Business capital comes in many forms — and the right structure depends on what you need the money for, your business's financial position, and what you qualify for. There is no single "best" type of business financing. There is only the financing that's appropriate for your specific situation.
Types of Business Capital
Business capital generally falls into a few categories:
- Debt financing — Term loans, lines of credit, equipment financing, and other structures where you borrow and repay with interest.
- Short-term financing — Merchant Cash Advances, invoice factoring, and other structures with shorter terms and higher costs.
- Government-backed financing — SBA 7(a) and 504 loans, which offer lower down payments and longer terms for qualifying businesses.
- Asset-based financing — Financing secured by your business's assets (receivables, inventory, equipment).
- Debt relief — Refinancing, consolidation, restructuring, and settlement when existing debt is unsustainable.
How to Choose the Right Capital
The right capital depends on three questions:
- What do you need the money for? Working capital, equipment, real estate, acquisition, or debt relief — each has a different appropriate structure.
- What can you qualify for? Your revenue, cash flow, credit, time in business, and collateral determine what's available.
- What can you afford? The payment, term, and total cost must be sustainable for your business's cash flow.
If you're not sure where to start, use our business capital calculator or Find My Capital tool to get a personalized assessment.
Business Financing Options
The main types of business capital — understand each before choosing.
Business Term Loans
Lump-sum loans repaid over a set term — for specific purchases or investments.
Business Line of Credit
Revolving credit — draw, repay, and draw again for flexible working capital.
Working Capital
Short-term financing for day-to-day operations and cash flow management.
Equipment Financing
Loans or leases for business equipment, with the equipment as collateral.
SBA Financing
Government-backed loans with lower down payments and longer terms.
MCA & Debt Solutions
If you're carrying MCA debt or your business debt is unsustainable, explore relief options.
MCA Debt Relief
Options when MCA payments are hurting your cash flow.
Business Debt Solutions
Refinance, consolidate, restructure, or settle business debt.
MCA Payment Calculator
Estimate your MCA payment burden as a percentage of revenue.
Business Debt Burden Calculator
Calculate your debt-to-revenue ratio.
Comparisons & Tools
Compare options and calculate your numbers before deciding.
Line of Credit vs Term Loan
The difference between revolving credit and a lump-sum loan.
SBA 7(a) vs Conventional Loan
Compare government-backed and conventional bank financing.
Find My Capital
Get a personalized assessment of which capital solutions may be appropriate.
Business Capital Calculator
Estimate how much capital your business may qualify for.
Explore Your Options
Submit your information and our team will review which available capital structures may be appropriate for your business or project.
Financing is subject to underwriting, eligibility, and approval. Products, terms, and availability vary by program and lender. Submitting information does not guarantee approval or funding. This page is educational and is not financial, legal, tax, or investment advice.