Not sure where to start with small business funding? You can choose among loans, lines of credit, grants, equity and crowdfunding, and the right fit depends on your needs, costs and risk. Here is a neutral map.
| Item | Value |
|---|---|
| Financing options in Chase’s guide | 7 options |
| SBA loan programs the guide names | 3 programs: 7(a), Express and 504 |
| Share of equipment cost usually financed | Up to 100% of the equipment cost |
| Repayment on a grant | None (non-repayable funds) |
| Business Initiative funding guide dates | Published Dec 17, 2025; updated Oct 9, 2026 |
These facts come from Chase’s guide to financing a small business, which shows no date, and from Business Initiative’s funding guide. Figures can change, so check the source before you rely on them.
What small business funding covers
Chase’s guide describes financing a small business as obtaining capital and often taking on debt to cover operational expenses or growth initiatives. In plain terms, small business funding is any money that helps a business start, run or grow, and it can arrive in very different forms.
The main families of funding look like this:
- Debt: borrowed money that you repay, usually with interest. Examples are term loans, SBA-backed loans, lines of credit and equipment financing.
- Non-repayable money: grants, and sometimes crowdfunding, where there is no loan to pay back.
- Equity: investors provide cash in exchange for an ownership stake.
- Revenue-linked financing: capital repaid as a share of future revenue.
A longer breakdown sits in the guide to types of small business funding, which compares each family side by side.
Large consumer finance sites organise the topic in a similar way. NerdWallet’s small business menu, for example, groups its “Funding your business” resources under small-business loans, SBA loans, business lines of credit, business grants and startup business loans, according to its financing options page.
No single option suits every owner. A seasonal shop with uneven cash flow, a startup with no revenue and a firm replacing a machine each face different trade-offs, and terms also vary by provider and country.
Debt options: loans, SBA programs, credit lines and equipment finance
Debt is the most familiar route. You receive money now and repay it on a schedule, and the cost is the interest and fees on top of the amount you borrowed.
Business Initiative’s guide, published Dec 17, 2025 and updated Oct 9, 2026, describes loan funding as borrowed money where repayment is required, interest is charged and collateral is often needed. Those four features, repayment, interest, collateral and credit checks, shape almost every product in this section.
The differences between products come down to a few practical questions. Reading each product through the same questions makes them easier to compare:
- Who lends? A bank, a non-bank lender or a lender working with a government guarantee.
- What backs the money? A personal guarantee, an asset, or nothing beyond your credit and cash flow.
- How do you draw it? All at once, or in pieces as you need it.
- How do you repay it? On a fixed schedule, or on a schedule that follows your cash flow.
None of these answers is good or bad in itself. They simply describe where the risk and the flexibility sit, and a product that suits one business can strain another.
Term business loans
Chase’s guide says business loans are traditional financing options provided by commercial banks as well as other non-bank lenders. It adds that they typically offer competitive interest rates and fixed payment terms, but they may require a strong credit history and thorough documentation, per the Chase guide.
The same page says many lenders ask to see the following:
- Your business credit score
- Your personal credit score
- Healthy cash flow
- A business plan
Fixed payment terms mean the repayment amount is set in advance, which can make budgeting simpler. They also mean the payment is due whether a month is busy or quiet, so it helps to test the schedule against your slowest period before you borrow.
Two loans with the same headline rate can cost different amounts once fees and term length are added. That is why guides on this topic stress the total cost of borrowing rather than the rate alone.
If you are wondering how do small business loans work, a separate explainer walks through repayment, interest and typical lender checks in more detail.
SBA-backed loans
Chase’s guide explains that SBA loans are not made by the agency itself. The loans carry partial guarantees from the Small Business Administration, and the guarantee covers a portion of the loan amount.
The guarantee is a promise to the lender, not a gift to the borrower, so you still apply, qualify and repay. What changes is the lender’s exposure, which is why the guide says the program is designed to expand access to affordable financing for businesses.
The guide names the SBA 7(a), SBA Express and SBA 504 programs and says each type has different loan limits, uses and approval timelines. It also notes that the application process may require additional steps and documentation compared with some other loan options, as described on that page.
Because each program has its own limits, permitted uses and timelines, a loan that fits one purpose may not fit another. The longer wait and extra paperwork are trade-offs worth weighing against the lower down payment requirements and longer repayment terms the guide says these loans often feature.
An overview of what is an SBA loan explains the program in plain language. Programme rules change over time, so the official SBA pages are the place to confirm anything current.
Business lines of credit
Chase describes a business line of credit as flexible access to a set amount of capital. You draw funds when needed and only pay interest on the money you use, and repayment is only necessary when the first draw begins.
This structure differs from a term loan, where you receive the full amount at the start. With a credit line, unused capacity costs no interest, but it is also not guaranteed to stay available, so the lender’s terms matter.
Chase suggests a line of credit might be an alternative to a business loan if you need access to cash quickly for short-term purchases or higher priced projects. Whether that applies to you depends on how predictable your spending is and how disciplined the drawing and repayment will be.
The guide also says repayment terms are usually monthly, though some lenders may let you choose a schedule based on your cash flow. You can read more in business line of credit explained, which covers how credit limits and draws work.
Equipment financing
Chase says equipment financing can help businesses acquire machinery or technology through loans or leases secured by the equipment itself. Usually, equipment loans allow for 100% of the equipment cost to be financed, and terms vary by lender and equipment type, per the same guide.
The guide says this kind of financing allows you to buy items necessary to run and grow your business without affecting your immediate cash flow. It adds that the loan may also include extra funds as a buffer for soft costs such as shipping or materials needed to run the equipment, per Chase’s page.
Financing most of an item’s cost can ease the upfront burden, but it also means you owe repayments on something that may lose value or become outdated. Check how long the term runs compared with how long you expect to use the equipment.
Because the equipment itself backs the financing, the lender has something to claim if payments stop. The explainer on what is equipment financing looks at loans versus leases.
Funding that is not a conventional loan
Some funding does not look like a bank loan at all. These routes shift the trade-off from interest to eligibility, control or public attention.
Grants
Chase says grants provide non-repayable funds, usually distributed by government bodies, nonprofits or private companies to support designated industries or community growth. Business Initiative’s guide also describes grant funding as “free money” with no repayment required, though it adds that the process is competitive.
The catch is access. Chase notes that grant eligibility criteria are often stringent, competition may be high, and a grant’s terms and amount vary with the body issuing it, as set out in its guide. A dedicated page on business grants covers this area in more depth.
Crowdfunding
Chase explains that crowdfunding raises small investments from many individuals via online platforms or social media. Backers may receive promotional rewards, equity or long-term benefits, and like a grant there is no need to repay the funds.
The same guide warns that donors could scrutinise how a brand uses the money, and that success often depends heavily on marketing effectiveness and community engagement. The page on small business crowdfunding looks at the main models.
Equity from investors
Chase describes venture capital as investor funding exchanged for equity or ownership interest in your business. It says venture capital offers substantial funding and strategic support, but it entails sharing control and profits, and securing it typically requires a compelling business plan and scalable potential.
Business Initiative likewise lists equity financing as investment for ownership, with an equity exchange and an investor partnership. For the differences between early-stage and later-stage investors, see angel investors vs venture capital.
Faster and newer alternatives, and their trade-offs
Beyond banks, Business Initiative’s guide lists several other sources. Among them are alternative lenders, described as online lenders, fintech companies and non-bank lenders. It also lists specialty loans such as equipment financing, invoice financing and merchant cash advances, in its guide published Dec 17, 2025 and updated Oct 9, 2026.
These products often exist because a business does not fit a bank’s checklist, or needs a different repayment shape. That flexibility can come with a different cost structure, so the full cost deserves a careful read.
Revenue-based financing
Business Initiative describes revenue-based financing as capital provided in exchange for a revenue share, with percentage-based repayment and flexible terms. It lists “no equity dilution” among its characteristics and says ownership is retained.
The same guide points to terms such as a repayment percentage, a total repayment cap, term length and revenue thresholds. Those are the details to read closely in any contract, since they set what you will pay back overall.
Invoice-based and cash-advance products
Two products from that list tend to raise questions. The explainer on what is invoice factoring covers financing that relies on unpaid customer invoices.
Merchant cash advances are a separate category with their own pitfalls, and a dedicated article on merchant cash advance risks sets out what to examine before signing anything. Whatever the product, ask for the total repayment amount in writing and compare it with the amount you would receive.
How do you compare small business funding options?
Chase’s guide says selecting an option depends on your business, its needs and its financial outlook. Business Initiative’s guide offers a matching list of items to weigh. Put together, they suggest a simple order of questions.
- How much do you need? Chase says the amount of capital is often a deciding factor, and loans needing a significant amount of capital will typically take longer to get and require more documentation.
- What is the true cost? Business Initiative’s loan evaluation list includes comparing rates, assessing APR, evaluating total cost and considering the rate type.
- Which fees apply? The same list names origination fees, processing fees and prepayment penalties.
- What security is required? Its collateral list covers asset backing, personal guarantees and security requirements.
- How flexible is repayment? Chase notes that some lenders let you pick a schedule based on cash flow, but not all do.
- What are you giving up? Equity investors share control and profits, according to Chase, while grants and crowdfunding come with their own conditions.
Funding choices also connect to day-to-day money management. The wider hub on business finance covers budgeting, cash flow and related topics.
Chase also says having a positive history with the institution where you request a loan may help facilitate a smoother approval process, per its guide. Eligibility rules differ by lender, so a rejection from one provider does not predict the answer from another.
About this guide and where to read next
This is an independent informational and educational site. It is not affiliated with, endorsed by or connected to any lender, platform, agency or company mentioned, and it does not provide, arrange or broker funding, take applications or offer consulting.
Every figure above is attributed to the named guide, and each guide can change after this article was written. Terms, fees and rules vary by provider and country, so confirm them with the provider or an official agency.
Some owners choose to avoid outside capital altogether. The page on bootstrapping a small business explains what it means to fund growth from your own resources and revenue.
Frequently asked questions
What counts as small business funding?
Show answer
It is any money that helps a business start, run or grow. Chase’s guide lists loans, grants, venture capital, lines of credit, equipment financing and crowdfunding among the ways to do it.
Do grants have to be repaid?
Show answer
Chase’s guide describes grants as non-repayable funds. Eligibility is often stringent and competition may be high, so a grant is not an easy substitute for a loan.
Do SBA loans come directly from the SBA?
Show answer
According to Chase’s guide, participating lenders originate and fund the loans, while the SBA provides a guarantee for a portion of the loan amount. The guide’s page is undated, so check the SBA’s own pages for current program rules.
What is the difference between debt and equity funding?
Show answer
Business Initiative’s guide describes loan funding as borrowed money with repayment required and interest charged. It describes equity financing as investment in exchange for ownership, so the trade-off is repayment versus shared control.
This article is for general information and education only and is not financial, investment, tax or legal advice.
