The biggest challenge businesses face is being properly capitalized. While this is true of all enterprises, capital is vital to small to mid-cap firms especially those dealing with inventory, supply, distribution, seasonality challenges, and/or growth.

Since many small businesses show losses or are marginally profitable (purposefully or otherwise), the cost of capital will potentially not be optimal, causing business owners to ask “How can we increase sales and margins without the affordable capital to get there?”

BCC leverages our broad understanding of the Commercial and Industrial debt instruments available, and our long-standing relationships with dozens of nationwide lending sources provides clients access to untapped resources, fostering stability and the ability to scale.

Term Loans

  • Loan amount – $10,000 to $25 million

  • Loan term – 1 to 10 years

  • Interest rate – 6% to 30%

  • Funding speed – As little as 2 business days

Best for: Business owners who need short-term financing to cover temporary cash flow gaps; businesses with sufficient collateral that need to borrow larger amounts to pay for expansion plans or to purchase equipment and inventory

Term business loans are the most straightforward lending option for business owners. You borrow a lump sum from the lender, which is paid back over a specific period of time, with either a fixed or variable interest rate. Term loans can either be secured or unsecured and generally, some form of collateral is expected when you need a larger loan or a longer repayment term.

Short-term loans are designed for businesses that need to borrow smaller amounts and are equipped to pay them back relatively quickly, usually in 18 months or less. Qualifying for a short-term loan is less difficult than getting a long-term loan as long as you have a strong personal credit score. There’s a trade-off, however, since the interest rate may be higher.

A long-term loan offers higher borrowing limits and lengthier repayment terms, sometimes up to 20 years. Bond Street also offers a third option in the form of an intermediate loan, with terms ranging from 1 to 3 years. If you want to learn more about Bond Street’s term loan options or you’re ready to apply for a loan, click here to create an account and check your rate.

Small Business Administration Loans

  • Loan amount – $5,000 to $5,000,000

  • Loan term – 5 to 25 years

  • Interest rate – 6% to 13%

  • Funding speed – 1 to 6 months

Best for: Startups and established businesses who need funding to expand; business owners who may have trouble qualifying for a traditional bank loan

The Small Business Administration offers several loan programs to small business owners. A 7(a) loan, for example, may be a good fit if you need long-term working capital to finance equipment or inventory purchases, cover construction costs, buy real estate or renovate an existing property, start a new business or refinancing existing business debt. Repayment terms can last up to 25 years, depending on what the loan is used for.

The microloan program provides up to $50,000 in financing to help small businesses expand. Like a 7(a) loan, you’re required to give the lender some form of collateral as well as a personal guarantee. The maximum repayment term for a microloan is 6 years.

The Small Business Administration also guarantees loans for large-scale real estate or equipment purchases. CDC/504 loans are geared towards businesses who need to borrow up to $5 million and have a tangible net worth of less than $15 million. Repayment terms can extend up to 20 years and the assets you’re financing serve as collateral.

Business Line of Credit

  • Loan amount – $10,000 to $8,000,000

  • Loan term – 6 months to 10 years

  • Interest rate – Prime + 1% to 32%

  • Funding speed – As little as 2 business days

Best for: Businesses that have been operating for at least 12 months, have at least $60,000 in annual revenue and require an ongoing source of working capital

Business lines of credit can be obtained through traditional banks or private lenders and they function similar to a credit card. Business lines are revolving, which means you’re required to make a minimum payment each month but you can continue drawing against the line as long as you have available credit.

This type of loan most often has a variable interest rate and fluctuations in the prime rate can affect the amount of your payment. Some lenders charge an annual fee to maintain a business line of credit. Collateral may or may not be required.

A business line of credit is deal for an established business that desires a flexible way to access capital for almost any purpose. You can use this type of financing as needed and you only pay interest on the funds you draw against your line of credit.


Accounts Receivable Financing

  • Loan amount – Up to 90% of outstanding invoices

  • Loan term – Typically 30 days to 90 days

  • Factor fee – 2% to 3% processing fee, plus a percentage invoices

  • Funding speed – 24 hours to 2 weeks

Best for: Growing businesses that have a positive cash flow and need flexible short-term financing

Accounts receivable financing, also known as invoice financing or factoring, is similar to a merchant cash advance. Companies that offer this type of financing provide businesses with cash, using the business’s outstanding invoices as collateral. It’s possible to borrow up to 90% of the value of your open invoices.

The financing company holds between 10% and 50% of the funding in a reserve account. Once the invoice is paid, the processing fee is deducted, along with the factor fee. The factor fee can range from 1% to 5% of the amount held in reserve and is charged on a weekly basis. After these fees are deducted, the financing company turns the remainder of the reserve funds over to you.

Obtaining accounts receivable financing is relatively quick and easy, with no collateral required. There is a downside, in that the fees are higher compared to other types of business financing. The longer it takes your customers to pay, the more the factor fee costs, which can diminish your profits over the long-term.