Funding structures, side by side
Industry market data, not OpenQuote partner pricing*This is an evidence-gated sheet, not a product ranking. Every figure here traces to cited market data, and a filled column is not an OpenQuote recommendation. Where a source documents no market norm for a cell, we leave that cell blank rather than guess.
Each column is priced in its own convention, so compare the total dollars you repay, not the headline figures.
| Field | Merchant cash advance | Term loan | Line of credit | Equipment financing | Invoice factoring | SBA 7(a) |
|---|---|---|---|---|---|---|
| Structure | A merchant cash advance buys a set amount of your future sales for a lump sum today, repaid from ongoing receipts. | A term loan advances a lump sum you repay on a set monthly schedule over a fixed number of months. | A line of credit is a revolving limit you draw from as needed and repay on the balance you use. | Equipment financing funds a specific machine or vehicle, which serves as the collateral for the financing. | Invoice factoring advances a share of an unpaid invoice now and settles up when your customer pays. | An SBA 7(a) loan is a bank loan backed in part by a federal guarantee and repaid on a long monthly schedule. |
| Pricing convention | Priced as a factor multiplier on the advance amount, fixed at signing. The total owed is the advance times that multiplier. | Quoted as an APR, the annualized cost with fees folded in. Payments follow a set monthly schedule that pays the loan down to zero by the end of the term. | Quoted as an APR on the balance you actually draw, not the full limit. Banks add a flat annual fee; online lenders often add a per-draw or monthly fee instead, folded into the APR. | Written as a loan or a lease. Loans quote an APR and you own from day one; leases quote a money factor, the monthly payment per dollar financed, ending in a $1 buyout or fair market value option. | Priced as an advance percentage of the invoice face plus a factoring fee per 30-day period, not an APR. The unadvanced remainder is a reserve, released net of the fee when your customer pays. | Priced as a spread over a base, commonly WSJ prime. Federal regulation caps that spread by loan size, larger loans capped lower, and variable and fixed schedules each carry their own published cap. |
| Typical cost band | Across the market the multiplier runs about 1.10 to 1.60. Most sold advances land around 1.30 to 1.40, higher than the lowest multipliers funders advertise. | Cost differs by lender channel. Banks commonly center near 8.5% to 10% APR, marketplace lenders near 20% to 30%, and short-term online lenders near 44% to 60% APR on realized loans. | Cost varies by lender channel. Bank or SBA lines commonly center near 8.5% APR and reach about 16.5%; online lines center near 55% APR on realized loans, reaching about 99%. | Captive, bank, or SBA deals commonly run about 5% to 13% APR-equivalent and independent finance companies about 6.5% to 18%. Online quotes near 8% to 22% are directional, not a measured price. | Advances run about 65% to 97% of the invoice, and fees about 1% to 5% for each 30-day period the invoice stays open. Construction and medical sit at the higher end, near 3% to 5% fees with the lowest advances. | Published caps bound the price by loan size: at WSJ prime 6.75%, variable caps run 9.75% to 13.25%. Realized pricing commonly sits inside the caps, near 9.2% to 11.4% APR, small loans nearest the top. |
| Repayment cadence | Repaid daily or weekly, as a fixed ACH amount or a share of card sales. The share the market usually writes is about 10% to 20% of card sales. | Bank and marketplace loans repay on a set monthly amortized schedule. Many short-term online loans repay daily or weekly instead. | You repay on the balance you draw and can redraw as it frees up. Bank lines bill monthly on the drawn balance; online lines often set short per-draw payoff windows of a few months, weekly or monthly. | Repaid in set monthly payments over the financed term. A lease money factor is that monthly payment per dollar of equipment cost, so the payment is fixed the day you sign. | No merchant installment schedule: your customer pays the invoice on their own timeline. The fee accrues per 30-day period until then, and tiered contracts step the fee up the longer it runs. | Not documentedLeft blank because the market source documents no typical figure for this. |
| Term envelope | The estimated payoff window runs about 3 to 18 months, most commonly 6 to 12. That window is an estimate from your sales rather than a fixed date, so the total owed stays the same even if repayment runs long. | Terms run about 3 to 84 months by channel. Short-term online loans cluster near 12 to 15 months, marketplace loans 24 to 60, and bank loans 36 to 84, each on a fixed payoff date. | A line of credit has no fixed payoff term. The committed limit revolves, typically reviewed each year at banks, and each draw is repaid over its own short window rather than one amortization schedule. | Terms run about 24 to 84 months, most commonly 36 to 60, and the schedule is capped by the useful life of the asset being financed. | No fixed payoff term: the deal runs until your customer pays the invoice. The market's average collection window runs about 46 days, so fees commonly accrue past the first 30-day period. | Maturities run long: to 10 years for working capital or equipment and to 25 years for real estate. A longer maturity does not raise the federal cap, which steps by loan size rather than term. |
| Qualification profile | The market typically writes these advances from deposit history, for businesses with steady daily receipts and a short operating history, a profile outside many traditional bank criteria. Weaker files are quoted higher multipliers. | The market typically writes bank term loans for stronger credit files and a longer operating history. Online lenders more often write thinner files and shorter histories, at higher APRs. | The market typically writes bank lines for stronger files, online lines for thinner files at higher cost. Typical limits written run near $16,000 for newer businesses, versus about $73,000 for established ones. | The equipment is the collateral, so underwriting prices both the asset and your file. Prime files reach the lowest-cost channels; online lenders write weaker credit files at higher APR-equivalents. | Factors underwrite your customer's credit and payment history more than your own file, so the market commonly writes newer businesses and thin files. Invoices must be clean, undisputed, and within terms. | SBA sets no credit floor. Lender practice commonly looks for personal credit near 680 or higher, and startups put in at least 10% equity. |
| Early payoff | The multiplier is fixed at signing, so paying early does not lower the total owed and it raises the annualized cost of the money. Some contracts include an early-payoff discount; confirm in writing whether yours does. | Because each payment reduces the balance, paying off early lowers the total cost. Many online and marketplace loans carry no prepayment penalty, though some bank and SBA loans do, so confirm the payoff terms first. | Cost accrues on the drawn balance, so paying down stops charges, and most lines carry no prepayment penalty. A one-time draw or origination fee does not refund, lifting effective APR on a fast payoff. | Not documentedLeft blank because the market source documents no typical figure for this. | There is nothing to pay off early: the deal ends when your customer pays. Exiting the facility is different; early-termination fees commonly run 1% to 3% of the facility or months of minimums. | A prepayment charge applies only on loans of 15 years or more, and only when you prepay more than 25% of the balance in one year. On those loans the charge is 5% in year one, 3% in year two, and 1% in year three. Most shorter loans carry none. |
| Speed to fund | Underwriting leans on recent bank deposits rather than long financial packages, which tends to shorten time to funding. Timing varies by funder and file, and it is not an OpenQuote commitment. | Not documentedLeft blank because the market source documents no typical figure for this. | Not documentedLeft blank because the market source documents no typical figure for this. | Not documentedLeft blank because the market source documents no typical figure for this. | Not documentedLeft blank because the market source documents no typical figure for this. | SBA publishes its decision turnaround: 5 to 10 business days on a standard 7(a), 36 hours on Express. The decision is not the close, documented at 30 to 45 days for Express, and none of it is an OpenQuote commitment. |
| Personal guarantee | Most advance agreements ask the business owner to sign a personal guarantee of the contract terms. Read who signs it and what it covers before you agree. | Not documentedLeft blank because the market source documents no typical figure for this. | Not documentedLeft blank because the market source documents no typical figure for this. | Not documentedLeft blank because the market source documents no typical figure for this. | Factors commonly require either a validity guaranty or a full personal guarantee. A validity guaranty is your warranty that the invoices are valid and undisputed, not a promise that your customer pays. Read which one you sign. | SBA rules require a personal guarantee from every owner of 20% or more, and collateral on loans over $50,000, with liens on business assets. Both are program rules, not lender choices. |
* Market data sources
- KBRA, Fora Financial Asset Securitization 2024-1 (rated August 7, 2024): weighted-average factor multiplier 1.34 over a 13.6-month original term, on a real funded MCA pool.
- KBRA, KCG Securitization II (Kalamata Capital Group) 2026-1 (rated March 4, 2026): weighted-average factor multiplier 1.32, 13.6-month original term.
- DBRS Morningstar, BasePoint MCA Securitization 2023-1 (December 20, 2023): pure MCA pool, weighted-average factor multiplier 1.32, with a securitization minimum pool multiplier of 1.265.
- New York Attorney General, People v. Yellowstone Capital (judgment January 22, 2025): contract tables showing the share of sales rising to a most-common 49%, anchoring the elevated holdback tail.
- Crestmont Capital, Merchant Cash Advance Statistics (updated March 27, 2026): typical factor multiplier 1.1 to 1.5, holdback 10% to 20%, terms 3 to 18 months, common window 6 to 9 months.
Educational market data with full citations on file in substantiation/industry-pricing-by-term-2026-07.md (accessed July 15, 2026). Not OpenQuote partner pricing, and not a quote.
Industry market data as of Jul 2026, not OpenQuote partner pricing. Actual terms and decisions come from third-party funding partners and depend on your business.