLine of Credit vs. Working Capital LoanA business line of credit gives you a credit limit you can draw from, repay and reuse, paying interest only on what you use, while a working capital loan gives you a lump sum that you repay on a fixed schedule. Lines of credit generally suit recurring or unpredictable cash gaps, and working capital loans suit a specific, one-time need with a known cost.5 min readWhat Is Invoice Factoring and How Does It Work?Invoice factoring is a way to get cash from unpaid invoices by selling them to a factoring company, which advances most of the invoice value now and pays the remainder, minus its fee, when your customer pays. It is mainly used by businesses that invoice other businesses or government agencies on payment terms and want faster access to cash than their customers' payment cycle allows.4 min readBusiness Loans for Payroll: Options and RisksBusinesses commonly cover payroll gaps with a business line of credit, invoice factoring or a short-term working capital loan, depending on how quickly they need funds and what causes the shortfall. Financing payroll makes the most sense for temporary timing gaps; if payroll is regularly exceeding revenue, the underlying problem needs to be addressed alongside any funding.
Equipment
4 min readEquipment Financing vs. Leasing: Which Is Better?Equipment financing lets you own the equipment from the start and build equity as you repay, while leasing lets you use it for a set period, often with lower upfront costs and the option to return, renew or buy it at the end. Financing usually suits equipment you will keep for many years, and leasing often suits equipment that becomes outdated quickly.5 min readSection 179 and Equipment Financing ExplainedSection 179 of the tax code can let a business deduct the cost of qualifying equipment in the year it is placed in service, rather than depreciating it over several years, and that can apply even when the equipment is financed. Annual limits and rules change, so confirm the current figures and your eligibility with a tax professional before making a purchase decision.
Basics
5 min readDocuments Needed for a Business Loan: A ChecklistMost business lenders ask for recent business bank statements, business and personal tax returns, financial statements, a government-issued ID, and basic business information such as your EIN and formation documents. The exact list depends on the loan type, with SBA and bank loans requiring the most documentation and short-term alternative loans often requiring the least.5 min readHow Business Loan Rates Work: APR, Factor Rates and FeesBusiness financing is priced in several ways, including interest rates, APRs, factor rates and fees, and the same stated number can mean very different costs depending on the structure and term. The most reliable way to compare offers is to look at the total amount you will repay, the APR or an estimated annualized cost, and how much cash you actually receive after fees.5 min readHow to Compare Business Loan OffersTo compare business loan offers, line them up on the cash you actually receive, the total amount you will repay, the APR or estimated annualized cost, the payment amount and frequency, and terms like collateral, personal guarantees and prepayment rules. The cheapest offer is the one with the lowest true cost that your cash flow can comfortably support, not necessarily the one with the lowest quoted rate.
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