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Financing guideSBA loans offer the best terms for most small businesses: longer terms (10-25 years), lower rates (prime + 2-3%), partial government guarantee. The application is the slow part.
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Financing guide
Small Business Loans Guide · File.Business

Small business loans. Where to find capital, what it costs.

Most small businesses do not need or qualify for venture capital. They need a loan or line of credit to fund growth, equipment, real estate, or working capital. This guide covers the full small-business financing landscape: SBA programs, traditional bank loans, online lenders, equipment-specific financing, invoice factoring, and lines of credit. Including what each costs, who qualifies, and how long the application actually takes.

Cap table tools Specialty attorneys Not legal advice
Key facts

Start here.

Key fact
SBA 7(a)

Most common SBA loan. Up to $5M. Use for working capital, expansion, equipment, real estate. 10-25 year terms. Prime + 2-4%.

Key fact
SBA 504

For real estate and major equipment only. Up to $5.5M. 10-25 year terms. Fixed rates.

Key fact
SBA Microloan

Up to $50k. For very small businesses and underserved markets.

Key fact
Online lenders

OnDeck, Bluevine, Funding Circle, Kabbage. Faster than SBA (days vs months) but higher rates (8-99% APR).

Key fact
Line of credit

Revolving credit. Pay interest only on what you draw. Useful for working capital fluctuations.

In depth

The full picture.

01

SBA 7(a) loan

The default SBA loan. Used for almost anything: working capital, debt refinance, equipment, real estate, business acquisition, expansion. Loan amounts $50k-$5M. Terms: 10 years (working capital), 25 years (real estate). Rates: Prime + 2.25% to 4.75%. SBA guarantees 75-85% of the loan to the lender, reducing lender risk. Application takes 60-120 days. Down payment: 10-30% typical.

02

SBA 504 loan

For real estate and large equipment only. Three-party structure: bank lender 50%, CDC (Certified Development Company) 40%, borrower 10%. Loan up to $5.5M ($5M for manufacturing). Fixed rates over 10-25 years. Best for asset-heavy purchases.

03

SBA Microloan

Up to $50k. Distributed through nonprofit intermediaries. Higher rates than 7(a) but accessible to newer or smaller businesses. Good for first-time borrowers.

04

Traditional bank business loan

Term loans from banks without SBA guarantee. Faster than SBA. Lower amounts typically. Better rates than online lenders. Requires strong credit, time in business (typically 2+ years), and revenue.

05

Business line of credit

Revolving credit. Like a credit card but with higher limits and lower rates. Draw what you need, pay interest only on the drawn amount. Useful for inventory purchases, seasonal cash flow, working capital. Banks, SBA Express, and online lenders all offer.

06

Online business lenders

OnDeck, Bluevine, Funding Circle, Kapitus, Credibly, others. Application in minutes. Decision in 1-3 days. Funding in days. Rates: 8-99% APR (effective). Much faster than SBA, much more expensive. Good for short-term needs.

07

Equipment financing

Loan or lease secured by the equipment itself. The equipment is collateral, reducing risk for the lender. Lower rates than unsecured business loans. Used for vehicles, machinery, technology.

08

Invoice factoring

Sell outstanding invoices to a factor for immediate cash (typically 70-90% of invoice value). Factor collects from the customer. Useful for cash flow when customers pay slowly. Effective rates 10-60% annualized.

09

Revenue-based financing

Repayment as percentage of monthly revenue. Total repayment is a multiple of borrowed amount (1.3-2x typical). Pipe, Capchase, Stenn, Founderpath for SaaS. Clearco for ecommerce.

10

Business credit cards

Useful for small ongoing expenses + travel. Building business credit history. Rewards. APR 18-28%. Limits typically $5k-$50k for new businesses.

FAQ

Common questions.

What financing options does a small business have?
Common options include SBA loans, bank term loans and lines of credit, business credit cards, equipment financing, and, for startups, equity investment, each suited to different needs, stages, and credit profiles. We flag how your entity and credit foundation affect which options are realistic for you.
What is an SBA loan?
An SBA loan is a bank loan partially guaranteed by the Small Business Administration, which reduces the lender's risk and can mean better terms and lower down payments than a conventional loan, though the application is more involved. We flag what lenders look for so your business is positioned before you apply.
What do lenders look for?
Typically your business and personal credit, time in business, revenue and cash flow, and often collateral or a personal guarantee, since they are assessing whether you can repay. Building business credit and clean records strengthens your position. We flag how to prepare so an application is not dead on arrival.
Does my business need its own credit to borrow?
It helps significantly: separate business credit can improve loan terms and reduce reliance on your personal credit, and lenders increasingly evaluate business credit on its own. We flag how forming an entity and reporting tradelines build the credit profile that makes borrowing easier.
How does my entity affect borrowing?
A formed entity with its own EIN and bank account lets you build business credit and present as a real business to lenders, while an unformed sole proprietor leans entirely on personal credit. We keep your entity and records organized so your business can build its own borrowing profile.
Should I use debt or raise equity?
Debt keeps ownership but must be repaid regardless of results, while equity brings capital without repayment but gives up ownership and control, so the right choice depends on your business model and growth plans. We flag the trade-offs so financing fits your situation, not just what is available.
What is a business line of credit?
A revolving credit facility you draw on as needed and repay, useful for managing cash flow and short-term needs rather than a one-time purchase, and often easier to qualify for as your business establishes credit. We flag how it fits your financing mix so you use the right tool for the need.
How do I prepare my business to qualify for financing?
By forming the entity, separating business finances, keeping clean books, and building business credit over time, so that when you apply, the business presents as organized and creditworthy. We keep your entity and records organized so financing readiness is built in, not scrambled for later.
Can File.Business help me get financing-ready?
We form the entity, obtain the EIN, help separate business finances, and support building business credit, so your business is positioned to qualify for financing, and we flag which options fit your stage, though the lending itself runs through banks and lenders.

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Entity, EIN, banking, cap table, contracts, books. Everything funders, lenders, and acquirers want to see.

This guide is educational. Funding decisions require professional advice from licensed attorneys and CPAs.

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