Aspenhollow Business Capital, based in Olympia, WA, compares six funding options for Thurston County owners: working capital, term loans, lines of credit, inventory financing, equipment financing and merchant cash advances. Each is set out by repayment style, common uses and what partners tend to review, so the request goes to the right kind of partner.
The six options by repayment style
| Option | How it is paid back or collected | Common uses | What it is usually tied to |
|---|---|---|---|
| Working capital | Fixed payments over a short term, often weekly or monthly | Payroll, supplier bills, a tax payment | Business cash flow; sometimes a general lien |
| Term loan | Fixed installments over a set term | Remodel, build-out, second location | Business assets, sometimes real estate |
| Line of credit | Interest on drawn balances; repaid and redrawn | Uneven months, recurring gaps | Receivables or general business assets |
| Inventory financing | Repaid as stock sells or on a schedule | Stock bought ahead of demand | The inventory itself |
| Equipment financing | Fixed payments; lease or loan | Machines, vehicles, chairs, kitchen lines | The equipment |
| Merchant cash advance | A share of future card or bank receipts is remitted | Short needs in card-heavy businesses | Future receivables; not a loan |
What can you use a business loan for, and does the purpose change the structure?
Almost any business purpose, but the purpose decides the structure. Short gaps (payroll, a supplier invoice, a quarterly tax bill) suit short money that is gone again in months. Long-lived assets (an oven, a vehicle, tenant improvements) suit money repaid over the years the asset earns. Paying for a long-lived asset with short money squeezes cash every week; paying for a payroll week with a five-year loan leaves you carrying the cost long after the gap closed.
Money-purpose sections on each page go deeper: using working capital for payroll, buying inventory ahead of sales, used, restaurant and contractor equipment, seasonal swings and expansion or a second location.
What are the four types of business loans owners hear about?
The field is sometimes described as four main types: term loans, lines of credit, equipment financing and short-term working capital. Inventory financing is a close relative of the second and third, secured by stock instead of machines. A merchant cash advance sits outside the list entirely, because it is a sale of future receipts and not a loan at all.
Short-term vs long-term business loans: match the money to the life of the purchase
Short-term funding is repaid over months, often with weekly or daily payments, and is sized to cash that will come back soon. Long-term funding is repaid over years with monthly installments and is sized to an asset or a project that keeps earning. The question to ask is not which is cheaper per payment but which matches the life of what you are paying for. A partner will ask the same question.
Secured vs unsecured business loans, and what you sign either way
Secured funding is tied to something specific: the equipment, the inventory, receivables or real estate. Unsecured business funding has no specific asset behind it, but a partner may still ask for a personal guarantee or file a general lien on business assets. Read each agreement for both. The names on the paperwork matter less than what you are signing over.
Washington state small business loans are not a separate product; Washington businesses use the same six structures. What changes is the paperwork behind the request, which the Washington records guides cover.
Common items in a partner's review
- Business bank statements, usually several recent months
- How long the business has operated and its legal structure
- Revenue and how steady it is
- Existing debts, liens and advances
- Owner credit, for most products
- The purpose of the money
No partner publishes a single threshold, and requirements vary by product and partner. The industry pages explain what tends to matter in each kind of business.
By Aspenhollow Business Capital · Updated