Business funding options

Merchant cash advance (MCA)

With a merchant cash advance, a funder buys a portion of your business's future sales or receivables at a discount and provides a lump sum up front. Instead of fixed loan payments, it is typically repaid through agreed remittances tied to your sales, often collected daily or weekly. Because it is a purchase of receivables rather than a loan, the cost is usually expressed as a factor rate, not an interest rate. Review the total amount to be repaid before accepting.

A business might consider it for

• Businesses with steady card or sales volume
• Short-term needs where speed matters more than lowest cost

Business line of credit

A line of credit gives your business access to funds up to a set limit. You draw what you need, when you need it, and typically pay interest or fees only on the amount you use. As you repay, the available credit generally becomes usable again.

A business might consider it for

• Uneven cash flow or seasonal swings
• Having funds available for needs you cannot fully predict

SBA loans, including SBA 7(a)

SBA loans are made by lenders that participate in U.S. Small Business Administration programs, with part of the loan guaranteed by the SBA. The 7(a) program can be used for purposes such as working capital, equipment, real estate and refinancing. SBA loans generally require more documentation and take longer to review than many other options.

A business might consider it for

• Established businesses with time to complete a detailed application
• Larger or longer-term needs

Invoice factoring

With invoice factoring, your business sells unpaid invoices to a factoring company, which advances a portion of their value now and collects payment from your customers. The remainder, less the factoring fee, is paid to you when the customer pays. Approval often depends heavily on your customers' payment history.

A business might consider it for

• Businesses that invoice other businesses on 30 to 90 day terms
• Freeing up cash tied in receivables

Bridge funding

Bridge funding is short-term financing meant to cover a specific gap, such as waiting on a property sale, a longer-term loan closing or a large receivable. It is usually repaid when the expected money arrives, and it can cost more than long-term financing because of its short duration.

A business might consider it for

• A known, near-term source of repayment
• Timing gaps around transactions or projects

Real estate-secured business line of credit

A real estate-secured business line of credit uses the equity in commercial or investment property you own as collateral for a revolving line your business can draw from. Because it is secured by property, the amount and terms depend in part on the property's value and existing liens. It is for business purposes only and is not offered on a personal residence through this site.

A business might consider it for

• Business owners with equity in commercial or investment property
• Ongoing or larger business needs