What Business Loans Are Available?

What Business Loans Are Available? Complete Guide to Business Financing Options

When searching for business financing, you’ll discover dozens of loan types designed for different needs, industries, and business stages. Understanding what business loans are available can help you choose the right financing solution for your specific situation. This comprehensive guide breaks down the most common types of business loans, their features, and when to use each one.

Traditional Bank Loans

Term Loans

Term loans are the most straightforward type of business financing. You receive a lump sum upfront and repay it over a set period with fixed monthly payments.

Key Features:

Loan amounts: $25,000 to $5+ million
Repayment terms: 1-10 years
Interest rates: Typically lower than alternative financing
Collateral: May be secured or unsecured

Best for: Equipment purchases, expansion projects, debt consolidation, or major business investments.

Business Lines of Credit

A business line of credit works like a business credit card, giving you access to funds up to a predetermined limit that you can draw from as needed.

Key Features:

Credit limits: $10,000 to $1+ million
Only pay interest on funds used
Revolving credit that replenishes as you repay
Flexible repayment terms

Best for: Managing cash flow, covering seasonal expenses, emergency funding, or short-term working capital needs.

Business Credit Cards

While technically not loans, business credit cards provide revolving credit for everyday business expenses.

Key Features:

Credit limits vary based on creditworthiness
Rewards programs and cash back options
Grace periods for interest-free payments
Separate business and personal expenses

Best for: Small purchases, expense tracking, building business credit, and earning rewards on regular business spending.

SBA Loans

The Small Business Administration backs various loan programs to help small businesses access affordable financing.

SBA 7(a) Loans

The most popular SBA loan program, offering flexible terms for various business purposes.

Key Features:

Loan amounts: Up to $5 million
Repayment terms: Up to 25 years
Lower down payments required
SBA guarantee reduces lender risk

Best for: Working capital, equipment purchases, real estate, debt refinancing, and business acquisitions.

SBA Express Loans

A streamlined version of SBA 7(a) loans with faster approval times.

Key Features:

Loan amounts: Up to $500,000
Faster approval process (36 hours for SBA response)
Higher interest rates than standard SBA loans
Less paperwork required

Best for: Businesses needing quick access to smaller loan amounts.

SBA Microloans

Small loans designed for startups and small businesses with modest funding needs.

Key Features:

Loan amounts: Up to $50,000
Shorter repayment terms
May have more flexible credit requirements
Often include business counseling

Best for: Startups, inventory purchases, working capital, and small equipment purchases.

SBA 504 Loans

Designed specifically for real estate and large equipment purchases.

Key Features:

Loan amounts: Up to $5.5 million
Long-term, fixed-rate financing
Requires 10% down payment from borrower
Two-loan structure with SBA and bank participation

Best for: Commercial real estate purchases, major equipment acquisitions, and facility improvements.

Asset-Based Financing

Equipment Financing

Loans specifically designed to purchase business equipment, where the equipment serves as collateral.

Key Features:

Loan amounts: Up to 100% of equipment value
Repayment terms match equipment’s useful life
Lower interest rates due to collateral
Equipment can be new or used

Best for: Manufacturing equipment, vehicles, technology, medical equipment, and construction machinery.

Invoice Financing (Factoring)

Convert your outstanding invoices into immediate cash by selling them to a factoring company.

Key Features:

Advance rates: 70-90% of invoice value
Quick funding (often within 24-48 hours)
No monthly payments
Customer credit matters more than yours

Best for: B2B businesses with creditworthy customers, seasonal businesses, and companies with cash flow gaps.

Inventory Financing

Loans secured by your existing inventory or to purchase new inventory.

Key Features:

Loan amounts based on inventory value
Seasonal flexibility
Inventory serves as collateral
May include revolving credit features

Best for: Retailers, wholesalers, manufacturers, and seasonal businesses needing to stock inventory.

Accounts Receivable Financing

Borrow against your outstanding invoices without selling them to a factor.

Key Features:

Borrow percentage of receivables value
Keep customer relationships intact
Flexible repayment as invoices are collected
Generally lower cost than factoring

Best for: Established businesses with consistent receivables and good customer payment history.

Alternative Financing Options

Revenue-Based Financing

Receive funding in exchange for a percentage of future revenue until the loan is repaid.

Key Features:

Repayment tied to revenue performance
No fixed monthly payments
Faster approval than traditional loans
Higher cost than traditional financing

Best for: Businesses with consistent revenue streams, seasonal businesses, and companies with limited collateral.

Merchant Cash Advances

Receive a lump sum in exchange for a percentage of future credit card sales.

Key Features:

Very fast funding (often same day)
No fixed payments
Repayment through daily credit card sales
Higher cost than traditional financing

Best for: Restaurants, retail businesses, and companies needing emergency funding (use cautiously due to high costs).

Peer-to-Peer Lending

Online platforms that connect borrowers directly with individual investors.

Key Features:

Competitive rates for qualified borrowers
Online application process
Fixed monthly payments
May have origination fees

Best for: Established businesses with good credit seeking alternatives to traditional bank loans.

Specialized Industry Loans

Real Estate Loans

Commercial Mortgages

Long-term loans for purchasing commercial real estate.

Key Features:

Loan amounts: Up to 80% of property value
Terms: 5-25 years
Fixed or variable rates
Property serves as collateral

Bridge Loans

Short-term financing for real estate transactions.

Key Features:

Quick closing times
Higher interest rates
Short terms (6-24 months)
Used until permanent financing is secured

Healthcare Financing

Specialized loans for medical practices and healthcare facilities.

Key Features:

Understanding of healthcare industry
Equipment and practice acquisition loans
May include practice valuation services
Flexible repayment terms

Franchise Financing

Loans specifically designed for franchise purchases and operations.

Key Features:

Lenders familiar with franchise models
May have relationships with franchisors
Can include working capital and equipment
SBA loans often available for franchises

Construction Loans

Short-term loans for construction projects that convert to permanent financing.

Key Features:

Interest-only payments during construction
Funds released in stages as work progresses
Converts to term loan upon completion
Requires detailed project plans

Government and Grant Programs

USDA Rural Development Loans

USDA programs specifically for businesses in rural areas.

Key Features:

Below-market interest rates
Loan guarantees available
Focus on job creation in rural areas
Various program types available

State and Local Programs

Many states and municipalities offer business loan programs with favorable terms.

Key Features:

Lower interest rates
Flexible qualification requirements
May include grants or tax incentives
Focus on local economic development

Find programs in your area through your local Small Business Development Center.

Newer Financing Options

Online Term Loans

Digital-first lenders offering streamlined applications and fast funding.

Key Features:

Quick approval and funding
Online application process
May have less stringent requirements
Higher interest rates than banks

Invoice Trading Platforms

Marketplaces where businesses can sell individual invoices to investors.

Key Features:

Sell invoices individually
Competitive rates through bidding
Keep customer relationships
Technology-driven process

Supply Chain Financing

Programs that help businesses get paid faster by their large corporate customers.

Key Features:

Leverages buyer’s credit rating
Lower cost financing
Improves supplier cash flow
Usually arranged by large customers

How to Choose the Right Business Loan

When evaluating what business loans are available for your situation, consider:

Your Business Profile

Time in business
Annual revenue
Credit score
Industry type
Collateral available

Loan Purpose

Working capital
Equipment purchase
Real estate acquisition
Expansion funding
Debt consolidation

Financial Terms

Interest rates and fees
Repayment terms
Funding speed
Qualification requirements

Lender Type

Traditional banks for lowest rates
Alternative lenders for speed and flexibility
SBA lenders for favorable terms
Specialized lenders for industry expertise

Preparing for the Application Process

Regardless of which loan type you choose, prepare these documents:

Financial statements (3 years)
Tax returns (business and personal)
Bank statements (6-12 months)
Business plan
Cash flow projections
Collateral documentation
Legal documents (articles of incorporation, licenses)

For more guidance on loan preparation, consult resources like SCORE, which offers free business mentoring and loan preparation assistance.

Conclusion

Understanding what business loans are available is the first step toward securing the right financing for your business. From traditional bank loans and SBA programs to alternative financing and specialized industry loans, there are options for businesses at every stage and in every situation.

The key is matching your specific needs, qualifications, and timeline with the right type of financing. Consider factors like cost, speed, qualification requirements, and repayment terms when evaluating your options.

Find the Right Financing Solution

At Solutions Financial Services, we specialize in helping established businesses navigate the complex world of business financing. Our team understands the various loan types available and can help match you with the financing solution that best fits your business needs and qualifications.

Whether you need working capital, equipment financing, or expansion funding, we work with businesses that have been operating for over a year and need substantial funding to grow. Contact us today to discuss your financing needs and explore the loan options available to your business.

This guide provides general information about business loan types. Specific terms, rates, and qualification requirements vary by lender and change frequently. Always consult with qualified financial professionals and compare multiple options before making financing decisions.