Cliffport Business Capital, a small-business funding service in Galveston, TX, compares six options on one page: working capital, term loans, lines of credit, inventory financing, equipment financing and merchant cash advances. Each is set against how it is repaid, what it can fund and what partners review.
| Options compared | Six |
|---|---|
| Loans among them | Five |
| Not a loan | Merchant cash advance |
| Who decides | Funding partners |
Six Contracts, One Table
One search asks what the four types of business loans are; the honest answer is that the count depends on who is listing them. Here are five loan types, plus the cash advance, which is a different contract.
| Option | How it is repaid | Typical uses |
|---|---|---|
| Working capital | Set payments, months not years | Wages, rent, vendor bills |
| Term loan | Set installments, often years | Remodel, growth, an acquisition |
| Line of credit | Interest on what you draw; limit refills as you repay | Lumpy months, repeat vendor bills |
| Inventory financing | Paid down as goods sell, or on a calendar | Goods paid for before they sell |
| Equipment financing | Installments or lease payments; the equipment anchors it | Ovens, lifts, chairs, vehicles |
| Cash advance | A cut of future card or bank takings | Urgent costs in card-heavy businesses |
Index by Money Purpose
- Payroll see the payroll section on working capital
- Inventory purchases buying stock ahead of demand
- Used, restaurant or contractor equipment equipment financing and leasing
- Uneven months a revolving credit line
- Expansion or a second location a term loan with a fixed schedule
Pledged Assets or None: Secured vs Unsecured
A secured loan is tied to something the partner can claim if payments stop. An unsecured loan has no specific asset pledged, though a personal guarantee or a general lien on business assets can still apply. The difference shows up in pricing, paperwork and what happens on default.
What partners accept as collateral
- Equipment or vehicles bought with the money
- Inventory on the shelves or in the cooler
- Receivables owed by customers
- Commercial real estate
- Cash or deposit accounts
- A general lien over everything the business owns
Types of Equipment Financing and Working Capital, With Examples
Equipment money comes as a loan (you own it from the start), a finance lease (you may own it at the end) or a fair-market-value lease (you may hand it back). Working capital takes forms such as a short term loan, a credit line, invoice-based funding or inventory financing.
Two examples: a café owner replacing an espresso machine compares a loan with a lease; a contractor waiting on a commercial invoice compares a short working capital loan with a credit line. Neither choice is about the rate alone; it is about when the money comes back.
What Partners Review Across All Six
Records vary by partner and product; a partner may ask for some of these: recent business bank statements, time in business, the purpose of the money, existing debts and, for equipment, a vendor quote. Sector counts that show how local businesses are spread are on the industry pages.
By Cliffport Business Capital · Updated