The field

Every way to fund a business

Sixteen instruments, ordered by what they cost rather than by who advertises hardest. The single most expensive mistake in small business finance is reaching for fast money when cheap money was available with two more weeks of patience - so we lead with the cost ladder.

Start here

The cost ladder

Ranked cheapest to most expensive in APR-equivalent terms. Speed generally runs in the opposite direction, and that trade is the whole decision.

#	Instrument	Typical amount	Cost	Speed	Relative cost
1	Small business grants	$500 to $250,000+	No repayment; substantial time cost	1-9 months	-
2	Business acquisition financing	$100,000 to $5 million+	SBA 7(a) rates for most deals under $5M	60-120 days	$
3	SBA 504 loan	Typically up to $5.5 million in the SBA portion	Fixed, pegged to a bond sold at funding	60-120 days	$
4	SBA 7(a) loan	Up to $5 million	Prime + 3% to prime + 6.5%, by loan size	30-90 days	$
5	CDFI loan	$1,000 to $2 million+	Typically 5%-12%	2-8 weeks	$$
6	Commercial real estate loan	$100,000 to $20 million+	Varies with index, term, and occupancy	45-120 days	$$
7	Conventional business term loan	$25,000 to several million	Prime + 1% to prime + 8%, credit-dependent	2-8 weeks	$$
8	SBA Express loan	Up to $500,000	Higher permitted spread than standard 7(a)	Days to a few weeks	$$
9	SBA microloan	Up to $50,000	Typically 8%-13%	2-6 weeks	$$
10	State small business credit initiative	Varies widely by state programme	Below market, structure-dependent	Weeks to months	$$
11	Business line of credit	$10,000 to $5 million	Prime + 1% to 25%+ APR, by lender type	Same day to 4 weeks	$$$
12	Equipment financing	$5,000 to $5 million+	6%-30% APR, credit- and asset-dependent	1 day to 2 weeks	$$$
13	Invoice factoring	$10,000 to $10 million+	1%-5% per 30 days of the invoice face value	1 day to 1 week after setup	$$$$
14	Invoice financing	$10,000 to $5 million	1%-3% per 30 days plus interest	1 day to 1 week	$$$$
15	Working capital loan	$5,000 to $500,000	8%-60%+ APR, by lender type	Same day to 3 weeks	$$$$
16	Business credit cards	$1,000 to $100,000+ per card	0% intro to 30%+ APR carried	Minutes to 2 weeks	$$$$$
17	Revenue-based financing	$10,000 to $5 million	Typically 1.15×-1.5× of the amount advanced	1 day to 2 weeks	$$$$$
18	Merchant cash advance	$5,000 to $500,000	Commonly 40%-350% APR equivalent	Same day to 3 days	$$$$$$

Cost bands are editorial judgements based on published rate ranges across each category, expressed as APR-equivalent so that products quoting factor rates and discount fees can be compared to products quoting interest. They are a guide to relative expense, not a quote - actual pricing depends on the lender, the borrower, and the day.

SBA-backed

SBA 7(a) loan

The SBA's flagship guarantee programme - the single largest source of long-term small business credit in the United States.

30-90 daysRead

SBA 504 loan

Long-term fixed-rate financing for real estate and heavy equipment, structured as three loans in one.

60-120 daysRead

SBA Express loan

A faster, smaller 7(a) variant where the lender uses its own forms and gets an SBA answer within 36 hours.

Days to a few weeksRead

SBA microloan

Small loans up to $50,000 made by non-profit intermediaries, usually bundled with business training.

2-6 weeksRead

Business acquisition financing

Borrowing to buy an existing business - the most common large use of the SBA 7(a) programme.

60-120 daysRead

Bank & conventional

Conventional business term loan

A lump sum from a bank repaid on a fixed schedule, without a government guarantee.

2-8 weeksRead

Business line of credit

A revolving facility you draw on and repay as needed, paying interest only on the balance.

Same day to 4 weeksRead

Equipment financing

A loan or lease secured by the equipment itself, which often means no additional collateral.

1 day to 2 weeksRead

Commercial real estate loan

A mortgage on property your business occupies or owns as an investment.

45-120 daysRead

Receivables-based

Invoice factoring

Selling unpaid invoices to a factor at a discount for immediate cash.

1 day to 1 week after setupRead

Invoice financing

Borrowing against unpaid invoices while keeping ownership and collection in your hands.

1 day to 1 weekRead

Public & mission-driven

CDFI loan

Financing from a mission-driven Community Development Financial Institution, priced below the alternative market.

2-8 weeksRead

State small business credit initiative

Federal money deployed through state programmes - loan guarantees, participations, and venture funds.

Weeks to monthsRead

Small business grants

Money that does not need to be repaid. Rare, and heavily impersonated by scams.

1-9 monthsRead

Alternative & short-term

Merchant cash advance

High cost

Not a loan: the purchase of a slice of your future revenue at a discount, repaid daily from receipts.

Same day to 3 daysRead

Revenue-based financing

High cost

Capital repaid as a fixed percentage of monthly revenue until a set multiple is delivered.

1 day to 2 weeksRead

Working capital loan

Short-term financing for day-to-day operations rather than assets.

Same day to 3 weeksRead

Cards

Business credit cards

High cost

Revolving credit with the shortest approval time of any product, and the highest carried cost.

Minutes to 2 weeksRead

We are a publisher, not a lender or broker. We never take applications and are never paid by borrowers. Read the full disclosures.