Type of funding | Structure | Application | Credit Score | Collateral | Business History | Speed of Receiving Funds | Repayment Terms |
---|
Bank loan | Fixed-term loan | Personal and business credit history, free cash flow, income statement, balance sheet | The higher the better | Yes, on secured loans | 3 years or more | 2 weeks or more | Monthly payments over the lifetime of the loan, typically 1-5 years |
---|
Credit card | Rotating credit | Personal and business credit history, business income, overall finances | The higher the better; this is the biggest single factor in getting a business credit card | No | 3 years or more | Can be days to weeks; you will receive a credit limit, rather than funds | Revolving loan with a monthly payment, usually 1%-2% of balance |
---|
Online lender | Cash advance/credit line | Varies, and relies more on proving business revenue | Medium-high credit, rolling terms based on credit score | No | 1-2 years | 1-7 days | 3-, 6-, 12- or 24-month terms; payments varying from daily to monthly; penalty for early repayment |
---|
Merchant cash advance | Cash advance | Varies, and relies more on proving business revenue | Low to none | No | 1 year | 1-7 days | Fixed percentage of revenue until advance is repaid |
---|
SBA loan | Fixed-term loan | Extensive, in-depth paperwork, personal and business documentation including detailed business history | The higher the better | Yes | 2 year | 1 month or more | Monthly payments over the lifetime of the loan |
---|
Crowdfunding | Crowdsourced funds | Meet platform rules; create campaign, marketing, social media and other factors to promote | Not relevant, although a history of success can be beneficial | No, but you may want to offer “rewards” to backers | Not relevant, although a history of success can be beneficial | Depends on length of campaign | No need for repayments, although you typically have to offer products or services in lieu of repayment |
---|
Peer-to-peer lending | Peer-to-peer | Good annual revenue, several years in business, good business pitch, personal credit history | The higher the better | No | 2 years or more | 4-8 days | Schedule varies, but anywhere between 6 months and 10 years |
---|