Free Tool
Business Loan Comparison Calculator
Enter your funding amount and monthly revenue to compare SBA loans, merchant cash advances, invoice factoring, and lines of credit — side-by-side with true APR and total cost.
Your Funding Scenario
Lowest total cost for your scenario
Invoice Factoring — saves $16,000 vs the most expensive option
Total interest/fees: $1,500 · APR: 42.4%
SBA 7(a) Loan
Traditional Bank Loan
Monthly payment
$1,069
Total interest/fees
$14,111
Effective APR
10.3%
Cost rating
Low cost
Pros
- ✓Lowest interest rate available
- ✓Longest repayment terms (up to 10 years)
- ✓No prepayment penalty on variable rates
Cons
- ✗Requires strong credit (680+)
- ✗2–3 month approval process
- ✗Collateral often required
Best for
Established businesses with good credit seeking low-cost capital
Merchant Cash Advance
Revenue-Based Financing
Monthly payment
$3,750
Total interest/fees
$17,500
Effective APR
23.3%
Cost rating
Moderate
Pros
- ✓Funded in 24–48 hours
- ✓No fixed monthly payment
- ✓Bad credit OK (500+)
Cons
- ✗Extremely high effective APR (50–300%+)
- ✗Daily repayment from bank account
- ✗No benefit to paying early (factor rate is fixed)
Best for
Short-term emergency funding only — avoid if any alternative exists
Invoice Factoring
Asset-Based Financing
Monthly payment
$25,750
Total interest/fees
$1,500
Effective APR
42.4%
Cost rating
High cost
Pros
- ✓Approval based on customer credit, not yours
- ✓No debt on balance sheet
- ✓Scales with revenue
Cons
- ✗Only works if you invoice B2B clients
- ✗Customers may see your lender
- ✗Net-30/60 invoices only
Best for
Trucking, staffing, and B2B businesses with outstanding invoices
Business Line of Credit
Revolving Credit
Monthly payment
$4,625
Total interest/fees
$5,500
Effective APR
11.0%
Cost rating
Low cost
Pros
- ✓Draw only what you need, when you need it
- ✓Interest only on drawn amount
- ✓Reusable as you repay
Cons
- ✗Lower limits than term loans
- ✗Variable rate tied to prime
- ✗Annual renewal required
Best for
Managing seasonal cash flow gaps and short-term working capital
Side-by-Side Summary
| Option | Monthly | Total cost | APR | Total repay |
|---|---|---|---|---|
| 🏦 SBA 7(a) Loan | $1,069 | $14,111 | 10.3% | $64,111 |
| 💳 Merchant Cash Advance | $3,750 | $17,500 | 23.3% | $67,500 |
| 📄 Invoice Factoring | $25,750 | $1,500 | 42.4% | $51,500 |
| 🔄 Business Line of Credit | $4,625 | $5,500 | 11.0% | $55,500 |
Exploring your funding options?
Today's funding climate score reflects real Federal Reserve data on lending conditions. When you're ready to research specific options, these resources provide unbiased, official guidance.
SBA Lender Match — SBA.gov
Find SBA-approved lenders free
Business Loan Marketplace — Lendio
Compare 75+ lenders
CFPB Small Business Resources
Official consumer protection guidance
Links marked "Sponsored links" may earn us a referral fee at no cost to you. We only link to established lenders and official government resources. This is not a recommendation to use any specific lender. See our disclosures.
How to Choose the Right Funding Option
The calculator above shows the math — but choosing the right funding option also depends on your situation. Here's how to read the results:
If APR is under 15%: SBA Loan
SBA 7(a) loans are the gold standard for small business financing. If you qualify — credit score 680+, 2+ years in business, $100K+ in revenue — there is almost no reason to pay more. The approval process takes 60–90 days, but the savings are typically $20,000–$50,000 over the life of a loan compared to alternative options.
If you invoice B2B clients: Invoice Factoring
Factoring is not a loan — it's an advance on invoices you've already earned. Approval is based on your customers' creditworthiness, not yours. This makes it the best option for trucking companies, staffing agencies, and manufacturers with net-30 or net-60 payment terms. Effective APR on factoring (15–40%) is usually far lower than MCA.
For short-term cash gaps: Line of Credit
A business line of credit is the most flexible option. You only pay interest on what you draw, and you can reuse it as you repay. Best for seasonal businesses or those with predictable but lumpy cash flow. Rates are higher than SBA loans but typically far lower than MCAs.
Avoid MCAs unless it's an emergency
Merchant cash advances carry effective APRs of 50–300%+. The daily repayment structure can trap businesses in a cycle of re-borrowing. The only justified use case: you have a time-sensitive opportunity with a return that exceeds the MCA cost, and you cannot get approved for any other product in time.
Estimates are illustrative and based on typical market rates. Actual rates, terms, and eligibility vary by lender. Not financial advice. Full disclaimer →