All Lendio Loan Types — Compare 8 Business Financing Options

A business term loan provides a lump sum of capital upfront, which you repay over a fixed period with regular payments (typically monthly). Interest rates can be fixed or variable. Term loans are ideal for specific, one-time business investments where you know the exact amount needed.

SBA loans are partially guaranteed by the U.S. Small Business Administration, allowing lenders to offer significantly lower interest rates and longer repayment terms than conventional loans. The trade-off is a more extensive application and underwriting process. SBA 7(a) loans are the most common; SBA 504 loans are designed for major fixed assets like commercial real estate and equipment.

A business line of credit works like a business credit card: you're approved for a maximum credit limit, and you can draw funds up to that limit whenever you need them. You only pay interest on the amount you've actually borrowed. As you repay, your available credit replenishes — making it a flexible, ongoing financing tool.

Equipment financing loans are specifically designed to purchase business equipment — machinery, vehicles, technology, medical devices, restaurant equipment, and more. Because the equipment itself serves as collateral, lenders can offer more accessible approval terms and competitive rates. You own the equipment immediately while paying it down over time.

Getting capital for a brand-new business is notoriously difficult — but Lendio's network includes lenders who specialize in startup financing. Options for newer businesses typically include personal loans for business use, microloans, business credit cards, and certain short-term loan products. For startups, personal credit scores and business plans carry more weight than business history.

Invoice factoring (also called accounts receivable financing) allows you to sell your outstanding invoices to a factoring company at a small discount in exchange for immediate cash. This is ideal for B2B businesses that regularly invoice clients with 30, 60, or 90-day payment terms. Approval is based largely on the creditworthiness of your customers, not just your own business credit.

A merchant cash advance (MCA) provides a lump sum upfront in exchange for a percentage of your future daily credit and debit card sales. Because repayment is tied to your revenue, payments naturally decrease during slow periods. MCAs have the fastest approval and funding times of any product, but are also typically the most expensive — best used as a short-term bridge.

Business acquisition loans are designed to finance the purchase of an existing business, a franchise, or a commercial property associated with a business purchase. These are often structured as SBA 7(a) loans due to their large amounts and long terms. The purchased business's assets, cash flow, and goodwill serve as collateral alongside personal guarantees from the buyer.