# Every type of business loan, explained

Source: https://businessloanbroker.ai/business-loans/
Site: BusinessLoanBroker.ai (powered by Levr)

> Every type of business loan in plain terms: term loans, SBA, lines of credit, equipment, factoring, MCA and more, with typical costs and who qualifies.

There are about two dozen kinds of business financing, and most owners only need the three or four that fit how their business earns money. The quickest way to choose is to ask what will repay the loan: operating cash flow, future sales, unpaid invoices, an asset, or money a program owes you. This page sorts every product by that answer, with typical costs, so you can pick one and apply once.

## Key facts
- **Products covered:** 28 types of business financing, US first, Canada where it differs
- **Typical cost range:** Roughly 6% APR for secured bank loans to over 100% APR for merchant cash advances
- **Typical speed:** Same day for cards and advances, 30 to 90 days for SBA and real estate
- **One application:** Reaches lenders in every category below, free for your business

## How do you choose a business loan?

Start with what will repay the money, not with the product name. Lenders underwrite the source of repayment, so match the product to it. Steady profit points to a cash flow loan. Fast growth without profit points to financing tied to sales. Slow paying customers point to invoices. A purchase points to the asset itself. Our guide to [getting a business loan](https://businessloanbroker.ai/guides/how-to-get-a-business-loan/) walks through this.

## Which loans are repaid from operating cash flow?

The classic loans: [term loans](https://businessloanbroker.ai/business-loans/term-loans/), [SBA loans](https://businessloanbroker.ai/business-loans/sba-loans/), [lines of credit](https://businessloanbroker.ai/business-loans/line-of-credit/), [real estate loans](https://businessloanbroker.ai/business-loans/commercial-real-estate-loans/), acquisition and franchise loans. The lender reads your tax returns and asks whether profit covers the payment with room to spare, usually a [DSCR](https://businessloanbroker.ai/glossary/dscr/) of 1.25 or better. They are the cheapest money, typically 6% to 30% APR, and the slowest to close. Most banks decline businesses under two years old.

## Which financing is repaid from future revenue?

A [merchant cash advance](https://businessloanbroker.ai/business-loans/merchant-cash-advance/), [revenue based financing](https://businessloanbroker.ai/business-loans/revenue-based-financing/) and most [short term loans](https://businessloanbroker.ai/business-loans/short-term-loans/) are repaid as a slice of sales, daily, weekly or monthly. Approval depends on revenue volume rather than profit or credit, so they are the easiest to get and the most expensive: a factor rate of 1.1 to 1.5 often means 40% to over 100% APR. Use them for a short gap with a clear return, never for ongoing losses.

## Which financing is repaid from invoices and assets?

[Invoice factoring](https://businessloanbroker.ai/business-loans/invoice-factoring/) and [invoice financing](https://businessloanbroker.ai/business-loans/invoice-financing/) advance 70% to 90% of what your customers owe you. [Purchase order financing](https://businessloanbroker.ai/business-loans/purchase-order-financing/) pays your supplier for a confirmed order. [Equipment financing](https://businessloanbroker.ai/business-loans/equipment-financing/), [leasing](https://businessloanbroker.ai/business-loans/equipment-leasing/), [inventory financing](https://businessloanbroker.ai/business-loans/inventory-financing/) and [asset based lending](https://businessloanbroker.ai/business-loans/asset-based-lending/) borrow against something the lender can sell if you stop paying, so they approve younger businesses and weaker credit.

## Which financing is repaid from program proceeds or equity?

In Canada, [SR&ED and grant financing](https://businessloanbroker.ai/business-loans/sred-and-grant-financing/) advances money against a tax credit refund or a signed grant, and the program repays the lender. [Venture debt](https://businessloanbroker.ai/business-loans/venture-debt/) sits beside an equity round and is repaid from the next raise or from revenue. Apply for any product here, or ask your AI assistant to apply for you through our [MCP server](https://businessloanbroker.ai/agents/). One application reaches a lender in every category.

| Product | Typical amounts | Typical cost | Time to fund | Repaid from |
|---|---|---|---|---|
| Term loan | $25,000 to $5M | 7% to 30% APR | Days to 8 weeks | Operating cash flow |
| SBA 7(a) loan | Up to $5M | Prime plus 3% to 6.5% | 30 to 90 days | Operating cash flow |
| Line of credit | $10,000 to $1M | 8% to 60% APR | 1 to 10 days | Operating cash flow |
| Equipment financing | $10,000 to $5M | 6% to 25% APR | 1 to 10 days | Cash flow, secured by the equipment |
| Invoice factoring | 70% to 90% of invoices | 1% to 5% per month | 1 to 5 days | Your customers' payments |
| Merchant cash advance | $5,000 to $500,000 | Factor rate 1.1 to 1.5 | 1 to 3 days | Daily or weekly card and bank sales |
| Revenue based financing | $50,000 to $5M | 1.1x to 1.5x repayment cap | 1 to 4 weeks | 5% to 15% of monthly revenue |
| Commercial real estate loan | $250,000 to $20M | 6% to 12% APR | 30 to 90 days | Cash flow, secured by the property |

## Questions and answers
**What is the cheapest type of business loan?**

An SBA 7(a) or 504 loan, or a conventional bank term loan secured by real estate or equipment. These typically run 6% to 12% APR. They are also the slowest and the hardest to qualify for: most lenders want two years in business, good owner credit and profit that covers the payment with room to spare.

**What is the easiest business loan to get?**

A merchant cash advance or a short term loan. Approval leans on bank deposits, not credit or profit, and money can arrive in a day or two. The trade is cost: factor rates of 1.1 to 1.5 on short terms often mean an APR well above 40%, so treat them as a short bridge, not a long term fix.

**Can I get a business loan with no revenue?**

Rarely from a lender, since nothing is there to repay it. The realistic options are an SBA microloan, equipment financing where the equipment is the collateral, a business credit card based on your personal credit, or a grant. See our page on startup business loans for the honest list.

**Does applying here affect my credit?**

Submitting the application does not. Lenders that want a hard credit pull ask first, and most online lenders and SBA lenders start with a soft pull. We tell you which lender wants what before anything is pulled.

## Related
- [How to get a business loan](https://businessloanbroker.ai/guides/how-to-get-a-business-loan/)
- [Business loan requirements](https://businessloanbroker.ai/guides/business-loan-requirements/)
- [Compare business financing options](https://businessloanbroker.ai/compare/)
- [Business loan payment calculator](https://businessloanbroker.ai/tools/business-loan-calculator/)
- [Business loans for your situation](https://businessloanbroker.ai/situations/)

## Apply
Apply for the business: https://apply.businessloanbroker.ai/signup?utm_source=direct&utm_medium=organic&utm_content=md-business-loans
MCP server for AI agents: https://mcp.businessloanbroker.ai/mcp (docs: https://businessloanbroker.ai/agents/mcp/)