The Ultimate US Business Loans Guide
Find out what you need to know about business loans — including how they work, what
The Ultimate US Business Loans Guide
Find out what you need to know about business loans — including how they work, what they can help with, and how to get one for your business.
They say money makes the world go ’round, and that’s especially true when it comes to running a business. Cash, dough, funds — whatever you call it, it’s essential for maintaining and growing your company. A common way to access extra capital is through a business loan.
But what is a business loan? How can it help? How do you apply for one?
Our ultimate guide to US business loans will explain this in more detail.
What is a Business Loan?
Let’s start with an easy one. A business loan is like any other loan, but it’s used strictly for commercial purposes. They’re extremely common, and they’re often one of the first funding options considered by businesses seeking extra capital.
There are three main components to a business loan:
- Loan amount: How much money are you going to borrow?
- Repayment period: How long will the repayments be spread over?
- Interest rate: How much interest will you pay on the loan?
What’s the Difference Between a Business Loan and a Personal Loan?
Although both loan types provide funding, there are key differences.
Business loans are designed specifically for business use. They typically offer larger loan amounts, come with tailored repayment terms, and help build your business credit score.
Personal loans, on the other hand, are based on your credit score. You can use them for business purposes, but they may not align with your company’s financial needs. Plus, there’s added risk: if something goes wrong, you’re personally liable for the debt.
Types of Business Loans
Business loans come in all shapes and sizes. Some will be better suited to your needs than others. Below is an overview of some common types of loans available to US businesses.
Unsecured Business Loans
Unsecured business loans don’t require you to put down an asset as collateral. That makes it less risky for you, but more risky for the lender, which usually means less-favorable loan terms, like higher interest rates.
Repayment typically happens monthly over an agreed period — often 1 to 5 years, though some lenders may offer up to 10. While longer terms reduce your monthly payments, they also mean you’ll pay more overall due to added interest.
Some providers may also require you to sign a personal guarantee, meaning that if your business fails to keep up with repayments, you’re personally liable.
Secured Business Loan
With a secured business loan, you’re required to put up collateral, such as property, equipment, or inventory. Since you’re taking on more risk, lenders are often willing to offer lower interest rates and better terms. You may even qualify for a larger loan depending on the asset’s value.
If you have a poor credit history, this could help build confidence with lenders.
Keep in mind: if you default, your lender has the right to seize the collateral, so weigh the risk carefully before borrowing.
Short-Term Business Loans
These are ideal for emergency cash needs. As the name suggests, they must be repaid quickly — often in a few months — and come with higher monthly payments. Make sure you’re confident in your ability to repay before signing the agreement.
Working Capital Loans
Working capital loans are also short-term but are specifically designed to help manage cash flow and day-to-day operations (not large purchases or long-term investments).
Invoice Factoring
A variant of invoice financing where the provider collects directly from your customer and then pays you the remaining balance (after deducting fees).
While this puts the burden on your provider, it also exposes your use of financing to your customers, which may affect relationships.
Equipment Loan
An equipment loan is a type of business financing used specifically to purchase equipment or machinery needed for operations. This often includes anything from computers, vehicles, and manufacturing machines to medical devices or construction equipment.
Equipment loans could help businesses preserve cash flow by spreading the cost of expensive purchases over time, often with fixed interest rates and predictable monthly payments, which makes them useful for smaller businesses with reduced cash flow.
Commercial Credit Lines
Instead of taking out an entire lump sum at once, business credit lines allow you to draw money out when needed. You will have a limit on how much you can take out, but you’re free to take it out whenever you like.
One of the main advantages of this is that you will only pay interest on the amount you draw out, saving you money in the long run. Repayment terms are often more flexible, and once you’ve repaid what you owe, in many cases, you’ll be able to borrow up to your credit limit again.
If you need money but are unsure how much you need, commercial lines of credit could be a beneficial solution.
Commercial Mortgage
Commercial mortgages are—yep, you guessed it—mortgages designed for commercial use. This could be to purchase a new property or upgrade your current premises. Then, like a standard mortgage, you’ll repay the amount plus the agreed interest rate.
Benefits of Business Loans
Fund Your Growth
Growth is an important part of any business. If you can fund it purely through profits, that’s great! But sometimes, you need a cash injection to help make those ambitions a reality.
Whether you’re expanding your operations, launching a new product, buying inventory, upgrading equipment, or purchasing real estate, you could be covered. With a business loan, you can look to grow, stay competitive, and adapt to market changes.
Improved Cash Flow
Cash flow is essential for your day-to-day operations, and business loans could be a great way to keep yours steady. They offer a buffer during slower periods (like seasonal fluctuations), delayed client payments, or unexpected expenses. This gives you peace of mind, knowing you have a stable cash flow and can focus on the big picture instead of short-term financial hurdles.
Maintain Ownership
Seeking outside investment from potential partners often means giving up partial ownership of your business. This can limit your decision-making and reduce your overall profit share. In most cases, business loans let you maintain complete control of your operations while still benefiting from the extra cash.
Boost Your Business Credit Score
Taking out and repaying a business loan on time can help to improve your business credit score. A stronger score could allow you to secure future financing at more favorable rates. Your credit profile plays a big part in your company’s reputation, and timely repayments help build that trust.
Debt Consolidation*
It’s not unusual for businesses to carry multiple debts, but juggling them can be a headache, especially when payments are due at different times throughout the month.
A business loan can be used for consolidating any business-related debts into a single loan, which could simplify your finances.
Government-Backed Loan Programs
The US government supports small and medium-sized businesses through the Small Business Administration (SBA). The SBA is there to help small businesses access capital. While SBA programs don’t directly lend money to businesses, they do provide guarantees to lenders. This reduces the risk and encourages lenders to provide the loan you may be looking for.
The SBA supports several loan programs, some of which are listed below:
7(a) Loan Program
The SBA’s most common loan program, the 7(a), offers guarantees to lenders, allowing them to provide financial help for small businesses with special requirements. These guarantees can be handed out to businesses for a range of uses, including:
- Refinancing real estate and buildings.
- Refinancing current business debt.
- Purchasing furniture, fixtures, and supplies.
- Multiple-purpose loans, including any of the above.
The maximum loan amount for a 7(a) loan is $5 million, and there are eligibility criteria you need to meet to be able to get a guarantee. Your eligibility will be based on things like what your business does, its credit history, and where the business operates.
Find out more about 7(a) loans on the SBA website.
504 Loans
In a nutshell, the 504 loan program provides long-term, fixed-rate financing for major fixed assets that promote business growth and job creation. Like the 7(a) loan above, the 504 loan is suited to small businesses, and you must be able to demonstrate that your business’s net worth is less than $20m to qualify.
You can use a 504 loan for things like new facilities, long-term equipment (with a minimum life of 10 years), purchasing new land, and improving existing facilities. You cannot use this type of loan for speculative investment, working capital, or consolidating debts (except in special circumstances).
Find out more about 504 loans on the SBA website.
Microloans
The microloan program from the SBA provides loans up to $50,000 to help small businesses and some not-for-profit childcare centers start up and expand. How does it work? Well, the SBA provides funds to intermediary lenders (which are nonprofit community-based organizations). These intermediaries then administer the Microloan program for eligible borrowers.
Eligibility depends on various circumstances, but, according to the SBA website, intermediaries generally require some type of collateral as well as personal guarantees from the business owner concerned.
Find out more about microloans on the SBA website.
Flexible Options
Business loans come in all shapes and sizes—and the best part? They can often be tailored to meet your specific needs. With a wide range of loan types and providers available, you can choose the solution that aligns with your goals and repayment capacity.
Whether you need short-term support, a long-term growth partner, or financing for a major asset purchase, there’s a loan out there designed to fit your business just right.
How to Choose the Right Business Loan Provider
Loan Terms and Amounts
First things first—figure out exactly how much you need to borrow. If your business requires $25,000 but a lender only offers up to $10,000, you’ll need to keep shopping. Make sure the provider can match your funding needs.
Also, consider the loan term. A longer term usually means lower monthly payments, which could help with short-term cash flow. But remember: you’ll likely pay more in interest over time. A shorter term may save you money in the long run, but the monthly payments will be higher, so make sure your cash flow can handle it.
It’s all about finding the balance that works best for your financial situation and goals.
Interest Rates and Fees
The annual percentage rate (APR) is one of the most important factors to consider. It includes the interest rate plus any additional fees, giving you a complete picture of how much the loan will cost.
Fixed-rate loans lock in your interest rate, so your monthly payments stay the same throughout the term.
Variable-rate loans can fluctuate based on market conditions (like the Federal Reserve rate). This means you could end up paying less or more, depending on the economy.
Watch out for other fees, too—like origination fees, early repayment penalties, or late charges. These can all add up.
Secured vs. Unsecured Loans
With a secured loan, you’ll need to put up collateral (like property, equipment, or inventory). If you default, the lender can seize the asset. But because the lender assumes less risk, you may benefit from lower interest rates and higher borrowing limits.
An unsecured loan doesn’t require collateral. However, it usually comes with higher interest rates and may require a personal guarantee. That means if your business can’t pay, you’re personally liable.
Eligibility Criteria and Application Process
Every lender has different requirements, but they typically assess:
- Your credit score (both business and personal)
- Time in business
- Annual revenue and profitability
- Your business plan and purpose for the loan
Some lenders offer an easy, fully digital application process, especially online lenders or peer-to-peer platforms. Traditional banks may require more documentation and take longer to approve.
Loan Purpose
Lenders want to know how you plan to use the funds. Some types of loans are better suited for certain goals—for example:
- Commercial real estate loans are ideal for buying or improving property.
- Short-term loans are great for emergency expenses.
- Lines of credit provide flexible, ongoing access to funds.
Understanding your “why” will help narrow your options.
Reputation and Customer Service
Don’t skip this step—always check customer reviews. Read up on real-world experiences on platforms like Trustpilot, Google Reviews, or Better Business Bureau (BBB).
If you see recurring issues—like poor communication, slow funding, or hidden fees—that’s a red flag. Look for transparency, responsive service, and a solid track record before you sign anything.
Don’t just rely on articles like this one. You also need to conduct your own research in order to find the loan provider that’s best suited to you and your business.
How Can I Get a Business Loan?**
If you’re looking to secure a loan for your business, you may be in the right place. At Commercial Experts, our mission is to help small and mid-sized businesses like yours find the right financing solutions.
Here’s how it works:
- Tap the button on this page.
- Answer a few quick questions about your business.
- Then, based on the information you enter on the application form, if you meet the criteria of one of the partners on our panel, they will contact you to discuss your application further.
There’s no cost and no obligation—if you don’t like what you see, you can walk away without spending a dime.
So why wait? Tap below to explore your options further.
FAQs
What is a business loan, and how does it work?
A business loan is funding borrowed specifically for business use. You repay it over time—with interest—using the cash to cover expenses like equipment, payroll, expansion, or inventory. The terms, rates, and eligibility depend on your credit profile and financials.
What are the different types of business loans?
There are several options, including secured and unsecured loans, short-term loans, working capital loans, invoice financing, equipment financing, commercial mortgages, and business lines of credit. Each loan is designed to serve different goals.
Can a business loan help improve cash flow?
Loans are often used to cover seasonal slowdowns, delayed customer payments, or sudden expenses. They help you keep operations running smoothly and meet financial obligations when revenue is temporarily tight.
What can I use a business loan for?
Business loans are versatile. You could use one to buy inventory, upgrade equipment, move offices, hire staff, fund marketing campaigns, or consolidate existing debt. They’re useful for both growth and day-to-day operations.
How can I get a business loan?**
Just tap the button on this page and fill out a short form, and see if you could be eligible for a business loan. There’s no obligation, so you only move forward if you’re happy with the options you receive.
*IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
**We may earn a commission if you proceed through our application form and are referred to one of our partners.
