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Which kind of funding
fits the job?
Side-by-side comparisons of common business financing, each with a worked cost example on the same amount.
SBA loan vs term loan
An SBA 7(a) loan usually costs less and spreads payments over more years, but takes longer and asks for more paperwork. A conventional or online term loan can fund in days with lighter documentation, at a higher rate and over a shorter term. If you can wait and qualify, SBA is often cheaper; if timing matters, a term loan may fit better.
Read the comparison Line of credit · Merchant cash advanceBusiness line of credit vs merchant cash advance
A line of credit lets you draw what you need and pay interest only on what you use, usually at a much lower annual cost. A merchant cash advance is faster and easier to qualify for, but you repay a fixed amount set by a factor rate through daily or weekly payments — often a far higher cost per year. If you can qualify for a line, it is usually the cheaper way to cover short-term gaps.
Read the comparison Merchant cash advance · Term loanMerchant cash advance vs term loan
A merchant cash advance funds fast and leans on your sales, not your credit, but its factor rate usually makes it far more expensive per year and its daily payments take cash out quickly. A term loan takes a little longer and asks more of your credit and financials, but spreads a lower cost over predictable payments. Use an advance only when speed or eligibility leaves no better option.
Read the comparison Invoice factoring · Line of creditInvoice factoring vs business line of credit
Invoice factoring sells your unpaid invoices for cash now, and approval leans on your customers' credit more than yours — useful for fast-growing or newer businesses. A line of credit keeps you in control of collections and is usually cheaper, but you need the credit history and revenue to qualify. If you qualify for a line, it is often the lower-cost option; factoring fills the gap when you don't.
Read the comparison Factor rate · Interest rateFactor rate vs interest rate
A factor rate is a multiplier that fixes the total you repay — 1.30 on $50,000 means repaying $65,000, however fast. An interest rate charges a percentage per year on the balance you still owe, so cost depends on time. Because a factor rate ignores time, a short advance with a modest-looking factor can cost far more per year than a loan with a higher-looking rate.
Read the comparisonComparisons and examples are for education only, use illustrative terms, and are not an offer or commitment to lend. Actual rates, fees and terms depend on each provider’s review. ScaleKit Financing is operated by Arch Ventures LLC and is not a lender.