“Business loan” is not one product — it is a shelf of at least ten, each built for a different job, priced differently, and secured by something different. Picking the wrong shelf item is the most common borrowing mistake: businesses take an expensive merchant cash advance for a job a term loan does at a third of the cost, or wait two months on an SBA application for money a line of credit would have delivered in days. This page is the map. It compares the ten core loan types by what they are for, what secures them and what you put at risk — then routes you to the deep guide for the type that fits. How the borrowing process itself runs is covered in how business loans work; what lenders check is in business loan requirements.
General information, not financial advice.
| Type | Best for | What secures it / what you risk |
|---|---|---|
| Term loan | A specific project or purchase with a known cost | Often a blanket lien on business assets + personal guarantee |
| SBA 7(a) | Almost anything: working capital, acquisition, real estate | Collateral where available + personal guarantee |
| SBA 504 | Owner-occupied real estate and heavy equipment | The asset itself |
| SBA Express | Smaller 7(a) loans, faster | Same as 7(a), capped at $500,000 |
| Business line of credit | Short-term gaps and timing mismatches | Usually business assets + guarantee; you pay only on what you draw |
| Equipment financing | A named machine or vehicle | The equipment itself |
| Invoice factoring | Cash trapped in unpaid B2B invoices | The invoices — you sell them |
| Invoice financing | The same gap, keeping collections in-house | The invoices — pledged, not sold |
| SBA microloan | Very small needs, up to $50,000 | Varies; made by nonprofit lenders |
| Commercial real estate loan | Buying the premises | The property |
One fact frames the whole SBA family: the SBA does not lend directly (disaster loans aside). With 7(a), 504 and Express, a private lender makes the loan and the SBA guarantees part of it, which is why an SBA loan still goes through bank underwriting — the guaranty reduces the lender’s risk, it does not remove your file from review.
Term loans are the default: a lump sum repaid in fixed installments over a set term. Banks offer the lowest rates to established businesses; online lenders trade higher prices for faster, lighter underwriting. This is the product most general cost questions are about — the full fee picture is in business loan costs and fees.
SBA 7(a) is the most flexible guaranteed loan — working capital, business acquisition, equipment and real estate in one program, up to $5 million. SBA 504 is narrower and cheaper for its one job: owner-occupied real estate and heavy equipment, with a long-term fixed rate on part of the financing. Choosing between them is a real decision with its own comparison: SBA 7(a) vs 504. SBA Express is the fast lane inside 7(a), capped at $500,000 (some older guides still print the pre-2021 $350,000 cap).
A business line of credit is revolving: an approved limit you draw and repay repeatedly, paying interest only on the balance outstanding. It fits timing gaps — payroll before receivables land — better than any lump-sum product, and it is the wrong tool for a large one-off purchase.
Equipment financing lends against a named asset, which is why it is often the easiest secured loan to qualify for: the machine or vehicle is both the purpose and the collateral. Rates, leasing-vs-buying and industry variants live in the equipment financing hub.
Invoice factoring and invoice financing attack the same problem — cash locked in unpaid invoices — from opposite sides: factoring sells the invoice to a factor who collects it; financing borrows against it while you keep collecting. Both are in the invoice financing hub.
SBA microloans are the smallest formal product: up to $50,000, averaging about $13,000, made by nonprofit intermediary lenders that also coach borrowers — the subject of our SBA microloans guide. Commercial real estate loans are term loans secured by the premises, conventional or SBA-backed; the SBA route for property is usually the 504 above.
Two products sit on the same shelf and are priced like loans but are not. A merchant cash advance (MCA) is a purchase of your future card sales at a factor rate, repaid by daily debits; reported effective APRs run 40–350% (Bridge’s 2026 lender-type analysis — an attributed range, and a wide one). It can be the right emergency tool, but compare it as expensive financing, never as “a loan with a 1.2 rate.” Business credit cards are revolving credit with a personal guarantee attached — useful for small purchases and building a credit file, not a substitute for term funding.
Whichever shelf you pick, eligibility is a separate screen from product choice: the SBA eligibility hub runs the program-level checks, franchise loans covers the franchise path specifically, and the payment math for any of these lives under /tools/ as the general calculators publish.
What are the different types of business loans to consider? Bank of America asks exactly this at the top of its explainer. The working list (SERP consensus, cross-checked against SBA.gov’s loan programs): term loans, SBA 7(a), 504 and Express, business lines of credit, equipment financing, invoice factoring, invoice financing, microloans and commercial real estate loans — plus two non-loans sold beside them, merchant cash advances and business credit cards. The table above matches each to its job and its security.
What is a business loan and how do I get one? A business loan is money a lender advances to a business against a promise to repay with interest, usually secured by business assets or a guarantee and repaid on a fixed schedule. Getting one runs: choose the type that fits the job (this page), pass the lender’s screen (requirements), then follow the application sequence in how to apply for a business loan. For SBA products, note again that a lender — not the SBA — makes the loan.
Which type of business loan is right for you? NerdWallet’s framing, and the answer is job-first, not rate-first: match the product to what the money must do (a fixed purchase, a revolving gap, an unpaid invoice, a very small need), then compare prices inside that type. A cheap loan of the wrong type — a term loan funding a two-week gap, an MCA funding a five-year asset — costs more than the “expensive” loan of the right type.
Sources: SBA.gov loan program pages (7(a), 504, Express, Microloans); NerdWallet “10 Types of Business Loans”; Bankrate “9 Types of Business Loans”; Bank of America business financing pages; Bridge 2026 lender-type analysis (MCA cost range). Currency verified 2026-10-23.