A small business loan is financing provided to small businesses to help with startup costs, operations, expansion, or other business-related needs.Loans can come from banks, credit unions, online lenders, or government-backed programs
🏦 Common Types of Small Business Loans
Sure! Here’s a quick breakdown of small business loans—what they are, types, and how to get one:
💼 What is a Small Business Loan?
A small business loan is financing provided to small businesses to help with startup costs, operations, expansion, or other business-related needs.
Loans can come from banks, credit unions, online lenders, or government-backed programs.
🏦 Common Types of Small Business Loans
Term Loans
Lump sum of cash repaid over time with interest.
Great for: long-term investments, equipment, expansion.
SBA Loans (U.S. only)
Backed by the Small Business Administration. Lower interest, longer terms.
Popular options: SBA 7(a), SBA Microloan, SBA CDC/504.
Business Lines of Credit
Flexible funding—you borrow what you need, repay, and borrow again.
Great for: managing cash flow, unexpected expenses.
Equipment Financing
Specifically for purchasing equipment. Equipment often acts as collateral.
Invoice Financing / Factoring
Get cash based on unpaid invoices.
Good for: businesses with long billing cycles.
Merchant Cash Advances
Advance based on future sales. Quick but expensive.
Use cautiously—high fees and fast repayment.
Microloans
Smaller amounts (typically under $50,000).
Ideal for startups or very small businesses.
📝 What Do You Need to Qualify?
Good credit (personal and/or business)
Business plan and financial projections
Time in business (some lenders require 6 months – 2 years)
Revenue history
Collateral (sometimes)
🔍 Where Can You Apply?
Preview
Banks & Credit Unions – Lower rates, stricter requirements
Online Lenders (like Kabbage, BlueVine, OnDeck) – Fast funding, higher rates
SBA-Approved Lenders – Lower interest, longer processing
Community Development Financial Institutions (CDFIs) – Great for underserved communities