Funding 101
Foundational explainers on how small business funding works. Start here to understand the differences between term loans, revenue-based funding, lines of credit, and SBA programs.
What you'll learn
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9 guides
On the same $50K need, an MCA almost always costs more in dollars than a term loan, but the right answer depends on speed, credit, and how fast the capital pays itself back.
Read the guideRevenue is the underwriting driver, pricing uses a factor rate, and repayment comes out of daily or weekly ACH or a sales holdback, here is how RBF actually works in practice.
Read the guideDSCR is operating cash flow divided by total debt service, SBA wants 1.15–1.25, banks want 1.25+, and online lenders are more flexible. Here is how to calculate yours and what lenders actually do with the number.
Read the guideLines of credit let you draw and repay repeatedly, and come in three flavors, bank traditional, online revolving, and asset-backed, each priced and underwritten differently.
Read the guideFinancing builds ownership and balance-sheet assets; leasing keeps cash free and shifts obsolescence risk. Tax treatment also differs, Section 179 on financed equipment vs operating-lease expense.
Read the guide7(a) is the broad working-capital and acquisition program (up to $5M, flexible use). 504 is fixed-asset and real-estate only, delivered through a CDC partnership.
Read the guideFactor rates and APRs answer different questions. Here’s how to convert between them and avoid overpaying for capital.
Read the guideWhen to choose flexible daily repayment from revenue, and when a fixed monthly term loan is the cheaper, cleaner option.
Read the guideMost business owners sign funding agreements without fully understanding them. Here are the six numbers that actually determine your cost.
Read the guideOther categories
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