When business owners compare funding options, the hard part is that each is priced and structured differently — a factor rate is not an APR, an advance rate is not a cost, and speed varies from a day to months. This guide sets out representative benchmarks for the main options so you can compare them on the same footing. Every figure here is a typical range for general reference, not an offer or a guarantee; actual terms vary by business, industry, and underwriting.
How to read these benchmarks
Cost is expressed the way each product actually prices — APR for loans and lines, a factor rate for MCAs, and a fee for factoring — because converting between them can mislead. Speed is time from a complete application to funding. Qualifying notes what underwriters weigh most. Public data on small business financing conditions is published periodically by sources like the Federal Reserve Small Business Credit Survey and the SBA; the ranges below reflect common market practice rather than any single dataset.
Merchant cash advance / revenue-based funding
Cost: priced as a factor rate, commonly around 1.1 to 1.5 times the advance, not an APR. Speed: often a same-day decision with funding in 24 to 72 hours. Amount: frequently sized as a fraction of monthly revenue, typically for businesses doing $50,000 or more a month. Qualifying: weighted toward revenue and bank-statement strength over credit score. Best for: fast capital for a specific need, or businesses with uneven or seasonal revenue, since remittance flexes with sales. An MCA is the purchase of future receivables, not a loan.
Invoice factoring
Cost: a factoring fee, commonly a low single-digit percentage of the invoice. Advance rate: typically 80 to 95% of the invoice up front (freight often 90 to 97%; construction usually lower). Speed: often set up in days and funding invoices within a day. Qualifying: based mainly on the creditworthiness of the customers you invoice, not your own credit. Best for: businesses with slow-paying B2B, government, or commercial customers — trucking, staffing, construction, manufacturing, and distribution.
Business line of credit
Cost: an APR on the balance you draw, generally lower than MCA or factoring cost when you qualify. Speed: days to weeks depending on lender. Qualifying: underwritten on your business and personal credit, time in business (often two-plus years), and financials. Best for: flexible, lower-cost access to capital for general needs when you have credit strength.
Term loan
Cost: an APR, with fixed installments — usually the cheapest option per dollar when you qualify. Speed: slower and more selective, often weeks. Qualifying: strong credit, time in business, financials, and often collateral. Best for: established, stable businesses funding a defined investment with predictable payments.
Equipment financing
Cost: an APR (or a lease factor), with the equipment as collateral. Speed: days to a couple of weeks. Amount: typically the equipment cost less a down payment, spread over the asset's useful life. Qualifying: eased by the collateral, though newer businesses may face higher down payments. Best for: buying trucks, machinery, or other business equipment while keeping working capital free.
Hard money (real estate)
Cost: higher than conventional real estate financing, priced for speed, usually interest-only. Leverage: commonly around 65 to 75% of value, with renovation loans measured against after-repair value (ARV), often up to 70 to 75% of ARV including rehab. Term: typically 6 to 24 months. Qualifying: asset-based — the property and the deal — with entity borrowers standard. Best for: real estate investors on fix-and-flip, bridge, DSCR-refinance, or construction deals who need to close in days. Loans are business-purpose on non-owner-occupied investment property.
Using benchmarks to choose
Start with the problem, not the rate. If customers pay slowly, factoring fixes it at the source. If you need a defined lump sum and have strong credit and time, a term loan or line is cheapest. If you need speed or your revenue is uneven, revenue-based funding fits. If you are buying an asset, finance the asset. And if it is an investment property, hard money is built for the timeline. The cheapest capital on paper is only relevant if you can actually get it in the time you have. Not all applicants qualify for any given option.