Business Funding Options Compared: Rates, Speed & Requirements (2026)
Seven ways to fund your business — compared by cost, speed, amounts, and who they actually work for. Data reflects 2026 industry averages.
Every Funding Type at a Glance
| Funding Type | Typical Cost (2026) | Amounts | Speed to Fund | Repayment | Min. Requirements |
|---|---|---|---|---|---|
| SBA 7(a) Loan SlowestLowest cost | 9–11.5% APR Prime 6.75% + 2.25–4.75% | Up to $5M | 30–90 days | Up to 10 yrs (25 yrs real estate) | 650+ credit · 2+ yrs in business · solid financials |
| Business Line of Credit FastLow–moderate | 8–35% APR 8–14% banks · 10–35% online | $10K – $500K+ | 1–7 days | Revolving — draw, repay, redraw | 600+ credit · 1+ yr in business · $120K+/yr revenue |
| Online Term Loan FastModerate | 14–45% APR Banks ~7–11% but take weeks | $10K – $500K | 1–5 days | 6 months – 5 years | 600+ credit · 1+ yr in business · $100K+/yr revenue |
| Equipment Financing FastLow–moderate | 7.5–25% APR Strong credit lands 8–18% | 80–100% of equipment cost | 2–10 days | 2–7 years | 580+ credit · startups OK with strong credit |
| Revenue-Based Financing FastModerate–high | 1.2–1.5× repayment cap Repay 5–15% of monthly revenue | $15K – $2M+ (often 3–4× monthly revenue) | 1–14 days | Until cap is repaid (typically 1–5 yrs) | 6+ mo in business · $15K+/mo consistent revenue |
| Revenue Advance (MCA) FastestHighest cost | 1.20–1.49 factor rate Equivalent APR often 40%+ | $5K – $2M (≈ up to ~1× monthly revenue) | 24–72 hours | 3–24 months via % of daily sales | 500+ credit OK · 6+ mo in business · $15K+/mo revenue |
| Invoice Factoring FastestModerate | 1–5% fee per month Typical: 1.5–3.5%/mo of invoice | 70–95% of invoice value advanced | 24–72 hours | Per invoice — settles when customer pays (30–90 days) | B2B/government invoices · your customers' credit matters, not yours |
Which Business Funding Option Is Right for You?
If you need the money in 24–72 hours: revenue advances (MCAs) and invoice factoring are the only realistic options. Both underwrite off deposits or receivables, not credit, and both accept sub-600 scores. MCAs are the most expensive mainstream product — reserve them for opportunities where speed genuinely beats cost.
If you want the cheapest possible capital: SBA 7(a) is the answer for any business that can meet the 650+ credit / 2+ years in business bar. Expect a 30–90 day process and heavy documentation, but rates run 9–11.5% APR (vs. 14–45% on the online market) and terms stretch to 10 years working-capital / 25 years for real estate.
If your credit is challenged: factoring is almost always your best first move if you’re B2B — approval depends on your customers, not you. If you’re B2C, revenue-based financing and MCAs are the next steps up. Equipment financing works down to 580 because the asset secures the loan.
If you invoice other businesses on net-30 to net-90 terms: factoring almost always wins on cost-per-dollar-of-cash-freed, and it scales with your sales instead of adding a fixed monthly payment. Trucking, staffing, construction subs, wholesale, and manufacturing all lean heavily on factoring for exactly this reason.
SBA Loan vs. Term Loan vs. Line of Credit: Key Differences
These three products cover about 80% of small-business borrowing, and they solve very different problems.
SBA 7(a) is the workhorse for defined, large, long-payback investments — buying a competitor, acquiring commercial real estate, refinancing several high-cost loans into one, or funding a multi-year expansion. It’s slow (30–90 days), paperwork-heavy, and requires strong credit + 2+ years of financials, but the rate (9–11.5% APR) and term (up to 25 years) are unbeatable.
A conventional term loan — bank or online — is best for a specific, one-time investment with a knowable payback: a machine, an inventory buy, a marketing push, a renovation. You take a lump sum, you pay it back on a fixed schedule (weekly, monthly), and it’s over. Bank term loans price around 7–12% APR but take 2–4 weeks. Online term loans fund in 1–5 days but price at 14–45% APR.
A line of credit is for uneven or unpredictable cash needs — payroll gaps, seasonal dips, surprise expenses, opportunistic inventory buys. You don’t pay a dime until you draw, and once you repay, the credit is available again. Rates run 8–14% at banks and 10–35% online. If you can carry only one funding product, a line of credit is usually the highest-utility choice; if you can carry two, pair a line of credit with an SBA loan or term loan for planned investments.
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Business Funding Comparison FAQs
What is the cheapest type of business funding?
SBA 7(a) loans are the cheapest capital available to most small businesses, currently running about 9–11.5% APR (Prime 6.75% plus an SBA-capped spread of 2.25–4.75%). Bank term loans come in second at roughly 7–11% APR for well-qualified borrowers, followed by equipment financing at 7.5–25% APR. The tradeoff for cheap money is time: SBA loans take 30–90 days to fund and bank loans take 2–4 weeks.
What's the fastest way to fund a business?
Revenue advances (MCAs) and invoice factoring are the fastest — funds hit your account in 24–72 hours in most cases. Online lines of credit and term loans are close behind at 1–7 days. If you need money faster than a week, cost-effective options like SBA and bank loans are off the table by definition.
SBA loan vs term loan — which is better?
SBA 7(a) loans beat conventional term loans on rate and term length (10-year working-capital, 25-year real estate). Conventional online term loans beat SBA on speed (days vs months) and paperwork. If you can wait 60–90 days and you meet 650+ credit / 2+ years in business, take the SBA loan every time. If you need the money now or don't meet SBA criteria, an online term loan is the natural fallback.
What funding can I get with bad credit?
Merchant cash advances accept scores as low as 500 with 6+ months in business and $15K+/month in revenue. Invoice factoring often ignores your personal credit entirely — approval depends on your customers' ability to pay. Equipment financing works down to about 580 because the equipment secures the loan. Revenue-based financing typically wants 550+ but weights revenue heavily.
How much does business funding cost in 2026?
As of 2026, expect roughly: SBA 7(a) 9–11.5% APR, bank term loans 7–12% APR, online term loans 14–45% APR, lines of credit 8–14% at banks / 10–35% online, equipment financing 7.5–25% APR, MCAs 1.20–1.49 factor rate (equivalent APR often 40%+), invoice factoring 1–5% per month of invoice value, and revenue-based financing 1.2–1.5× total repayment cap.
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Use the Business Funding CalculatorDisclaimer: Figures shown are 2026 industry-average ranges compiled from published lender and market data, provided for education only. They are not an offer, commitment, or guarantee of financing, and are not financial advice. Actual rates, amounts, fees, and terms are set by individual lenders based on your full business and credit profile and may differ from the ranges shown. SBA 7(a) rates reflect the current Prime rate (6.75%) plus SBA-capped spreads. Merchant cash advances and invoice factoring are priced with factor rates/fees rather than interest; equivalent APRs can be substantially higher than loan APRs. Quordx Capital is a commercial finance broker, not a lender, and is compensated by lenders — borrowers are never charged a fee by Quordx. Products may not be available in all states or industries.