Funding types
14 ways to pay for it
What each kind of funding is, what it really costs per year, how fast the money comes, who qualifies and where it breaks. Yearly costs are typical ranges: for loans and cards they're interest rates before any fees, and for the rest they're worked out the way an APR is, from the fees and how fast it's repaid.
Not sure where to start? Funding Fit narrows it down in about a minute. Updated November 6, 2026.
Your own money and customers
| Kind | Typical yearly cost | Money in |
|---|---|---|
| Your own cash Savings or profits the business has kept. No interest and nobody else's terms, as long as it doesn't leave you short. Yearly cost 0% · money in today | 0% | Today |
| Friends and family Money from people who know you, as a loan or a share of the business, on terms you agree together. Yearly cost about 0–5% · money in days to weeks | about 0–5% | Days to weeks |
| Presales, gift cards and store credit Customers pay now for something delivered later: preorders, gift cards, memberships or season shares. Yearly cost 0% at full price · money in weeks | 0% at full price | Weeks |
Loans
| Kind | Typical yearly cost | Money in |
|---|---|---|
| Bank loans and lines of credit A lump sum repaid monthly (a term loan) or a credit limit you draw on and repay (a line). Usually the cheapest borrowed money, if you qualify. Yearly cost about 7–11% · money in 2–8 weeks | about 7–11% | 2–8 weeks |
| SBA loans: 7(a), 504 and microloans Loans from banks and nonprofit lenders, partly guaranteed by the U.S. Small Business Administration, with longer terms and capped rates. Yearly cost about 7–13.5% · money in 1–3 months | about 7–13.5% | 1–3 months |
| Community lenders (CDFIs) and local programs Mission-driven lenders and public programs that can fund businesses banks turn down, often with free help attached. Yearly cost about 7–13% · money in weeks to 2 months | about 7–13% | Weeks to 2 months |
Cards and equipment
| Kind | Typical yearly cost | Money in |
|---|---|---|
| Business credit cards and 0% offers A revolving credit line on a card. Free for a year or so on a 0% offer, expensive after that. Yearly cost about 13–29% · money in days to 2 weeks | about 13–29% | Days to 2 weeks |
| Equipment and vendor financing A loan or lease for a specific machine, oven or vehicle, secured by the equipment itself. Yearly cost about 6–22% · money in days to 2 weeks | about 6–22% | Days to 2 weeks |
Repaid from sales or invoices
| Kind | Typical yearly cost | Money in |
|---|---|---|
| Merchant cash advances (MCAs) and processor capital An advance repaid from a share of your daily sales for a flat fee. Offered in a click, and expensive per year when paid back fast. Yearly cost about 23% to over 130% · money in 1–3 days | about 23% to over 130% | 1–3 days |
| Revenue-based financing Money repaid from a share of monthly revenue until a fixed multiple is paid back, with no set end date. Yearly cost about 18–51% · money in days to weeks | about 18–51% | Days to weeks |
| Invoice factoring and financing Cash now for invoices your business customers haven't paid yet, by selling them or borrowing against them. Yearly cost about 12–61% · money in 1–3 days after setup | about 12–61% | 1–3 days after setup |
From your community
| Kind | Typical yearly cost | Money in |
|---|---|---|
| Community raises (Regulation Crowdfunding) Customers and the public lend to or invest in your business through a registered online platform, under SEC rules. Yearly cost about 13–25% · money in 1–4 months | about 13–25% | 1–4 months |
| 0% crowdfunded microloans (Kiva) 0% loans of $1,000–$15,000, crowdfunded by people who lend $25 or more, starting with your own network. Yearly cost 0% · money in 2–3 months | 0% | 2–3 months |
Free money
| Kind | Typical yearly cost | Money in |
|---|---|---|
| Grants and pitch competitions Money you don't repay, from research programs, states, cities, foundations and pitch competitions. Free, but slow and competitive. Yearly cost 0% · money in months | 0% | Months |