Glenford Financial, a small-business funding broker in San Angelo, TX, compares six funding types by what they pay for and how they are repaid: working capital, term loans, lines of credit, inventory financing, equipment financing and merchant cash advances, which are not loans. Lending partners, not Glenford, approve requests and set rates and terms.
Six funding types, compared by how the money goes back
| Type | Pays for | How it goes back | Often secured by |
|---|---|---|---|
| Working capital | Payroll, rent and materials during a timing gap | Short-term fixed installments | Business assets, a lien or a personal guarantee, depending on the partner |
| Term loan | A defined project or purchase | Fixed payments over a set term | Business assets or real estate; sometimes unsecured |
| Line of credit | Recurring costs of varying size | Payments on what you have drawn; repaid room can be drawn again | Receivables, inventory or a general lien, or unsecured |
| Inventory financing | Stock bought before it sells | Reduced as stock sells, or by installments | The inventory itself |
| Equipment financing | One identified machine, vehicle or system | Fixed payments over the equipment's useful life | The equipment |
| Merchant cash advance, not a loan | Short-term needs for card-heavy businesses | Remitted from a share of sales or by fixed debits until the purchased amount is collected | Future receipts the funder bought; personal guarantees are common |
Three questions that narrow it down
- Is the need one-time or recurring? A single purchase points toward a term loan or equipment financing. Costs that return every month point toward a line of credit.
- How long will the thing you are paying for keep earning? Match the repayment period to that. Paying for a five-year machine over two years squeezes cash flow; paying for this month's payroll over five years means interest long after the benefit is gone.
- How does revenue arrive? Invoices paid on 30- or 60-day terms, daily card sales and seasonal contracts each suit a different repayment pattern. A partner will ask, so have the answer ready.
Short-term and long-term business financing
Short-term funding, such as working capital, many lines of credit and merchant cash advances, fills gaps measured in weeks or months. It is usually repaid quickly, often by weekly or even daily debits, and its total cost should be compared in dollars, not just as a rate. Long-term funding, such as term loans and equipment financing, pays for things that earn over years and is repaid on a monthly schedule. Using short-term money for a long-term purpose is one of the most common ways a business ends up refinancing under pressure.
Secured, unsecured and the UCC filing
Secured funding is backed by specific collateral, such as equipment, inventory or receivables, and the partner can claim that collateral if the agreement is breached. Unsecured funding has no specific collateral, but partners often still ask the owners for a personal guarantee, which puts personal assets at stake. Either way, many partners file a UCC financing statement with the Texas Secretary of State to record their claim. The Texas UCC guide shows how to check what is already on file against your business, because an existing blanket lien can shape what a new partner will offer.
Where SBA loans and bank loans fit
SBA-backed loans are made by SBA-approved lenders, with requirements set by the SBA program and by the lender. They are not among the six funding types Glenford Financial covers. The U.S. Small Business Administration lists Tom Green County among the counties served by its San Antonio District Office (sba.gov, accessed 2026-10-15), and the Angelo State University Small Business Development Center at 69 N. Chadbourne St. in San Angelo, TX offers SBA-funded advising. If your own bank or credit union already knows your business, ask it too; comparing a bank's answer with a partner's offer is sensible, not disloyal.
When a business card is enough
A business credit card suits small, frequent purchases you can pay off within the billing cycle. A loan or line of credit usually suits larger amounts carried for months, because the repayment is planned. What can you use a business loan for? Most legitimate business purposes, from equipment and stock to payroll and expansion, but each partner states permitted uses in the agreement, and personal spending is not one of them.
Documents partners tend to request
- Recent business bank statements, often the last several months
- Business tax returns and, for larger requests, financial statements
- Proof the business exists and is active, such as its Texas Secretary of State record
- A list of existing debts and advances, with balances and payments
- Quotes or invoices for equipment, or an accounts receivable report for working capital
Requirements differ by partner and by type of funding.
By Glenford Financial · Updated