Wheatmead Funding, a small-business funding broker in Eau Claire, Wisconsin, compares six funding structures here: working capital, term loans, lines of credit, inventory financing, equipment financing and merchant cash advances. The table shows how each is repaid or collected and what it suits, so Chippewa Valley owners can shortlist before calling.
The six structures in one view
| Structure | How it comes back | Suits | Usually secured by |
|---|---|---|---|
| Working capital | Installments that finish within months | Wages, supplier bills, rent during a gap | Partner's choice; often a lien on all assets plus the owner's guarantee |
| Term loan | Regular payments spread over several years | Fit-outs, moves, expansion, refinancing | Business assets, sometimes property |
| Line of credit | Repay what you draw; the limit reopens | Costs that recur at uneven times | Invoices, a blanket lien, or nothing specific |
| Inventory financing | Paid down as stock sells | Large stock purchases ahead of sales | The inventory itself |
| Equipment financing | Installments or lease payments | Ovens, coolers, fixtures, tools, vans | The equipment |
| Merchant cash advance | Collected as a share of sales (not a loan) | Card-heavy businesses wanting sales-linked collection | Future receipts that are sold |
Short horizon or long horizon
The cleanest test is how long the money stays out. If the cost clears within months, such as wages before a large invoice is paid, a short structure like working capital or a draw on a line fits. If the thing you buy keeps earning for years, such as a kitchen line or a store fit-out, a longer term keeps each payment smaller than the value the asset produces.
Mismatches cost owners twice: a short structure for a long asset squeezes cash every month, and a long structure for a short gap keeps you paying for something already used up.
Collateral: secured and unsecured funding
Some do and some do not. Secured funding is backed by something the partner can claim if payments stop: the equipment being bought, the inventory, receivables, or a general lien on business assets. Unsecured funding has no specific asset behind it, but partners often still ask for a personal guarantee from the owners.
The difference between secured and unsecured business loans usually shows in three places: how much a partner will consider, the price, and what happens if the business cannot pay. Ask any partner to name, in writing, what it is taking as security and whether it files a UCC financing statement.
Where the SBA fits
SBA-backed loans are made by participating lenders, not by brokers, and they follow the SBA's own programs. Wheatmead Funding stays out of SBA lending altogether. If an SBA route suits your plan, a participating lender or the free advisers listed in our Chippewa Valley resources guide are the place to start.
What any partner reads first
- Bank statements covering the latest months of trading.
- How long the business has operated.
- What the money will pay for and how that cost earns or saves money.
- Existing loans, leases and advances still being paid.
- Returns and financial statements once the request is large or long-dated.
- Owner credit history, which most partners check.
Each partner weighs these differently, and none of them is a pass mark on its own.
By Wheatmead Funding ยท Updated