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Types of small-business financing
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Common types of small-business financing include working capital, a business line of credit, a term loan, equipment financing, invoice factoring, and revenue-based financing. Each suits a different need, everyday operations, flexible draws, a one-time purchase, an asset, unpaid invoices, or repayment that flexes with sales. YesLane, a funding marketplace, helps you see which lenders work with businesses like yours.
Small-business financing comes in several common shapes, each suited to a different kind of need, some cover everyday operations, others fund a specific purchase, others flex with sales.
This guide describes the common types in plain terms, without figures, and shows how YesLane, a funding marketplace, helps you see which lenders work with businesses like yours.
Why there are several kinds
There is no single "business loan" that fits every situation. Financing comes in several shapes because business needs differ, covering a timing gap in operations is a different problem from acquiring a truck or bridging unpaid invoices.
Knowing the common types by name helps you describe your own need clearly. From there, the question becomes which lenders work with a business like yours for that kind of financing, which is what a marketplace helps you see.
The common types, described structurally
Working capital
Short-term funding for everyday operating needs, the gap between paying for what a business needs and getting paid by its customers.
Business line of credit
A revolving arrangement a business can draw from as needs come up, repay, and draw again, flexible for recurring or unpredictable needs.
Term loan
A single amount received once and repaid over an agreed schedule, a familiar shape for a defined, one-time need.
Equipment financing
Funding tied to a specific asset a business needs, such as a vehicle or machinery, where the equipment itself often backs the arrangement.
Invoice factoring
An arrangement built around unpaid customer invoices, so a business can access funds tied to money it is already owed rather than waiting to be paid.
Revenue-based financing
An arrangement where repayment is sized to a share of ongoing revenue, so what a business pays flexes with how much it brings in.
Choosing among them, in plain terms
Describe the need
Is it everyday operations, a specific purchase, unpaid invoices, or repayment that should flex with sales? The need points toward a type.
Match the need to a shape
Each type suits a different problem. Naming your need makes it easier to see which shapes fit and which do not.
See which lenders work with businesses like yours
Share a few structural details with YesLane and see which lenders in our marketplace work with businesses like yours. You choose who to connect with.