Business Lending Options Compared: Costs, Terms, Guarantees

No product is good or bad in the abstract. Each fits some needs and businesses better than others. This table is a starting map; terms vary widely by lender, and nothing here is an offer.

The comparison

Option	How it's priced	Typical term	Collateral and guarantee	Speed	Tends to suit
Bank term loan	Interest rate (fixed or variable) plus fees	Several years	Often collateral; owners usually guarantee	Weeks	Established, profitable businesses
Bank line of credit	Interest on drawn balance; annual or unused fees	Renewed every year or few	Often receivables and inventory; guarantee	Weeks	Repeating timing gaps
SBA 7(a)	Rate capped by SBA (variable: base + 3% to 6.5% by size); guaranty fees	Up to 10 years; 25 for real estate	Collateral as available; 20%+ owners guarantee	Weeks to months	Working capital, equipment, acquisitions, real estate
SBA Express	As 7(a); 50% SBA guaranty	Lines up to 10 years	Lender policy above $50,000	Faster than standard 7(a)	Up to $500,000, quicker needs
SBA 504	Fixed rate on CDC portion tied to 10-year Treasuries; fees about 3%	10, 20 or 25 years	The property or equipment; guarantees	Months	Buildings, land, long-life equipment
SBA microloan	Set by nonprofit intermediary	Up to 7 years	Varies	Weeks	Up to $50,000; start-ups and small needs
CDFI loan	Varies by fund	Varies	Varies; often flexible	Weeks	Underserved and younger businesses
Equipment loan or lease	Interest or lease rate	Tied to equipment life	The equipment; often a guarantee	Days to weeks	Machines, vehicles, technology
Business credit card	Interest if not paid in full; fees	Revolving	Usually personal guarantee	Days	Small, short purchases paid in full
Trade credit	Free within terms; skipped discounts cost	15 to 60 days	Usually none; sometimes a guarantee on the application	Varies	Inventory and supplies
Invoice factoring	Discount fee per invoice or period plus fees	Until customer pays	Receivables; recourse common	Days	B2B sellers with slow-paying customers
Online term loan	Interest rate or fixed fee; often short	Months to a few years	Guarantee common; lien	Days	Faster needs; compare APR carefully
Revenue-based financing	Fixed payback cap from a revenue share	Until cap is reached	Varies; UCC lien common	Days to weeks	Recurring revenue, healthy margins
Merchant cash advance	Factor rate; APR often very high	Months, varies with sales	Performance or personal guarantee common; UCC lien	Days	Emergencies after other options fail

Reading the table

"Typical" is not a promise. Lenders set their own terms within any program rules.
APR moves with speed for anything priced per deal (factor rates, payback caps, flat fees). See MCAs and factor rates.
Liens travel. A blanket UCC lien from one provider can block another lender. Ask what each lien covers.
Guarantees add up. Keep track of every guarantee you sign; see personal guarantees.

Program limits worth knowing (November 2026)

Standard 7(a): up to $5 million. 7(a) Small: up to $350,000. SBA Express: up to $500,000.
504: SBA's 504 page lists $5.5 million as the maximum 504 loan; its July 2026 announcement describes up to $5 million through 504 within a combined $10 million 7(a) and 504 limit.
Microloans: up to $50,000, average about $13,000, up to 7 years.

Disclosure rights

Several states, including California and New York, require many non-bank providers, including factoring and MCA companies, to disclose terms such as APR before you sign. Wherever you are, ask for the amount you'll receive, total repayment, every fee and an APR, in writing.

Sources

Checked November 9, 2026. Program rules and scoring models change; the source is the authority.