Funding solutions

Five ways to fund your business, explained plainly.

OpenQuote helps you explore third-party funding partners across these structures. Every offer, term, and price is set by the funding partner, not by us. Our role is to help you read and compare them.

Market ranges on this page are general US market and federal data. They are educational, not OpenQuote pricing or an offer.

Structure 01

Merchant Cash Advance

Multiplier pricing · Daily or weekly remittance

Capital provided against your future sales, repaid through automatic daily or weekly remittances and priced as a fixed multiplier of the advance.

A funding partner reviews recent business bank or processing statements and, if approved, advances the capital. Repayment is collected automatically as a share of ongoing sales or as fixed periodic remittances, so payments can move with revenue. This is a purchase of future receivables, not a loan, and terms vary by partner.

Best for

Businesses with steady card or bank sales volume
Owners who want repayment that tracks revenue
Seasonal businesses whose sales move month to month

What to consider

Cost is a fixed multiplier of the advance, not an annualized figure; ask your partner for the total repayment in dollars before you sign
In this market the multiplier commonly runs about 1.1x to 1.5x and the share collected from sales is typically 10% to 20%; ask where an offer falls in those ranges. Industry figures, not an OpenQuote quote
As a market guide, first advances commonly land between $20,000 and $80,000 and are often sized at roughly 1.1 to 1.5 times your monthly sales; your amount depends on the partner and your numbers. Industry figures, not an OpenQuote quote
Remittance frequency and method vary by partner, so confirm both up front
Best suited to businesses that can support steady repayment from ongoing revenue

Structure 02

Business Term Loans

Annualized pricing · Fixed monthly payments

A fixed amount repaid on a set schedule with regular payments, priced on an annualized basis with a clear payoff date.

Funding partners review your financials, time in business, and credit profile to set the amount, the term, and the pricing. Once approved, funds are disbursed as a lump sum and repaid on a fixed schedule over months or years, depending on the partner and program.

Best for

Planned investments such as equipment, renovation, or expansion
Businesses that want predictable, fixed payments
Owners with an established operating history

What to consider

Terms, pricing, and any collateral requirements are set by the funding partner and vary by program
A longer term usually means a smaller payment but more total cost over the life of the loan
Some programs ask for a personal guarantee; the partner discloses this during underwriting

How term loans are priced

The term-loan label covers three lender channels, priced in three different worlds. The advertised floor is rarely the APR a file actually pays, so read any offer as an all-in APR.

Bank and SBA: The lowest all-in cost, roughly 6.4 to 17 percent APR, for larger and slower loans.
Marketplace and prime-online: A realized center near 20 to 30 percent APR, with advertised floors near 10 percent.
Short-term online: The highest, a realized APR center in the mid-40s to mid-50s, funded fast on lighter files.

Open the term-loan calculator How term loans are priced Reading an offer

Structure 03

Business Lines of Credit

Cost on draw · Revolving access

Revolving access up to an approved limit, with financing cost applied only to the amount you actually draw.

After approval, you get a credit limit to draw against as needed. As you repay the balance, available credit is replenished, similar to a business credit card. Draw limits, terms, and renewal conditions are set by the funding partner.

Best for

Managing cash flow gaps and short-term working capital
Businesses that want funds on hand for uneven expenses
Owners who prefer to pay for capital only when they use it

What to consider

Financing cost generally applies only to the drawn balance, not the full limit
Some lines carry maintenance, draw, or renewal fees; ask your partner for the full fee schedule
Limits are reviewed periodically and can change with business performance

How lines of credit are priced

A line of credit is revolving: you draw against a limit, repay, and draw again, and you are charged on the drawn balance, not the full limit. The cost clusters in two channels, and the advertised floor is rarely the APR a file actually pays, so read any offer as an all-in APR on the drawn balance.

Bank and SBA: The lowest all-in cost, roughly 7 to 16.5 percent APR, on a line charged only on the balance you draw.
Online and fintech: A realized APR center in the mid-50s, far above advertised floors, often quoted in weekly or monthly fees rather than an APR.

Open the line-of-credit calculator How lines of credit are priced Using a line of credit

Structure 04

Equipment Financing

Asset-secured · Fixed term

Funding structured to buy or lease specific equipment, with the equipment itself often serving as security for the arrangement.

A funding partner finances some or all of the equipment cost and uses the equipment as security. Repayment runs on a fixed schedule meant to match the useful life of the asset. Depending on the partner, this is structured as a loan or a lease.

Best for

Purchasing vehicles, machinery, technology, or other equipment
Businesses that want to keep working capital free for operations
Owners who prefer funding tied to a specific asset

What to consider

Down payment and the share of cost financed vary by partner and equipment type
Because the equipment secures the funding, it can be repossessed for nonpayment under the agreement
Lease and loan structures carry different tax and ownership effects; check with your accountant

How equipment financing is priced

Equipment financing is asset-backed: the equipment is the collateral, so it prices below the unsecured structures and carries the narrowest advertised-to-sold gap of any product. It is quoted two ways, a loan or EFA as an APR, or a lease as a money factor that converts to an APR-equivalent once you apply the term and any residual.

Captive, bank, and SBA: The lowest all-in cost, roughly 5 to 13 percent APR-equivalent, and sold-price-anchored; captives run 0 percent APR promotions on new equipment.
Independent finance company: A center near 10 percent APR-equivalent, roughly 6.5 to 18 percent, the strongest measured price record in the set.
Online and fintech: Higher, and aggregator-estimated rather than measured; the securitized record is entirely prime and tops out near 10.5 percent.

Open the equipment calculator How equipment financing is priced Loan or lease on equipment

Structure 05

Invoice Factoring

Advance on receivables · Discount pricing

A funding partner advances capital against your outstanding invoices, giving you cash before your customers pay on their normal terms.

You sell your outstanding invoices, or the right to collect them, to a factoring partner at a discount. The partner advances a share of the invoice value up front and remits the rest, less fees, once your customer pays. Underwriting looks closely at the creditworthiness of your customers.

Best for

B2B businesses invoicing on 30, 60, or 90 day terms
Businesses bridging the gap between billing and payment
Owners who prefer funding based on receivables

What to consider

Fee structures vary by partner and invoice terms, so ask how the discount is calculated
Some arrangements are disclosed to the invoiced customer; ask whether yours is disclosed or confidential
Best suited to businesses with reliable commercial customers and steady invoicing

How invoice factoring is priced

Invoice factoring is a sale of receivables, not a loan, so it is not quoted as one annualized number. You sell an unpaid invoice, get an advance up front, and get the reserve back minus a factoring fee once your customer pays. It is priced on two native pieces, an advance percentage plus a fee, and underwriting looks at your customer’s credit rather than yours.

Advance percentage: How much of the invoice face you get up front, roughly 65 to 97 percent by industry (freight highest, construction lowest). The held-back remainder is the reserve, released to you net of the fee once your customer pays.
Factoring fee: A percentage of the invoice face per 30 days, roughly 1 to 5 percent (a core 1 to 3, and 3 to 5 for construction and medical). Recourse is the cheaper default; non-recourse covers customer insolvency at a surcharge.

Open the factoring calculator How invoice factoring is priced Using invoice factoring

Also available

SBA loans

Annualized pricing · Federal APR cap

A government-backed loan with the lowest all-in cost in the set, and the slowest, most document-heavy path to close. The SBA guarantees part of the loan, which is why a bank will make it, and it sets a federal maximum the lender cannot exceed.

How SBA loans are capped

An SBA loan is the one financing structure whose APR carries a federal legal maximum, so an offer above the cap is not a valid SBA loan. The 7(a) program covers most uses, Express funds smaller and faster, and 504 finances owner-occupied real estate and heavy equipment. The cap shrinks as the loan grows, the opposite of the online pattern.

SBA 7(a): The general-purpose program, for most uses up to $5 million, with a federal APR cap set by loan size.
SBA Express: A faster, smaller track up to $500,000, carrying a 50 percent SBA guaranty.
SBA 504: Owner-occupied real estate and heavy equipment only, fixed and below market, on a 50/40/10 structure.

Open the SBA calculator How SBA loans are capped Getting an SBA loan

Not sure which structure fits?

Submit one application and we will help you compare the structures and partners that could fit your business. Applying is free, and you are never obligated to accept an offer.

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