4 posts tagged with "financing"

Merchant cash advances (MCAs) are everywhere in 2025. If your business accepts card payments, you have probably been pitched “fast funding in 24 hours.” The offer sounds painless: you receive a lump sum today and repay it automatically as a percentage of future card sales. No collateral, no fixed payment. What could go wrong?

Quite a lot, as it turns out. MCAs are one of the most expensive ways to buy working capital. They are also one of the least transparent. This guide walks through how an MCA really works, how to model the cost inside Beancount, and the questions to ask before you sign.

How Merchant Cash Advances Really Work​

MCAs are marketed as “not loans,” which means they avoid state usury limits. Instead of quoting an interest rate, providers quote a factor rate. An 1.35 factor rate on an $80,000 advance means you must repay$108,000 — regardless of how quickly the advance is satisfied. When you translate that into an annual percentage rate, the true cost often lands between 40% and 120% APR.

Modeling the True Cost in Beancount​

A few ledger entries can make the economics painfully clear:

2025-09-13 * "Merchant cash advance funding"
  Assets:Bank:Operating                80,000.00 USD
  Liabilities:MCA:Provider            -108,000.00 USD
  Expenses:Financing:MCA               28,000.00 USD

This entry books the entire obligation on day one and recognizes the fee as an expense. From there, post the daily withdrawals against the liability account. When you run a balance report, you see:

• Outstanding liability: how much of the $108,000 you still owe.
• Effective APR: use a query or Jupyter notebook to compare the internal rate of return on the cash flows versus a bank line or SBA loan.
• Cash flow impact: Beancount’s bal command reveals how the holdback squeezes your operating account during slow months.

Because MCAs withdraw a percentage of revenue, your payback period is uncertain. Plug realistic revenue scenarios into a beancount-query or pivot report to see how long the liability lingers at different sales levels.

Warning Signs Before You Sign​

1. Factor rate above 1.3× – Anything higher means you are effectively paying triple-digit APR once you normalize for the short repayment window.
2. Daily or weekly reconciliation – More frequent draws make it harder to manage cash, especially if you also have payroll or rent hitting weekly.
3. Personal guarantee clauses – Even though MCAs are framed as revenue-based, many contracts still pull in personal guarantees or blanket liens.
4. Stacking allowances – Some providers allow or even encourage multiple advances at once. That is a recipe for a cash crunch spiral.
5. Contract opacity – If the provider cannot produce a sample repayment schedule or refuses to disclose the total dollar cost, walk away.

Smarter Alternatives to Evaluate First​

Each of these options has documentation and underwriting, but the effective APR is often half (or less) of an MCA. Use Beancount to build pro forma cash flow statements so you can compare how different products impact your runway and margins.

Using Beancount to Stay in Control​

1. Track every offer – Create a Liabilities:Financing:Offers account and record quotes as metadata. You will build a data set of factor rates, fees, and terms over time.
2. Simulate repayments – Use beancount-query or a Jupyter notebook to simulate daily holdbacks versus fixed monthly payments.
3. Tag revenue volatility – Apply Beancount tags to transactions so you can quickly generate rolling revenue averages. Share those reports with potential lenders to strengthen your case for lower-cost credit.
4. Automate alerts – Pair Beancount with bean-report or custom scripts so you get notified when the MCA liability balance exceeds a predefined threshold.

Beancount makes it easy to audit the cost of capital. When the numbers live in plain text, you and your advisors can push them into version control, run scenarios, and avoid being surprised by “gotcha” fees.

Bottom Line​

Merchant cash advances are best treated as an emergency-only tool. If you are facing a short-term crunch and every other option is closed, they can buy time — but the trade-off is steep. Before accepting an offer, model the cash flows inside Beancount, review the contract with counsel, and shop alternatives that preserve more of your hard-earned revenue.

Need help modeling scenarios or setting up reporting? Our team can help you spin up a Beancount ledger, automate data imports, and build dashboards that keep financing decisions transparent.

Next steps:

• Clone our Beancount business template to jump-start your ledger.
• Book a session with our onboarding team to review financing scenarios.
• Subscribe to the newsletter for more plain-text accounting workflows.

Staying disciplined with data will help you grow on your terms — without mortgaging tomorrow’s revenue at today’s desperation rates.

Inclusive capital is easier to access when you know which lenders actively court underestimated founders and what documentation proves you are ready. This guide highlights nine minority-friendly funding products available in 2025, why they matter, and how to keep every requirement at your fingertips inside Beancount.

TL;DR — Match the Loan to Your Milestone​

• Launch or early traction: Start with an SBA Community Advantage 7(a) loan or a CDFI microloan that layers in technical assistance.
• Buying equipment or property: Look to the SBA 504 structure or mission-driven equipment financing with fixed collateral.
• Bridging cash gaps: Pair a minority depository institution (MDI) line of credit with transparent invoice financing for seasonal dips.
• Rural and agricultural plays: The USDA Business & Industry guarantee expands access for operators outside major metros.
• Rapid growth with recurring revenue: Inclusive revenue-based financing programs move fast without diluting ownership.

1. SBA Community Advantage 7(a)​

• Best for: Minority-owned firms seeking $50k–$350k with advisory support.
• Typical amounts & rates: Up to $350k. Interest = Prime + 6% maximum in 2025. Terms up to 10 years for working capital.
• Qualification snapshot: 51%+ ownership by socially or economically disadvantaged individuals, FICO 640+, detailed projections, and ability to show community impact.
• How to capture it in Beancount: Use Liabilities:Loans:SBA:CommunityAdvantage and schedule Expenses:Interest:SBA postings monthly. Attach projections and cash-flow statements as Beancount documents for every draw request.

2. SBA Microloan Program​

• Best for: New founders with under two years of operating history or limited collateral.
• Typical amounts & rates: $500–$50k at 8%–13% interest, repayment terms up to six years.
• Qualification snapshot: Business plan, personal guarantee, no recent bankruptcies, and participation in technical assistance with the intermediary.
• Beancount workflow: Track disbursements under Liabilities:Loans:SBA:Microloan. Use custom metadata (e.g., advisor:"Business Impact NW") to log coaching sessions and compliance deadlines.

3. SBA 504 Loan (CDC/504)​

• Best for: Purchasing owner-occupied real estate or heavy machinery with long amortization.
• Typical amounts & rates: Projects up to $5.5M. CDC portion fixed in the mid-6% range (May 2025 debentures). Bank portion negotiable, often Prime + 2%–3%.
• Qualification snapshot: 10% borrower equity, job-creation targets, tangible net worth under $20M, and average net income under$6.5M.
• Beancount workflow: Model the two-loan structure with Liabilities:Loans:SBA:504:CDC and Liabilities:Loans:SBA:504:Bank. Schedule depreciation entries with Assets:Fixed:Buildings or Assets:Fixed:Equipment to align with loan amortization.

4. CDFI Term Loans​

• Best for: Neighborhood-based companies needing flexible underwriting and mentorship.
• Typical amounts & rates: $25k–$1M at single- or low-double-digit APRs with longer interest-only periods.
• Qualification snapshot: Demonstrated community benefit, workable repayment plan, and willingness to engage in quarterly check-ins.
• Beancount workflow: Tag transactions with project:"CDFI-term-loan" and attach meeting notes to stay audit-ready. Use Beancount’s balance reports to share real-time debt coverage ratios with your loan officer.

5. Minority Depository Institution (MDI) Lines of Credit​

• Best for: Founders needing recurring working capital and a relationship bank that understands cultural nuance.
• Typical amounts & rates: $25k–$500k with variable APR tied to Prime + 2%–5%, annual review.
• Qualification snapshot: 12+ months of revenue, clean business checking history, and updated aging reports.
• Beancount workflow: Create a Liabilities:LinesOfCredit:MDI account. Reconcile weekly by importing bank feeds into Beancount, and track covenant tests via custom queries.

6. Equipment Financing with Inclusive Lenders​

• Best for: Trades, creative studios, and manufacturing shops scaling production assets.
• Typical amounts & rates: $10k–$1M, fixed rates starting near 7.5% for qualified borrowers with collateral.
• Qualification snapshot: Equipment quotes, 1–2 years of business tax returns, and proof of minority ownership.
• Beancount workflow: Capitalize purchases under Assets:Fixed:Equipment and schedule automatic postings to Liabilities:Loans:Equipment. Use Beancount’s amortization plugins to forecast future payment impact on cash.

7. State & Local Partnership Loan Funds​

• Best for: Entrepreneurs tapping regional accelerators, procurement programs, or municipal supplier diversity goals.
• Typical amounts & rates: $25k–$250k with interest buy-downs, sometimes 0% for the first 12 months.
• Qualification snapshot: Certification in a minority business enterprise (MBE) program, local job commitments, and readiness to leverage state-backed guarantees.
• Beancount workflow: Store certification documents alongside your ledger (e.g., documents/MBE-certificate.pdf) and link to relevant transactions with Beancount’s document directive so renewals never slip.

8. Revenue-Based Financing (RBF) with Inclusive Investors​

• Best for: Digital and subscription businesses with steady monthly recurring revenue (MRR) wanting non-dilutive capital.
• Typical amounts & rates: $50k–$2M, repaid as 3%–8% of monthly gross revenue until 1.3x–1.6x payback is met.
• Qualification snapshot: $20k+ MRR, 12+ months of revenue history, and cohorts showing retention consistency.
• Beancount workflow: Track remittances under Expenses:RevenueShare:RBF. Use revenue tags in Beancount to prove cohort stability and to forecast when the payback multiple will complete.

9. Purchase Order & Invoice Financing​

• Best for: Product companies or agencies covering supplier costs ahead of receivables.
• Typical amounts & rates: Advances up to 90% of invoice value with 2%–4% fees per 30-day period.
• Qualification snapshot: Creditworthy end customer, verifiable purchase orders, and evidence that your business can fulfill on time.
• Beancount workflow: Create Assets:Receivables:Financed to track advanced invoices separately. Reconcile when the end client pays and the financier remits the reserve.

Build Your Lender-Ready Data Room in Beancount​

1. Daily bank reconciliation: Automate imports from your minority-friendly bank into Beancount so cash positions always reflect reality.
2. Segmented chart of accounts: Separate core operations from grant proceeds or equity to prove debt-service coverage at a glance.
3. Attach documents inline: Store tax returns, licenses, and insurance certificates in a documents/ folder and link them to the corresponding Beancount entries.
4. Run monthly lender packets: Use bean-report income_statement and bean-report cashflow to export PDFs for your loan officer before every review.

Combine Multiple Programs Strategically​

• Stack responsibly: Pair an SBA Community Advantage loan with a state-backed microloan to cover gaps, but maintain a debt-service coverage ratio (DSCR) above 1.25x in Beancount.
• Protect cash flow: When adding invoice financing, model best- and worst-case repayment timelines so you can keep payroll covered.
• Invest in advisory networks: Many CDFIs and MDIs bundle mentorship; log every session in Beancount metadata to track the ROI of the relationship.

Next Steps​

1. Shortlist three lenders that align with your sector and geography.
2. Audit your ledger for clean categorization, reconciled balances, and clearly labeled supporting documents.
3. Book a prep call with your local SBDC, MBDA center, or CDFI coach to review your Beancount exports before you submit an application.

The more organized your books, the more confidently you can negotiate rates, timelines, and covenants. Beancount keeps minority-owned founders in control of their narratives—and their numbers—when it matters most.

Plain-text accounting can do more than keep your ledger clean—it can make your company credit ready. Whether you are chasing a new product launch or smoothing out seasonal cash flow, lenders reward founders who show meticulous records, reliable forecasting, and thoughtful cash planning. This guide breaks down how to use Beancount to prepare, what funding options to consider, and how to run the loan process without derailing your week.

Step 1: Quantify the Need and the Payback Plan​

Lenders want to see two stories: why you need capital and how you will repay it.

1. Size the project. Build a Beancount query that models the cash required, the expected timing, and the revenue impact. A simple balance report on your project accounts plus a forecast of Accounts Receivable aging helps show the gap the loan will cover.
2. Stress-test cash flow. Use historical Beancount data to calculate debt service coverage ratio (DSCR = Net Operating Income ÷ Total Debt Service). Most banks want to see DSCR ≥ 1.25 on a forward-looking basis.
3. Define the exit. If you plan to refinance, sell, or pay down the balance with future profits, document that inside your loan memo. Banks love a plan that can be cross-checked in your ledger.

Founder tip: Export a Beancount-generated cash flow forecast to CSV and attach it to your application packet. It shows discipline and saves underwriters work.

Step 2: Build a Documentation Packet Straight from Beancount​

A clean documentation packet speeds up underwriting. Create a folder that includes:

• Trailing 24 months of financial statements. Use Beancount reports for the balance sheet, income statement, and cash flow statement.
• Year-to-date ledger detail. A print statement filtered by date and account demonstrates transparency.
• Tax returns and filed sales tax reports. Tie your ledger totals to each filing to prove accuracy.
• Owner equity schedule and capitalization table. Lenders scrutinize how much of your own capital is at risk.
• Accounts Receivable and Accounts Payable aging. Export your aging report to spotlight collection discipline.
• Business plan addendum. A concise memo summarizing strategy, market traction, and why the loan will succeed.

Store the packet in a shared drive and label each file using a consistent naming convention (for example: 2024-12-balance-sheet.pdf). When an underwriter asks for supporting detail, you can respond within minutes.

Step 3: Match the Loan Type to the Business Use Case​

Choosing the wrong product is the fastest way to overpay. Evaluate these common options:

Term Loan (Bank or SBA 7(a))​

• Best when: You need a multi-year lump sum for hiring, inventory, or equipment.
• Loan size & rate: $50k–$5M with terms of 5–10 years; rates typically track prime + 2.75%–4.75%.
• Beancount prep: Tag the capital expense accounts and build an amortization schedule to show monthly impact.

SBA 504 Loan​

• Best when: Funding owner-occupied real estate or heavy equipment with long repayment horizons.
• Loan size & rate: Up to $5.5M with fixed rates based on 10-year Treasury yields plus a modest spread.
• Beancount prep: Model blended payments (bank + Certified Development Company portions) to show total debt service.

Business Line of Credit​

• Best when: You want flexible working capital for payroll gaps or large receivables.
• Loan size & rate: Revolving limits from $20k–$500k; interest accrues only on the drawn balance.
• Beancount prep: Set up a Liabilities:LineOfCredit account and reconcile draws weekly.

Equipment Financing​

• Best when: The asset itself serves as collateral and you need rapid approval.
• Loan size & rate: Covers 80%–100% of the equipment cost; terms 3–7 years.
• Beancount prep: Track depreciation schedules alongside liability amortization.

Invoice Financing or Factoring​

• Best when: Cash is tied up in slow-paying enterprise clients.
• Loan size & rate: Advance rates of 80%–90% of invoice value; fees 2%–4% per 30 days.
• Beancount prep: Flag invoices eligible for funding and reconcile fees as cost of goods sold.

Microloans and Community Development Fund Loans​

• Best when: You need <$50k and value mentoring or technical assistance.
• Loan size & rate: Typically $5k–$50k with 6%–13% APR.
• Beancount prep: Document community impact and job creation stats pulled from your ledger.

Step 4: Improve Your Credit Package in 30 Days​

You cannot change last year’s results, but you can polish the presentation fast.

• Tighten accounts receivable. Use Beancount’s aging report to target overdue customers and document collection plans.
• Reduce discretionary spending. Update your budget, tag nonessential expenses, and demonstrate improved margins in the latest month.
• Separate personal and business flows. Reconcile owner draws and ensure all personal transactions are coded to equity, not operating expenses.
• Increase cash reserves. Sweep idle funds into a business savings account to show liquidity equal to at least two months of operating expenses.
• Check your personal credit. Download reports from Equifax, Experian, and TransUnion and dispute errors now.

Document each change in a “credit readiness log” so you can narrate improvements during lender conversations.

Step 5: Shop the Market with a Targeted Outreach List​

Create a lender comparison spreadsheet that captures:

• Loan program and maximum amount
• Rate type (fixed, variable, or indexed)
• Required collateral and guarantees
• Minimum credit score, revenue, and time in business
• Decision timelines and funding speed

Prioritize lenders that already bank your deposit accounts, community development financial institutions (CDFIs) that understand local markets, and fintech lenders known for API-based underwriting. Record each conversation with date, contact, and next steps so you can keep momentum without double-booking meetings.

Step 6: Submit, Track, and Update in Beancount​

Once you submit applications:

1. Log application fees and deposits. Use a dedicated expense account so you can deduct or capitalize costs appropriately.
2. Track conditional approvals. Create metadata tags like loan_status:"conditional" to surface open requests.
3. Respond to underwriting questions. Build saved Beancount queries (for example, inventory turnover, gross margin trend) so you can export reports quickly.
4. Update the ledger when funded. Record the disbursement, set up the liability account, and schedule automatic postings for interest and principal.

Step 7: Maintain Post-Funding Discipline​

Winning approval is the start of the relationship, not the end.

• Monitor covenants. If your loan agreement requires quarterly DSCR or minimum cash, schedule Beancount queries that alert you before you slip.
• Automate reporting. Create templates for the monthly or quarterly packages your lender expects. Send them early.
• Document capital deployment. Tag every expense tied to the loan so you can demonstrate compliance with the approved use of funds.
• Plan for renewal or payoff. Build a timeline 6–12 months before maturity with tasks for refinancing or repayment.

The Beancount Advantage​

Lenders gravitate toward borrowers who think like controllers. By leveraging a transparent, auditable ledger, you can replace frantic spreadsheet scrambles with repeatable workflows:

• Clarity: Double-entry bookkeeping keeps every draw, fee, and payment reconciled.
• Speed: Saved queries and exports answer underwriter questions without manual rework.
• Confidence: Clean books help you negotiate better rates, larger limits, or more flexible covenants.

Use this playbook as a checklist the next time you need outside capital. With Beancount as the source of truth, your numbers speak the language lenders expect—and that can turn a stressful loan hunt into a strategic win.

Finding the right business loan in 2025 is less about chasing the lowest advertised rate and more about matching how you’ll use the money to the product designed for that use. Below is a founder‑friendly map of the current landscape—what’s cheapest, what’s fastest, and what’s safest—plus concrete next steps and lender criteria you can actually meet.

TL;DR — Pick by Your Situation​

• Lowest overall APR for general use: An SBA 7(a) term loan is your best bet. These are government-guaranteed, with rates capped relative to the prime rate. Expect competitive costs, but be prepared for more paperwork and a longer process.
• Real estate or heavy equipment, long fixed rate: The SBA 504 loan program is designed for this. It offers 10, 20, or 25-year fixed portions pegged to 10-year Treasuries. Recent 2025 debenture rates have hovered in the mid-6% range.
• Flexible working capital you can reuse: A business line of credit (LOC) from a bank or online lender is ideal. For example, Bluevine offers LOCs up to $250k with rates as low as 7.8$10k monthly revenue, 12+ months in business).
• Money this week: An online term loan is the fastest option. OnDeck, for instance, funds quickly with term loans up to $250k and lines of credit up to$200k. Typical minimums are a 625 FICO score, $100k+ in annual revenue, and at least one year in business.
• Newer businesses or smaller amounts: Look into an SBA Microloan (up to $50k with 8$15k through crowdfunding.
• You invoice large customers and wait to get paid: Invoice financing or factoring can unlock cash tied up in receivables. Typical fees start around 2.2% per 30 days, which is cheap if invoices turn quickly but expensive if they don't.
• You operate in a rural area: USDA Business & Industry (B&I) loan guarantees are an underused but powerful tool. In FY2025, these guarantees commonly cover 80% of the loan.
• Last resort only: A merchant cash advance (MCA) offers easy approval but comes at a steep price. Their factor rates (often 1.2–1.5) can translate to eye-watering APRs. Know what you’re signing.

The 2025 Rate Backdrop (What “Cheap” Means Right Now)​

To understand loan costs, it helps to know the current financial environment. The U.S. prime rate is 7.50% as of December 19, 2024, and has remained unchanged through early September 2025. Many bank and SBA loan rates float at prime plus a spread. The SBA keeps its options competitive by capping lender pricing on most 7(a) loans based on size (e.g., base rate + 3.0% for larger loans).

As of mid-2025, average Annual Percentage Rates (APRs) for small business loans look roughly like this: bank term loans are around 7–8%, bank lines of credit are 6.5–8%, online loans have a wide range of 9–75%, and SBA 7(a) loans typically fall between 10.5–15.5%. Remember to treat these as ranges, not promises, as your final rate will depend on your business profile.

Best Loans by Use Case​

1. All-Purpose Working Capital at the Best Rate → SBA 7(a)​

• Why it’s great: The SBA 7(a) loan is a versatile workhorse. It has broad permitted uses, including working capital, refinancing debt, purchasing equipment, and even funding acquisitions. Government rate caps tied to the prime rate keep it affordable. The maximum loan size is **$5M**, with the SBA guaranteeing up to 85$150k and 75% for larger amounts.
• What to expect: Be prepared for a more intensive documentation and underwriting process. While the SBA’s own processing can take 5–10 business days, the total time from your application to receiving funds often takes several weeks due to lender underwriting and closing steps.
• New in 2025: The 7(a) Working Capital Pilot (WCP) now offers monitored lines of credit up to $5M with a maximum maturity of 60 months, all under the same general rate framework. This is a great option if you need revolving capital with SBA protections.

2. Real Estate or Big-Ticket Equipment → SBA 504​

• Why it’s great: The SBA 504 program is specifically designed for major fixed-asset purchases. It offers long, fixed terms of 10, 20, or 25 years on the portion of the loan from a Certified Development Company (CDC), which is pegged to 10-year Treasuries. Recent 2025 debenture rates have been in the mid-6% range. The bank's portion of the loan is typically fixed or variable.
• Caveats: This loan has limited uses and cannot be used for working capital. It also requires the borrower to contribute around 10% in equity (more for startups or special-use buildings).

3. Flexible, Reusable Funding for Recurring Needs → Business Line of Credit​

• Why it’s great: A business line of credit (LOC) allows you to draw cash as you need it and only pay interest on what you use. It's a perfect tool for creating a payroll cushion, managing inventory, or bridging gaps in receivables.
• Bank LOC: These offer the lowest rates if you qualify, with 2025 averages sitting around 6.5–8% APR.
• Online LOC: These are easier and faster to obtain. Bluevine offers up to $250k** with rates as low as **7.8$200k and can fund draws rapidly.
• SBA LOC option: The new 7(a) WCP line of credit is an excellent choice if you want the rate protection of an SBA loan on your revolving credit.

4. Need Funds in 24–72 Hours → Online Term Loan​

• Why it’s great: When speed is the priority, online term loans deliver with streamlined underwriting and fast decisions.
• Example: OnDeck offers term loans from $5k–$250k with repayment terms up to 24 months. Their typical minimums are a 625 FICO score, $100k in annual revenue, and one year in business. Same-day or next-day funding is common after approval.
• Trade-off: You'll pay for the convenience. APRs for online loans can run higher than banks or the SBA, spanning a wide range of 9–75% depending on your business profile and the loan term. Always weigh the need for speed against the higher cost.

5. Smaller Amounts or Thinner Credit Files → SBA Microloan or Kiva​

• SBA Microloan: This program provides loans up to $50k through nonprofit intermediaries. Interest rates are typically 8–13% with terms up to seven years. Borrowers usually need to pledge collateral and provide a personal guarantee. It’s a great option for startups and smaller working capital needs.
• Kiva (U.S.): Kiva facilitates crowdfunded loans from $1k–$15k with 0% interest, no fees, and no collateral. The process involves social underwriting and community support, with approvals taking around 10–15 business days.

6. Cash Locked in Invoices → Invoice Financing/Factoring​

• How it works: This method allows you to get a cash advance against your approved invoices. The fee is typically quoted per 30 days the invoice is outstanding, not as an APR.
• Pricing: Providers like FundThrough offer fees starting around 2.2% per 30 days. It's crucial to calculate the cost based on your actual payment timelines to make an apples-to-apples comparison with other loan types.
• Best for: This is ideal for B2B companies that have reliable customers but deal with slow payment terms (e.g., net-30 or net-45).

7. Rural Operations and Projects → USDA Business & Industry (B&I)​

• Why it’s great: For businesses operating in eligible rural areas, lenders can issue loans backed by the USDA with up to 80% guarantees in FY2025. This powerful risk relief for the lender can translate into better terms for the borrower. Maximum loan sizes can be quite large, often well above typical SBA caps.

8. When You’re Tempted by the “Easy Approval” Route → MCAs (Handle with Care)​

• Heads-up: A merchant cash advance (MCA) is not technically a loan. You receive a lump sum in exchange for a percentage of your future sales. The cost is expressed as a factor rate (commonly 1.2–1.5), which can translate to very high APRs once annualized. Regulators have acted against deceptive practices in this space, so read all disclosures carefully before signing.

2025 Comparison Snapshot​

Lender Criteria You Can Actually Hit​

• OnDeck (fast term loans & LOC): Minimum 625 FICO, $100k+** annual revenue, and **1+ year** in business. They offer up to **$250k for term loans and $200k for lines of credit.
• Bluevine (online LOC): You can get up to $250k** with rates from **7.8$10k+ in monthly revenue, and 12+ months in business. Some state and industry exclusions apply.
• Kiva (0% microloans): Offers $1k–$15k at 0% APR with no collateral required, but there is a social proof and crowdfunding component to the application.

How to Choose in Under 5 Minutes​

• If you can wait and want the best rate: Start with an SBA 7(a) loan for general needs or a 504 loan for real estate and equipment. The rate caps and long terms result in the lowest lifetime cost.
• If speed beats price: Go with an online term loan or an online LOC. You can qualify with less friction and get funded quickly.
• If you’re small/new and need ≤$50k: Try an SBA Microloan or Kiva. These options allow you to work with community lenders and keep costs in check.
• If cash is trapped in invoices: Use invoice financing to smooth out your cash cycles, but keep a close eye on the per-30-day fees.
• If you’re rural: Ask local lenders about USDA B&I guarantees—they are generous in FY2025 and can significantly improve your loan terms.

One-Hour Application Prep Checklist​

Having these documents ready will shave days off the underwriting process:

• ID and ownership info (and be ready for personal guarantees on many products).
• Business financials: The last 6–24 months of bank statements, your year-to-date P&L and balance sheet, and prior-year tax returns.
• AR/AP aging and invoice list if applying for a line of credit or invoice financing.
• Use-of-funds memo: A brief document explaining what you need the money for, why it's important, and how you plan to pay it back.
• For SBA loans: Confirm you meet the agency's size standards and the "credit-elsewhere" test, where lenders must document why conventional credit isn’t available to you on reasonable terms.

Pro Tips to Save Real Money​

• Match product to use. Using the wrong tool for the job gets expensive fast. Use a line of credit or a 7(a) for working capital, and a 504 for real estate. Avoid using a high-cost product like an MCA for long-term needs.
• Compare APR, not just rates. Online lenders may quote “fees” or “monthly rates.” Always convert these to an Annual Percentage Rate (APR) to accurately compare offers from banks and the SBA.
• Build a relationship with one lender. Your credit limits and pricing often improve after 3–6 months of positive payment history, especially with online LOCs that may reassess your account monthly.
• Avoid MCAs when possible. Factor rates like 1.35 can equal triple-digit APRs. Only consider this option if it’s the difference between survival and shutdown, and even then, read the disclosures with extreme care.

What to Do Next (Simple Path)​

• If you want the best rate: Talk to an SBA-active bank and a CDC on the same day to explore 7(a) and 504 loans. Use the SBA’s online directories to find active lenders and CDCs in your area.
• If you need speed: Pre-qualify with a reputable online lender (like OnDeck for term loans/LOCs or Bluevine for LOCs) to see what you're eligible for today. Use that offer to pressure-test terms with other lenders.
• If you’re rural or need less than $50k: Contact a local Community Development Financial Institution (CDFI) or a USDA-experienced bank to ask about B&I loans or microloans.