Best Types of Business Loans: Ranked by Cost, Speed and Accessibility

With so many business financing options available, choosing the right one can feel overwhelming. Each loan type has trade-offs between cost, speed, accessibility, and flexibility.

This guide ranks the major business loan types across three key dimensions to help you find the right fit for your situation.

The Three Key Trade-offs in Business Lending

Every financing product balances these factors differently:

Cost: Total expense including interest, fees, and opportunity cost.
Speed: Time from application to funds in your account.
Accessibility: How easy it is to qualify based on credit, revenue, and time in business.

Generally, you can optimize for two of these three. Low cost and easy access typically means slow. Fast and accessible typically means expensive. Understanding this trade-off helps you make informed decisions.

Rankings by Cost (Lowest to Highest)

When minimizing total cost is your priority:

Rank	Product	Typical APR	Why This Cost Level
1	SBA 504 Loans	6–9%	Government-subsidized rates for real estate/equipment
2	SBA 7(a) Loans	10–14%	SBA guarantee reduces lender risk, lowering rates
3	Bank Term Loans	8–17%	Conventional rates for well-qualified borrowers
4	Equipment Financing	7–22%	Equipment as collateral reduces lender risk
5	Business Lines of Credit	10–28%	Revolving nature adds flexibility cost
6	Online Term Loans	12–35%	Faster approval means higher rates
7	Invoice Factoring	12–48%	Convenience and speed come at a premium
8	Merchant Cash Advance	40–150%	Minimal requirements = maximum cost

Cost Priority

If cost is your top concern and you can wait 45–90 days, SBA loans are almost always the best option.

Rankings by Speed (Fastest to Slowest)

When you need funds quickly:

Rank	Product	Typical Timeline	Speed Notes
1	Merchant Cash Advance	1–3 days	Minimal underwriting, same-day possible
2	Invoice Factoring	1–5 days	Once set up, advances within hours
3	Online Term Loans	1–7 days	Automated underwriting enables speed
4	Business Lines of Credit	1–14 days	Once approved, draws are immediate
5	Equipment Financing	3–14 days	Collateral simplifies underwriting
6	Bank Term Loans	2–6 weeks	Traditional underwriting takes time
7	SBA 7(a) Loans	45–90 days	Government guarantee requires documentation
8	SBA 504 Loans	60–90 days	Two-lender structure adds complexity

Speed Costs Money

Same-day funding typically means the highest cost options. If you can wait even a few weeks, you'll likely save significantly.

Rankings by Accessibility (Easiest to Hardest)

When qualification is your primary concern:

Rank	Product	Min. Requirements	Accessibility Notes
1	Merchant Cash Advance	500 credit, 3+ months, $50K card sales	Lowest barriers to qualify
2	Invoice Factoring	500 credit, 3+ months, B2B invoices	Customer creditworthiness matters more
3	Online Term Loans	600 credit, 1 year, $100K revenue	Technology enables broader access
4	Equipment Financing	600 credit, 1 year, specific equipment	Collateral offsets credit requirements
5	Business Lines of Credit	600 credit, 6 months, $50K revenue	Varies widely by lender
6	Bank Term Loans	680 credit, 2 years, $250K revenue	Traditional standards apply
7	SBA 7(a) Loans	650 credit, 2 years, strong financials	Thorough documentation required
8	SBA 504 Loans	650+ credit, specific real estate/equipment use	Most restrictive use-of-funds

Product-by-Product Deep Dives

Here's a detailed look at each financing option:

SBA 7(a) Loans

The most versatile SBA program, suitable for almost any legitimate business purpose.

Best for: Established businesses seeking the lowest possible cost for expansion, equipment, working capital, or real estate.
Loan range: $25,000–$5,000,000
Terms: Up to 10 years (working capital), 10 years (equipment), 25 years (real estate)
Pros: Lowest rates, longest terms, flexible use of funds.
Cons: Slow process, extensive documentation, personal guarantee required.

Term Loans

Traditional lump-sum financing repaid over a fixed term.

Best for: Specific purchases or investments where you need a defined amount upfront.
Loan range: $25,000–$500,000+ (bank); $5,000–$500,000 (online)
Terms: 1–5 years typical
Pros: Predictable payments, available from banks and online lenders.
Cons: Less flexible than revolving credit, may require collateral.

Business Lines of Credit

Revolving credit you can draw from as needed.

Best for: Ongoing working capital needs, cash flow management, unexpected expenses.
Credit line range: $10,000–$250,000+
Terms: Revolving with annual renewal
Pros: Only pay interest on what you use, flexibility to draw and repay.
Cons: Variable rates, potential draw fees, annual fees.

Equipment Financing

Loans specifically for purchasing equipment, with the equipment as collateral.

Best for: Purchasing specific machinery, vehicles, technology, or equipment.
Loan range: Up to 100% of equipment value
Terms: 2–7 years (matched to equipment useful life)
Pros: Equipment as collateral eases qualification, preserves other credit.
Cons: Limited to equipment purchase, lender may restrict equipment types.

Invoice Factoring

Selling your unpaid invoices to receive immediate cash.

Best for: B2B businesses with long payment terms (net-30, net-60) needing faster cash.
Advance rate: 80–90% of invoice value upfront
Cost: 1–4% per 30 days
Pros: Fast cash, based on customer credit not yours, scales with sales.
Cons: Ongoing cost structure, customers know you're factoring.

Merchant Cash Advances

Advance against future credit card sales, repaid through daily deductions.

Best for: Last resort when other options are unavailable and need is urgent.
Advance range: $5,000–$500,000
Cost: Factor rates 1.1–1.5 (equivalent to 40–150% APR)
Pros: Fast funding, minimal requirements, automatic repayment.
Cons: Very expensive, daily cash flow impact, can trap businesses in debt cycles.

MCAs Are Expensive

MCAs can cost 3–5x more than traditional loans. Only use when no other option exists and you have a clear path to repay.

Making Your Decision

Use this framework to choose:

If cost is priority and you can wait: Start with SBA loans, then bank term loans.
If speed is priority: Online lenders or lines of credit balance speed and cost.
If qualification is challenging: Equipment financing (if buying equipment) or invoice factoring (if B2B) may work.
If all else fails: MCAs are available but should be a true last resort.

Compare Multiple Options

Liminal shows you qualifying options across multiple loan types from one application, helping you compare the true cost of each.