Popular Financing Options Every Business Should Know

Whether you’re gearing up for growth, need to replace a piece of equipment, are ready to expand or want to smooth out your cash flow, understanding your options for business financing is important. In this post, we break down five popular financing types you should know about and common uses for each one to help you choose the right financing option for your needs.

Conventional Term Loans

• What it is: Best for planned, longer-term investments—for example, an expensive piece of equipment—with a defined cost and useful life. These loans provide a set amount of money at a fixed or variable interest rate that you repay over a defined period of time. 
• What you can use it for: Excellent for things like buying equipment, purchasing inventory, investing in property, consolidating high-interest debt or funding expansion-related expenses. 
• Why businesses choose it:
  • Predictable payments: It’s a good option if you want a fixed repayment schedule with regular monthly payments.
  • Flexible terms: Choose between fixed or variable rates and repayment lengths that fit the way your business operates.
  • QuickStep™ processing: At Banner, we offer clients a streamlined application process, with financing up to $2 million and decisions within a few days.

To learn more, visit our Equipment and Term Loans page. Or for more on equipment financing, check out our blog Should You Purchase or Lease Business Equipment.

Conventional Lines of Credit

• What it is: Ideal for short-term, recurring or unpredictable expenses tied to day-to-day operations. Lines may be secured or unsecured depending on your business’s financial profile and needs.
• What you can use it for: Popular uses include covering operating expenses, stabilizing cash flow, financing inventory, managing seasonal swings and covering unexpected expenses without taking on long‑term debt.
• Why businesses choose it:
  • Flexible terms: Terms are tailored to your business cash flow cycle and financing needs on a revolving or non-revolving basis, secured or unsecured and the structure for repaying the balance.
  • Gives your business agility: Growing or seasonal businesses can purchase inventory, respond to demand and handle unexpected costs.
  • QuickStep™ processing: At Banner, our clients can access a streamlined application process, with financing up to $500,000 and decisions within a few days.

To learn more visit our Business Lines of Credit page. Or for more on business lines of credit, check out our blog 3 Ways to Best Utilize a Business Line of Credit.

SBA-Backed Loans 

If your repayment is based largely upon projections or if you don’t have a sufficient down payment or collateral, you may want to look beyond conventional financing to the U.S. Small Business Administration’s (SBA) loans and lines of credit, which are issued by private lenders like Banner with a 50-75 percent guarantee by the SBA. 

• What it is: The SBA’s 7(a) loan is the agency’s flagship program. It typically offers longer repayment terms, more flexible uses and lower equity requirements than many conventional loans.  
• What you can use it for: Best for building or transforming your business—think long-term, one-time or structural uses. Common uses are purchasing equipment, buying or expanding a business, owner‑occupied commercial real estate, refinancing business debt and long-term working capital.
• Why businesses choose it:
  • Lower down payments: Often allows lower down payments compared to conventional financing.
  • Longer repayment terms: Typically longer repayment schedules to help keep monthly payments manageable.
  • More flexible credit standards: SBA guidelines allow lenders more flexibility, which may help businesses with lower credit scores, limited operating history (e.g., startups), higher debt ratios and less collateral.

SBA-Backed Lines of Credit 

CAPLines

• What are they: Specific Lines of Credit attractive for many of the same reasons as the SBA loans outlined above
• What you can use them for: There are three primary CAPLines:
  • Working Capital, great to fund normal cash flow cycles – think short-term, recurring and cyclical working-capital needs, like inventory purchases, payroll, seasonal and cyclical expenses and short-term operating expenses. 
  • Seasonal – ideal for working capital or inventory build-up for highly seasonal businesses.
  • Contract – designed to help you finance one or more contracts. 
• Why businesses choose them:
  • Flexible, repeatable access to funds: It’s often more efficient and less expensive over time to borrow only what you need and repay it as your cash flow cycles.
  • More flexible credit standards: Allows lenders more flexibility, which may help businesses with lower credit scores, higher debt- ratios and less collateral.

SBA Working Capital Pilot Program

Launched in 2024, the SBA Working Capital Pilot Program offers distinct differences from CAPLines. 

• What it is: It is a flexible line of credit to help eligible small businesses manage short term cash flow needs. It offers a credit line up to $5 million with a maximum five year term (renewable annually).
• What you can use it for: Bridge the gap between invoicing and payment; domestic or international sales or purchases; pre-shipment costs; support for federal, state and/or local government contracts; refinancing eligible debt.
• Why businesses choose it: 
  • Market based rates: Interest rates aligned with the market, paired with a low SBA guaranty fee structure. 
  • Built-in flexibility: Provides room to absorb growth, seasonality or volatility.
  • Lower overall cost: Often less expensive than many non SBA options.

The Working Capital Pilot Program is rapidly growing in popularity, but not all lenders can offer it. Banner Bank is one of the first banks in the U.S. selected by the SBA to participate in the pilot program. 

SBA Express Loans and Lines of Credit 

• What are they: Available through the 7(a) loan program, the SBA Express Loan and Line of Credit allow you to borrow $5,000 to $500,000 with more streamlined paperwork and expedited approval and funding.
• What you can use them for: The same as standard 7(a) loans and lines detailed above but with faster decisions and a maximum loan amount of $500,000.
• Why businesses choose them:
  • Faster, simpler decisions: Our SBA Preferred Lender status helps keep the process from application to approval moving forward efficiently.
  • Optional revolving credit: You can pair the loan with a line of credit to support working capital needs, such as cash on hand, accounts receivable and inventory.

As an SBA Preferred Lender, we approve and process SBA loans and lines of credit in-house, helping you secure funding more quickly. To learn more visit our SBA Financing Options page or the U.S. Small Business Administration website. You can also check out our other popular blogs on the topic:
What to know before applying for an SBA 7(a) or 504 loan
Understanding SBA Express Loans and Lines of Credit
Understanding the SBA Working Capital Pilot Program

Considering financing for your business? We’re ready to help. Contact your banker, stop by your local branch or give us a call at 800‑272‑9933.