Common types of business loans include Term Loans, which provide a lump sum of cash upfront that you repay over a set term; SBA Loans, which are government-backed loans with favorable terms; Business Lines of Credit, which give you access to a revolving credit line you can draw from as needed; and Equipment Financing, which are loans used specifically for purchasing business equipment, with the equipment itself serving as collateral.

Lenders typically evaluate several key factors: your business’s cash flow and profitability, your time in business (many prefer at least two years), your annual revenue, and both your personal and business credit scores. A strong, detailed business plan is also crucial for demonstrating how you will use the funds to generate revenue and repay the loan.

A secured business loan requires you to pledge collateral, such as real estate, inventory, or accounts receivable. This collateral reduces the risk for the lender, often resulting in a larger loan amount and a lower interest rate. An unsecured business loan does not require collateral, but because it’s riskier for the lender, it typically comes with higher interest rates and smaller loan amounts.

The timeline for getting a business loan can vary widely. Online lenders can often provide funding in as little as a few days. Traditional banks and SBA loans have a more intensive underwriting process and can take several weeks to a few months from application to funding. Being prepared with all your financial documents can help speed up the process.