The E-Myth Revisited

What is the difference between an SBA loan and a traditional bank loan?

SBA loans are partially guaranteed by the Small Business Administration, which reduces risk for lenders and often results in lower interest rates and longer repayment terms. Traditional bank loans have no government backing but may fund faster. SBA loans typically take 30-90 days to close versus 1-3 weeks for conventional bank loans.

What is the difference between a business line of credit and a term loan?

A term loan gives you a lump sum repaid in fixed installments over a set period. A line of credit provides flexible access to funds up to a limit — you only pay interest on what you draw. Lines of credit work best for managing cash flow gaps, while term loans suit specific one-time investments like equipment purchases.

What are the best business loan options with bad credit?

Online lenders like Fundbox, BlueVine, and OnDeck work with credit scores in the 500-600 range. Microloans from nonprofit organizations like Kiva or Accion are another option. Expect higher APRs (15-40%) and shorter terms. Improving your score by even 30-50 points before applying can unlock significantly better rates.

What is the difference between secured and unsecured business loans?

A secured business loan requires collateral — business equipment, real estate, inventory, or accounts receivable that the lender can seize if you default. Unsecured loans require no collateral but carry higher interest rates because the lender assumes more risk. Most SBA loans are secured; many online lender products are unsecured. Secured loans typically offer better rates and higher limits.