Key takeaways
- There is no universally best funding product — only the best match between the money's term, cost, and speed and the job you need it to do.
- SBA loans are the cheapest meaningful capital most small businesses can access; the price of that price is 30–90 days and heavy qualification.
- Bank term loans sit in the middle: good rates and real amounts, but most small-business applicants are declined, especially young businesses.
- MCAs are the most expensive of the four and the fastest, approving on revenue rather than credit and funding in 24–48 hours.
- Credit cards are for small recurring spend you can pay monthly — they are a cash-flow cushion, not a capital source.
Four tools, four different jobs
Most small-business borrowing runs through four channels: merchant cash advances, conventional bank term loans, SBA-guaranteed loans, and business credit cards. Owners often ask which is best. That is the wrong question — they are different tools, and each one is the right answer to a different problem.
The honest hierarchy on cost alone is simple: SBA is cheapest, then bank loans, then credit cards (if carried), then MCAs. The hierarchy on speed runs exactly in reverse. Nearly every funding decision is a trade along that line — how much is it worth to have the money this week instead of this quarter?
We sell MCAs and other fast products at Broadway Advance, and we will be straight with you here: if you can qualify for an SBA loan and the opportunity can wait 90 days, take the SBA loan. This guide is for figuring out where on the line your situation actually sits.
The head-to-head table
Here is the whole comparison in one view. Figures are typical ranges, not promises — every funder, bank, and program differs, and your file determines your offer.
| MCA | Bank loan | SBA | Credit card | |
|---|---|---|---|---|
| Funding speed | 24–48 hrs | 2–6 weeks | 30–90 days | 1–2 weeks to open |
| Typical amounts | Up to $2M | $50K–$5M | Up to $5M (7(a)) | $10K–$100K limits |
| Cost | Highest — factor 1.10–1.50 | Moderate | Lowest of the four | High if carried, free if paid monthly |
| Credit needed | Flexible — revenue-based | Good to excellent | Good, plus eligibility rules | Good personal credit |
| Paperwork | 1 form + 3 mo bank statements | Financials, tax returns, collateral | Extensive — business plan, projections, years of returns | Short application |
| Best for | Fast opportunities, emergencies, bridge needs | Established firms with time and strong financials | Major long-term investments at the lowest cost | Small recurring purchases, float, building credit |
See your real number in about five minutes.
Apply nowSpeed and paperwork: the real divider
Speed differences between these products are not marginal — they are orders of magnitude. An MCA application is one short form and three months of bank statements; at Broadway Advance that means a soft credit pull, a same-day decision, and funding in 24 to 48 hours. A bank loan typically takes two to six weeks. An SBA loan typically takes 30 to 90 days from application to funded.
The paperwork burden scales with the timeline. SBA underwriting commonly wants multiple years of business and personal tax returns, financial statements, a business plan with projections, debt schedules, and collateral documentation. Banks want most of that. A card issuer wants a short application and your personal credit. An MCA funder mainly wants to see your deposits.
Neither end of the spectrum is wrong. Deep underwriting is why SBA money is cheap; light underwriting is why advance money is fast and expensive. The question is what your situation can afford — in time, not just dollars. A signed contract that starts Monday cannot wait on a 60-day review.
Cost: the honest ranking
On price, SBA wins and it is not close. SBA 7(a) rates are pegged to a base rate plus a capped spread, amortized over years — the cheapest substantial capital most small businesses will ever touch. Bank term loans run somewhat higher. Both are dramatically cheaper per year of money than an advance.
Business credit cards are a special case: carried month to month, their interest rates are high and the balance compounds; paid in full inside the grace period, the money is effectively free. A card is the cheapest product on this list or one of the most expensive, depending entirely on your discipline.
MCAs are the most expensive of the four, and we say that as a firm that sells them. A $50,000 advance at 1.20 costs $10,000 over a term measured in months. That premium buys speed, certainty, and approval without strong credit. When those things are worth more than $10,000 — a dying freezer, a discounted inventory buy, a contract that needs payroll fronted — the advance is rational. When they are not, it is not.
Credit requirements and approval odds
Banks decline the majority of small-business loan applicants, and the declines cluster predictably: businesses under two years old, owners with credit scores below roughly 680, thin collateral, and 'risky' industries like restaurants, trucking, and construction. SBA programs widen the door somewhat — the guarantee lets lenders accept files banks would refuse — but credit, eligibility rules, and full documentation still apply.
Business credit cards key on the owner's personal credit. Good personal credit gets a card even for a brand-new business, which makes cards the most accessible product on this list — but with limits typically in the five figures, they cannot fund anything substantial.
MCA underwriting inverts the model: revenue first, credit second. A business depositing $60,000 a month with a 580-score owner is fundable; a 780-score owner with no revenue is not. This is the structural reason advances exist — they serve the large population of genuinely healthy businesses that bank underwriting screens out. Our brand line, 'when the banks say no, we say yes,' is a description of exactly this population.
Best use cases for each
Match the tool to the job and most of the decision makes itself.
- MCA — time-critical needs where the return beats the cost: emergency equipment replacement, discounted inventory with a deadline, fronting payroll on signed work, seasonal ramp-up before a peak.
- Bank term loan — established businesses with solid financials funding expansion, renovation, or refinancing on a multi-year horizon, with weeks of lead time available.
- SBA loan — the big, plannable moves: buying real estate or a business, major build-outs, large equipment packages — anything where the lowest rate over the longest term matters more than speed.
- Business credit card — recurring operating spend (supplies, software, fuel, travel) paid in full monthly, plus a modest float cushion and a way to build business credit history.
Combining tools sensibly
Healthy businesses often run several of these at once, and that is fine when each tool is doing its own job: an SBA loan financing the building, a card handling monthly spend, and occasionally an advance bridging a short gap. Layering is not the problem — mismatching is.
Two combinations deserve a warning. Never carry growing card balances while also repaying an advance — that is two expensive obligations compounding against the same cash flow. And never stack multiple MCAs on top of each other; taking a second advance to service the first is the single fastest route to failure in this industry, and any funder who encourages it is not on your side.
A sound sequencing strategy for a young business: card first for spend and credit-building, revenue-based funding when speed matters and banks are not yet an option, then graduate to bank and SBA money as your financials and time-in-business mature. Each rung gets cheaper as your file gets stronger.
How to decide, in five questions
Run your situation through five questions. How fast do you truly need the money — is there a real deadline, or just impatience? How long will the money work — months or years? What does your file support — time in business, revenue, credit? What is the return — does the project's payoff exceed the cheapest cost of capital you can actually get in time? And what payment structure fits your revenue — fixed monthly, or flexing with sales?
If the answers say 'no deadline, multi-year asset, strong file' — go to a bank or an SBA lender, and do not let anyone, including a fast funder, talk you out of it. If they say 'days, not weeks; months, not years; revenue strong, credit thin' — revenue-based funding is built for exactly that shape.
Broadway Advance has funded over $120 million since 2014 across 65 industries, and beyond MCAs we place term loans up to $5 million, business lines of credit, asset-based lending, and equipment financing up to 100 percent of cost. Bring us the five answers and we will tell you which tool fits — even when the honest answer is one we do not sell.
Frequently asked questions
Is an SBA loan always the best option if I qualify?
On cost, almost always — SBA rates and terms beat the alternatives by a wide margin. The trade-offs are time and burden: 30 to 90 days to funding, extensive documentation, and eligibility rules. If your need can wait and your file qualifies, take the SBA loan. The exception is genuinely time-critical opportunities, where the profit lost by waiting three months can exceed the entire cost difference of faster funding. Run that math before defaulting in either direction.
Why would anyone take an MCA if it costs the most?
Two reasons: speed and access. An advance funds in 24 to 48 hours, which matters when equipment fails or a discounted inventory deal expires this week — situations where waiting six weeks costs more than the factor fee. And advances approve on revenue rather than credit, serving healthy businesses that banks decline. The cost premium is real and worth paying only when the return or the urgency exceeds it; a good funder will help you check that, not skip it.
Can I use a business credit card instead of a loan or advance?
For small, recurring spend — supplies, software, fuel — yes, and if you pay the balance in full each month it is the cheapest money on this list. As a capital source it falls short: limits are typically five figures, cash advances on cards carry steep fees, and carried balances compound at high interest. Use a card for float and spend management, and use a purpose-built product when you need a meaningful lump sum.
Can I get a bank loan after using an MCA?
Yes. An advance is generally not reported to consumer credit bureaus, and a cleanly completed advance does not block bank financing. What banks will see is your bank statements — so a history of comfortable repayment helps, while visible cash-flow strain or stacked advances hurts. Many businesses use revenue-based funding in their early years and graduate to bank and SBA money as financials mature. That progression is the system working as intended.