A guide to six funding products for Union City, TN businesses: what a term loan and a credit line are, when equipment financing is a loan and when it is a lease, how a merchant cash advance differs, secured vs unsecured loans, and a table of every type.
A Business Term Loan Priced on an Obion County, TN Motel's Washers and Dryers
A business term loan pays out one sum, and the business repays it in equal installments over a set number of months. Every installment pays the interest due for the month and retires a slice of the principal.
An invented motel replaces four washers and four dryers for $24,000. Spread over 60 months at 10.75%, that comes to $518.83 monthly, or $31,129.80 by the final payment; $7,129.80 of the total is interest. Obion County, TN had 12 traveler accommodation establishments with a payroll in 2023 (County Business Patterns). The term loans page follows a schedule from the first payment to the last.
A Business Line of Credit Behind a Union City, TN Auto Repair Shop's Parts Runs
A business line of credit sets a ceiling on borrowing, and the owner takes money out against it when a bill comes in. Interest is charged on what has been taken out, not on the whole ceiling, and each repayment reopens room under it.
An invented auto repair shop with a $20,000 limit draws $3,500 for brake parts and filters, then repays it 30 days later. At 14.0% a year, that draw costs $40.27 in interest, plus any draw or yearly fee the partner charges. The credit line page covers draw periods and what a partner may review. The records an invented dry cleaner pulls together before a line opens are in the credit line setup article.
Equipment Financing as a Loan or a Lease: a Union City, TN Dental Office and Its Panoramic X-Ray
Sometimes. An equipment loan, or an equipment finance agreement, is debt: the dental office owns the panoramic X-ray unit, and the lender holds a lien until the balance is paid. A true lease is different. The leasing company owns the unit, the office pays to use it, and at the end it may return it, renew or buy it.
Which one fits depends on how long the office plans to keep the machine and what it wants on its books. Obion County, TN had 10 offices of dentists with a payroll in 2023, per County Business Patterns. The equipment financing page sets a finance agreement beside a loan on a law office's scanners and copiers.
Merchant Cash Advance Basics: a Share of Future Card Sales, Priced by a Factor
A merchant cash advance pays a lump sum now, and the funding source collects an agreed share of each day's card sales until a fixed total is remitted. Its cost is set as a factor, not an annual interest rate, and it is a purchase of future receipts rather than a loan.
In an invented case, a convenience store takes $10,000 priced with a 1.30 factor, so $13,000 goes back to the funding source. With a 10% holdback on $900 of daily card sales, about $90 a day is collected, which takes roughly 145 business days. Weaker card days stretch that time out, and stronger ones shorten it. The merchant cash advance page shows how to work out a factor rate from the total an offer would collect.
Secured vs Unsecured Business Loan: Does a Union City, TN Restaurant Pledge Its Paid-Off Kitchen Equipment?
A secured loan is backed by something the lender can claim if payments stop: equipment, inventory, receivables or a vehicle. An unsecured loan rests on the business's revenue and the owner's credit, and it can carry a higher rate or a shorter term because the lender has nothing specific to claim.
A sit-down restaurant that owns its ranges, walk-in cooler and dish machine outright may offer them as collateral for a larger amount. Pledging them means a lien on that equipment until the loan is repaid, and selling any of it may need the lender's consent. A partner may also file a general lien on business assets for a loan described as unsecured, so read the security section of any offer. The secured or unsecured article adds blanket and single-machine UCC filings and the steps to release a lien.
Types of Commercial Loans Compared by Payment Pattern, Term and What Backs Them
The table sets the six types next to each other. Rates, fees and terms come only from a funding partner's written offer. The industries page matches these products to the costs of particular trades.
| Type | How the money goes back | What often backs it |
|---|---|---|
| Business term loan | Equal monthly installments over a set term | Business assets, or revenue and credit |
| Business line of credit | Interest on the amount drawn; the balance can be repaid and redrawn | Revenue and credit, sometimes receivables |
| Working capital loan | Short schedule, monthly, weekly or daily | Revenue and bank deposits |
| Equipment loan | Monthly payments over the machine's useful life | The machine itself |
| Inventory financing | As stock sells, or on a fixed schedule | The inventory |
| Merchant cash advance | Daily card-sale holdback until the agreed total is collected | Future card receipts (not a loan) |
By Larkwood Lenders · Updated
