Looking for a business loan? It can be hard to know where to start.
Rest assured there are several types of business loans out there that can help you reach your goals—no matter what kind of business you’re building, where you’re at in the process, or how much financing you need.
This article will help you:
Want to learn more about the type of loan that makes sense for your business? Explore our quick glossary below:
Unsecured working capital loans do not require the borrower to provide specific assets or collateral as security for the loan. Instead of relying on designated assets, the approval for this type of loan is typically based on the borrower’s creditworthiness, financial health, and ability to repay the loan.
Businesses with consistent cash flow and a strong credit profile, such as service-oriented organizations or technology companies.
Real estate financing exists so businesses can purchase, develop, or refinance properties intended for commercial use. This type of loan is often used for industrial facilities, hotels, retail stores, or other income-generating properties.
Businesses in the real estate development, construction, or property investment sectors—or businesses in industries that require substantial physical space, like hospitality or healthcare operations.
SBA loans are guaranteed by the U.S. Small Business Administration, so they often stand out as stable financing options with favorable terms for small businesses that support long-term growth.
Small businesses in proven industries, such as healthcare, professional services, or established retail companies.
There are several types of loans that fall under this category, but the main idea is the same: Rather than relying on credit assessments, lenders use the funds expected from clients as collateral for the loan. This enables you to maintain liquidity while obtaining additional funds to support your upcoming financial needs.
Industries with cyclical or seasonal demands, where temporary capital supplies are sufficient for operational needs.
Line of credit loans are flexible forms of financing that provide set credit limits a business can access as needed. This functions similar to a credit card, where the business can borrow, repay, and borrow again up to the approved credit limit.
Businesses with dynamic and varying cash flow requirements, such as retail, seasonal services, or small enterprises.
Equipment financing is designed for the acquisition of equipment or machinery. The equipment itself typically serves as collateral for the loan, making these loans secured, and providing businesses with the means to acquire necessary assets without compromising their working capital.
Businesses that depend heavily on specialized equipment, such as construction, manufacturing, farming, or transportation.
These examples of business loans will help you determine what’s right for you.
| Are you an established business with strong credit? If your business has a history of good credit, you can benefit from the loans that offer larger amounts at lower interest rates. Best types of business loans to consider: – SBA loans | Are you a business owner seeking flexibility? If you value flexibility when it comes to managing your finances, you want a loan that will let you access funds as needed and on your terms. Best types of business loans to consider: – Lines of credit |
| Are you a small business? If your small business doesn’t yet have assets for collateral, you’ll want to choose a loan type that provides quick access to funds without requiring significant assets as security. Best types of business loans to consider: – Unsecured working capital loans | Are you looking for short-term funding? If your business relies on daily transactions (think retail or hospitality) and only needs short-term funding, you will most benefit from a financing option that lets you leverage outstanding invoices for immediate cash flow. Best types of business loans to consider: – Accounts receivable financing |
| Are you an equipment-heavy business? If your business relies on equipment or heavy machinery, you need a specific type of loan that can help you acquire, maintain, and upgrade the assets necessary to operate. Best types of business loans to consider: – Equipment financing | Are you building a real estate venture? If your business involves real estate, you can utilize industry-specific funding for purchasing, refinancing, or improving commercial properties. Best types of business loans to consider:Real estate financing |
Not sure what all the jargon and acronyms mean? We’ve got you covered. Explore the business loan terms below for a fast and inside look at lending.
Interest rate: The percentage that is charged by the loan provider on the principal amount as the cost of borrowing.
Term: The period over which the loan is repaid. It can be short-term (typically less than one year) or long-term (several years).
Collateral: Assets or property that a borrower pledges to secure the loan. Collateral can be seized by the loan provider if the borrower fails to repay.
Unsecured loan: A loan that is not backed by collateral. Approval is based on the borrower’s creditworthiness.
Secured loan: A loan backed by collateral, providing the lender with a form of security in case of default.
Default: Failure to repay the loan as per the agreed-upon terms, leading to potential legal and financial consequences.
Working capital: The difference between a business’s current assets and current liabilities, representing its short-term operational liquidity.
We’re here to help you get your business off the ground as quickly and simply as possible.
You can get funded through 1West in as little as 24 hours by following three easy steps:
Asset financing can seem complicated, but it’s quite simple. But, the jargon used in the industry can be confusing, especially as some asset financing methods have terms that sound identical, abbreviated, or used interchangeably.
Is bookkeeping hard? The short answer is no. It’s a common misconception that you need a formal education to be a bookkeeper, but anyone with solid math skills and the right resources can do it.
There’s the 1West way to get smart financing fast — and there’s everything else. We believe in your small business and we believe in our approach. No nonsense. No surprises. Just expert guidance from start to finish.
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