A catering contract that pays later fits one type, a rig generator another; a request for any of them goes to funding partners who review it.
Each funding type here is matched to a kind of bill. This page covers payments already owed, the six types side by side, term loans, credit lines, equipment loans and leases, and merchant cash advances, with an invented advance and an invented loan payment.
Payments already leaving the account: what an Alice, TX retailer brings to the call before a second request
Before a second request goes out, the call covers what the business already pays each month. For an Alice, TX retailer, that list can read:
- Each loan payment, with the lender and the balance left
- Lease payments on equipment or fixtures
- Any merchant cash advance and its daily or weekly collection
- Credit line balances and the limit on each line
A funding partner may weigh those payments against the store's deposits before it offers anything more, and an older loan can also leave a filing on record. An article on UCC filings and how they are released covers those filings, and another compares credit unions, community banks and online lenders.
From payroll to card sales: each funding type on this site and the bill it pays in Jim Wells County, TX
- Working capital loan: a lump sum for operating bills, paid back on a short fixed schedule
- Business term loan: a lump sum for something that lasts, paid back over months or years
- Business line of credit: a limit drawn as bills arrive, with interest only on what is drawn
- Inventory financing: money tied to stock bought for resale
- Equipment financing: a loan or lease for a named machine, which stands as the collateral
- Merchant cash advance: a sum paid against future card sales and collected as a share of each day's sales; not a loan
An oilfield service company and a clothing store in Jim Wells County, TX can face different bills in the same week. County Business Patterns counted 54 employer establishments in the county under NAICS 213112, support activities for oil and gas operations, in 2023.
Business term loan basics through a Jim Wells County, TX auto shop's parts washer and diagnostic scanner
A business term loan pays out one lump sum and is paid back in fixed installments over a set number of months, with interest on the balance still owed. It fits a purchase with a known price and a working life longer than the loan.
In a Jim Wells County, TX auto shop, a parts washer and a diagnostic scanner bought together are that kind of purchase: the price comes from one quote, and the tools keep working after the last payment. Automotive repair and maintenance was a small-shop trade in the county in 2023: 12 of its 18 employer establishments had fewer than five employees (County Business Patterns, NAICS 8111).
The business term loans page works through a second store's equipment, a physician office's screening equipment and a backhoe at two term lengths.
A business line of credit is a limit to draw on: supplier payments at an Alice, TX retail store
With a business line of credit the partner fixes a ceiling, and each draw is sized to the bill in front of the owner. Interest runs on the drawn balance; as the balance is paid down, that room can be drawn again while the line stays open.
For an Alice, TX retail store with supplier payments due on different dates each month, the line can carry each invoice from its due date until the stock sells, without a new request each time. Any fee for drawing and the date the line comes up for review are set in the partner's offer.
The business lines of credit page runs a wholesaler's tax bill and an insurance premium through a line with invented figures.
A combi oven and a host-stand pager system at an Alice, TX sit-down restaurant: owned at the last payment, or handed back
Equipment financing is a loan when the business owns the equipment from the start and the lender keeps a lien until the last payment. It is a lease when the lessor owns it and the business pays to use it, with a purchase option at the end on some leases.
For an Alice, TX sit-down restaurant replacing its combi oven and a host-stand pager system, the difference shows up after the last payment: with a loan, the oven and pagers belong to the restaurant; with a lease, they go back or are bought at the price the lease sets. The home page puts a loan and a lease on a reach-in freezer side by side with invented figures.
A fryer repair bill at an Alice, TX quick-service restaurant, carried by card-sales collections
A merchant cash advance is the purchase of part of a business's future card sales: a provider pays a sum now and collects a fixed share of each day's card sales until a set total is reached. Because the provider is buying receivables rather than lending, the price is a factor applied to the advance, not an interest rate charged over time.
Illustration only, invented figures: an Alice, TX quick-service restaurant facing a fryer repair bill takes an $8,600 advance at a 1.29 factor with an 11.5% holdback. Multiplying out the invented factor, the provider collects $11,094.00 in total, which puts the cost of the advance at $2,494.00 by our arithmetic.
If card sales in this invented example average $1,040 a day, the holdback collects $119.60 a day and the total is reached after 93 business days; days with fewer card sales stretch that out.
For scale, County Business Patterns put limited-service restaurants (NAICS 722513) at 30 employer establishments in Jim Wells County, TX for 2023, with 699 employees on their payrolls.
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