Business Financing: Options, Costs and Requirements
Start with the financing structure and what the money is for. Then compare the cash you receive, every payment and fee, and the conditions for approval. US and UK rules differ, so choose your market before applying.
Have an offer already? Calculate total repayment before you apply. Compare up to four offers in your browser.
Find a financing route
Where is your business based?
Choose your market first. The guides explain the products and local rules before you approach a lender.
United States
Compare US lender routes
Start with lender types, SBA programs and the questions to ask about cost and eligibility.
Explore US lendersUnited Kingdom
Explore UK financing
Check the borrower and facility rules, then compare total cost and guarantee terms.
Explore UK financingChoose the financing type
A term loan, line of credit and sales-based advance put different obligations on your cash flow. Match the structure to the use of funds first.
Calculate total repayment
Compare cash received, the sum of payments, fees and payment timing. An estimated annualized cost is useful only when its assumptions are shown.
Check requirements
Use of funds, trading history, credit, cash flow and security can all affect eligibility. Check the US or UK rules for your borrower and product.
Business financing types
These are different products, even when they provide the same amount of cash. Availability and terms depend on the provider, borrower and country. The examples below describe the structure, not an offer or an approval promise.
| Type | How it works | Check before applying |
|---|---|---|
| Term loan | Receive a lump sum and make scheduled payments over a stated term. | Rate, fees, repayment schedule, collateral and early settlement. |
| Line of credit | Draw from an approved limit as needed; the balance and available credit may change. | Draw fees, interest on drawn amounts, renewal terms and any required cleanup. |
| Equipment financing | Funding is tied to equipment, which may secure the facility. | Eligible asset, deposit, ownership, term and end-of-term conditions. |
| Sales-based advance | The provider advances cash in exchange for a stated amount or share of future sales. | Cash received, total payback, collection frequency, estimated payoff time and reconciliation terms. |
| Equity financing | Sell an ownership stake instead of promising scheduled loan payments. | Ownership dilution, control rights and exit terms; a loan APR is not a comparison measure for equity. |
In the US, SBA 7(a) can cover several business uses, including working capital and changes of ownership. SBA 504 is for eligible major fixed assets and cannot fund working capital or inventory. SBA programs are US programs; use the UK guide for UK facilities. See the full financing options guide for purpose-based choices.
Compare total repayment
For a scheduled loan, add every required payment over the stated term and any mandatory fees paid separately. Record the cash actually received after fees deducted at payout. Total repayment is the cash paid back; cash cost is total paid minus cash received. A fee withheld from the advance changes cash cost even if it does not change the payment schedule.
Illustration only: a $50,000 loan at a fixed 10% annual interest rate, amortized monthly over 36 months, has an approximate $1,613.36 monthly payment and $58,080.94 in scheduled payments. If a $1,000 origination fee is withheld, the business receives $49,000 and its approximate cash cost is $9,080.94. Actual offers can use different payment dates, rounding, fees or rate terms.
A line of credit needs a draw and repayment scenario before a total can be estimated. For a sales-based advance, the stated payback may be known while the payoff date changes with sales. A factor rate is a multiplier, not an APR. Our cost tool estimates an annualized cost from the payment stream; it does not produce a statutory APR. See factor rate vs interest rate for the distinction.
Compare every offer on the same inputs
| Put this in writing | Use it to compare |
|---|---|
| Amount offered and cash actually received | Fees deducted at payout reduce the money you can use. |
| Interest rate, factor rate or fixed repayment | These are different pricing units; convert them to cash out. |
| Term, payment frequency and payment amount | A longer term can lower each payment while increasing total cost. |
| Every mandatory upfront and ongoing fee | Add fees before comparing total repayment or an annualized measure. |
| Early repayment or prepayment terms | Confirm the settlement amount, fee and any interest saving at a date you might repay. |
Interest rate prices interest only. APR, when supplied under the applicable rules, is an annualized comparison measure that includes defined costs. Total repayment is the cash total over the stated term. Check which fees are included in each figure.
Business loan fee breakdown
| Fee | What to ask |
|---|---|
| Origination / arrangement / completion | Is it deducted from the advance, paid separately or added to the balance? |
| Application / processing / underwriting | Is it mandatory, refundable if the loan does not complete, and already included in APR or the quoted total? |
| Ongoing / drawdown / service | Is it charged once, per draw, monthly or on the unused facility? |
| Early repayment / prepayment | What is the settlement amount on a specific date, including any fee and interest rebate? |
| Secured-loan third-party costs | Who pays valuation, legal, filing or closing costs, and are they payable if the deal falls through? |
See how rate, fees, time, guarantees and scheme terms change the whole cost →
Business financing requirements
Eligibility is specific to the product and lender. Before comparing providers, prepare the amount and purpose, recent financial statements, existing debt, credit history and an explanation of how payments fit your cash flow. Ask whether the lender requires collateral or a personal guarantee, and whether applying will involve a credit check. The loan requirements guide explains what lenders commonly examine.
For US SBA 7(a), the business must meet SBA eligibility requirements, including US location, applicable size standards, creditworthiness and a reasonable ability to repay. The SBA also requires that the desired credit not be available on reasonable terms from non-government sources. A lender makes the loan decision; an SBA guarantee does not erase the borrower's repayment obligation. How SBA loans work →
For a sales-based advance, examine sales history, bank or processing records, the collection method and any guarantee in the actual contract. The CFPB describes merchant cash advances as business financing tied to future income, often collected through a share of receipts or fixed withdrawals. Requirements vary by provider; do not assume the product has no collateral or personal guarantee. Read the guarantee guide →
Choose the rules for your market
UK business loan costs and rules
Check arrangement and early-repayment terms, then use the FCA perimeter checker for the borrower, amount, purpose and security in your deal.
US business loan costs and disclosures
Check origination, closing and prepayment terms, then use the state checker to see which cost measure a covered provider must disclose for that deal.
Financing structures and US program rules reviewed 30 September 2026 against the linked SBA and CFPB sources. The repayment example is illustrative. Check current terms and market-specific rules before applying.
Check the terms that can change the decision
What a personal guarantee actually does
A zero-fee offer can still transfer substantial personal risk. Read the clause before letting the headline price decide.
Six questions to ask before you sign
Request the payment schedule, all fees, settlement terms and security in writing.
All seven guides → · 27 questions people ask before they borrow →
What this is not
Read this before you go further
This is not a broker, a lender or a regulated advice service. We cannot see your accounts and we do not know your business, so nothing here is a recommendation to take a particular facility.
Check our numbers against the sources we cite, all of which are the lender's or the regulator's own pages.
Nobody on this site has borrowed any of the products described. Everything here comes from published documents, not from experience.
What changed on this page
30 September 2026 New — Added financing type, total repayment and requirements sections. Put US and UK guide buttons near the top, removed the disclosure banner from the home page, and updated the title and description to match these search intents.