Term loans provide a lump sum of capital that you repay over a specific period of time, with interest. Short-term loans usually have repayment terms up to 24 months, whereas long-term loans can offer terms up to 10 years, or longer.

A business line of credit is a flexible form of financing that gives you the ability to draw from a set amount of funds when you need capital. Unlike a traditional term loan, you only pay interest on the funds you draw — and once you’ve repaid what you’ve borrowed, you can continue to draw on the line.

Equipment financing is a type of business loan used specifically for purchasing new or used equipment. You can get an equipment loan equal to up to 100% of the value of the equipment you’re looking to buy — which you then pay back over a certain period of time, with interest. The equipment you purchase serves as collateral on the loan.

With invoice factoring, you sell your outstanding invoices to a factoring company at a discount. The factoring company advances you a percentage (typically up to 90%) of your invoice amount and assumes responsibility for collecting repayment. Once your customer pays, the factoring company sends you the difference, minus its fees.

A merchant cash advance (MCA) isn’t technically a business loan. Instead, a financing company gives you an advance of capital that you repay with a percentage of your debit and credit card sales, plus a fee. MCAs are easy to qualify for and fast to fund — but they tend to be one of the most expensive types of business financing.

Commercial real estate loans are used to buy, refinance or renovate commercial property, such as office buildings, storefronts or warehouses. These loans typically function like term loans, where you receive a lump sum of money and pay it back over time, with interest. The commercial property that you buy or renovate serves as collateral on the loan.