Loan FAQ Library

Business

What is a business term loan?

A business term loan provides a lump sum of capital that is repaid over a set period (the term) with regular scheduled payments of principal and interest. Short-term loans run up t...

Read full answer →

Business

What is a business line of credit?

A business line of credit is a flexible, revolving financing facility that lets you borrow up to a set limit, repay, and borrow again as needed. Unlike a term loan, you only pay in...

Read full answer →

Business

What is invoice financing?

Invoice financing (accounts receivable financing) allows businesses to access cash tied up in outstanding invoices before customers pay them. In invoice factoring, you sell your in...

Read full answer →

Business

What is equipment financing?

Equipment financing is a loan or lease specifically used to purchase or lease business equipment — machinery, vehicles, computers, medical devices, restaurant equipment, and more...

Read full answer →

Business

What is a merchant cash advance (MCA)?

A merchant cash advance provides a lump sum of capital in exchange for a percentage of your future credit and debit card sales (or daily bank deposits). Repayment is automatic —...

Read full answer →

Business

How do I qualify for an SBA small business loan?

To qualify for an SBA loan, your business must be a for-profit U.S.-based business of small size (per SBA size standards for your industry), and you must have exhausted or been una...

Read full answer →

Business

What is asset-based lending?

Asset-based lending (ABL) is business financing secured by specific company assets — typically accounts receivable, inventory, equipment, or real estate. The borrowing base is de...

Read full answer →

Business

How does business credit score affect loan eligibility?

Business credit scores (Dun & Bradstreet PAYDEX, Experian Business, Equifax Business) are separate from personal scores and range from 0–100. A PAYDEX score of 80+ indicates on-t...

Read full answer →

Business

What is a personal guarantee on a business loan?

A personal guarantee is a legal commitment by a business owner to personally repay a business loan if the business cannot. By signing a personal guarantee, your personal assets —...

Read full answer →

Business

What is working capital financing?

Working capital financing provides funds to cover a business's short-term operational needs — payroll, rent, inventory, utilities, and other day-to-day expenses. It is intended t...

Read full answer →

Business

What is purchase order (PO) financing?

Purchase order financing provides capital to pay your suppliers when you have confirmed customer orders but lack the funds to fulfill them. The PO finance company pays your supplie...

Read full answer →

Business

What financial documents do I need for a business loan application?

Most business lenders require: business and personal tax returns for the last 2–3 years, business bank statements for the last 3–6 months, current profit and loss statement and...

Read full answer →

Business

What is a startup business loan?

Startup business loans fund businesses that have been operating for less than 2 years or have not yet opened. Because startups lack the financial history traditional lenders requir...

Read full answer →

Business

What is the difference between debt and equity business financing?

Debt financing means borrowing money that must be repaid with interest — loans, lines of credit, bonds. You retain full ownership of your business but have fixed repayment obliga...

Read full answer →

Business

What is a business acquisition loan?

A business acquisition loan provides financing to purchase an existing business. SBA 7(a) loans are the most common financing tool for acquisitions, offering up to $5 million with...

Read full answer →