How do business loans work?
Business loans work like this: a lender gives your business a lump sum, and you repay it over a set term, principal plus interest, usually in fixed monthly or weekly payments. The rate you pay depends on your credit, revenue, time in business, and which lender you choose. That last part matters more than most owners realize: the same business can be quoted 7% by one lender and 40% by another. Understanding the mechanics is how you avoid overpaying, and matching to the right lender is exactly what Quordx Capital was built to do.
This guide is part of our full library on Business Loans. Start there for the complete lineup, then come back for the deep dive on your situation.
Last updated · Reviewed by Cody Dreis
50+ Lenders|Funding in as little as 24 hours
The Mechanics: Principal, Interest, Term, and Repayment
Every business loan has four moving parts. Principal is the amount you borrow: anywhere from $5K working capital loans to $5M+ SBA and equipment deals. Term is the repayment window, typically 1-5 years on a standard term loan, up to 10-25 years on SBA products. Repayment is usually a fixed monthly payment, though short-term lenders often debit weekly or daily.
Lenders price all of this on risk. Strong credit, 2+ years in business, and clean bank statements get bank pricing. Newer businesses or challenged credit get alternative-lender pricing: faster money, higher cost. Some products work differently: a line of credit charges interest only on what you draw, and a merchant cash advance isn't a loan at all but a purchase of future receivables priced with a factor rate.
The Main Types of Business Loans
Business term loans: $10K-$500K+ repaid over 1-5 years with fixed payments. Best for a single, defined investment.
Business lines of credit: $10K-$250K+ you can draw, repay, and redraw. Best for ongoing or unpredictable needs.
SBA loans: government-guaranteed loans up to $5M with rates currently around 10.5%-14% on 7(a). Best for the lowest cost if you can qualify and wait.
Equipment financing: the equipment secures the loan, which is why approval is easier. Best for vehicles, machinery, and tools.
How Quordx Capital Works
Instead of guessing which lender fits you, you complete one 5-minute application and upload documents like bank statements and your latest tax return. Our AI scores your profile against 50+ vetted lenders and surfaces the 3-7 most likely to approve you. Decisions typically return within 24-48 hours; funds arrive in 3-7 business days, sometimes 1-3.
What to Expect
Expect real numbers, not teaser rates: every fee and term is disclosed before you sign anything. The biggest worry we hear is cost: rates vary widely by lender and credit, which is exactly why comparing matched offers beats taking the first yes. Quordx Capital is free to use, there's no obligation to accept any offer, and if no product genuinely fits, we'll tell you that too.
Apply for Funding
No obligation · Initial inquiry doesn't impact credit · Takes about 10 minutes
Written by
Cody Dreis
Founder, Quordx Capital
Read full bio
Related articles
More on this topic from the Quordx Capital library.
Keep exploring business loans
Important Disclosures
Quordx Capital is a business funding broker, not a lender. We facilitate introductions between U.S. small and medium-sized businesses and lenders or capital providers in our network. All credit decisions, funding amounts, rates, fees, repayment terms, and timelines are determined solely by individual lenders based on their own underwriting criteria.
Funding figures and timelines shown on this page are illustrative and represent ranges within our lender network, they are not guarantees and individual outcomes may vary based on business profile, industry, time in business, revenue, credit history, and lender availability. Not all applicants qualify for every product.
The initial inquiry does not impact your personal credit score. Some lenders may perform a hard credit pull during underwriting; Quordx only authorizes such checks with your specific consent for the lender presenting an offer. Applicants are protected under the Equal Credit Opportunity Act (ECOA) from discrimination based on race, color, religion, national origin, sex, marital status, age, or because all or part of an applicant's income derives from any public-assistance program.
This Site is intended for commercial, business-purpose financing for U.S. businesses only. Not available for consumer loans, residential mortgages, or owner-occupied real estate. Quordx may receive compensation from lenders when applications result in funded transactions. This does not change the rate, fee, or terms offered to you. See our Advertiser Disclosure for details.
By submitting an application or contact information, you consent to be contacted by Quordx and its lending partners via phone, text, and email, including by automated means, regarding your funding inquiry. Consent is not a condition of receiving funding. Message and data rates may apply. Reply STOP to opt out. See our Privacy Policy and Terms of Service.