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 |