Quarrystone Loans, a small-business funding broker in Sumter, South Carolina, compares six funding types for Sumter County owners: working capital, term loans, lines of credit, inventory financing, equipment financing and merchant cash advances. They differ in how the money comes back and what stands behind it. Lending partners decide every request and set rates and terms.
The six on one grid
| Funding type | What it is | How it is repaid or collected | Usually secured by |
|---|---|---|---|
| Working capital | A short-term sum for operating costs | Set installments across several months | Varies; often a general lien and a personal guarantee |
| Term loan | One payout tied to a specific project | Amortizing installments for a fixed term | Company assets, now and then property |
| Line of credit | A ceiling you borrow under when needed | Interest only on drawn money; repay and reuse | Receivables, a general lien, or no collateral |
| Inventory financing | Funding to buy stock | As the stock sells, or by fixed dates | The inventory itself |
| Equipment financing | A loan, lease or EFA for a machine | Level payments across the machine's useful life | The equipment |
| Merchant cash advance | A funder buys future receipts; not a loan | A holdback on sales or fixed debits | Future receivables; contract terms vary |
Scan each row in full before comparing columns. Two products can look alike in size and still behave very differently when sales slow, because one asks for a fixed installment and the other takes a share of whatever comes in.
Matching the funding's lifespan to the purchase
Pick funding whose lifespan roughly equals the useful life of the purchase. Working capital and most advances are measured in months because the gap they cover closes in months. Term loans and equipment financing run for years because a fit-out or a machine keeps earning for years. Paying for a long-lived asset with short money squeezes cash flow; paying for a short gap with long money means carrying interest after the need has passed.
Secured or unsecured, and what that changes
A secured product names collateral, such as equipment, stock, receivables or property, that the partner can claim if the agreement is broken. Most partners record that claim with a UCC financing statement. Unsecured products skip the specific collateral but usually lean harder on the owner's credit and a personal guarantee, and they tend to cost more. Either way, read the collateral and guarantee clauses in full: a "blanket" lien can cover far more than the item being financed.
Are there really four types of business loans?
Search results often list four types of business loans: term loans, lines of credit, equipment loans and SBA loans. That list leaves out inventory financing and treats merchant cash advances as loans, which they are not. The more useful split is by repayment pattern: fixed installments, a revolving balance, payments tied to an asset, or collections tied to sales.
Uses partners accept, and uses they refuse
- Payroll, rent and supplier bills during a slow-paying stretch
- Inventory purchased before it sells
- Equipment, vehicles for the business and fixtures
- Building out or relocating a store, clinic or shop
- Refinancing more expensive business debt, where the numbers support it
Partners generally will not fund personal expenses, speculation or a business that is losing money with no plan to stop. Paying yourself from borrowed funds is a contract question: read the use-of-proceeds clause or ask the partner before you assume it is allowed.
Where SBA loans fit for South Carolina owners
SBA loans are outside our work: Quarrystone Loans is not an SBA lender and does not arrange them. SBA-backed loans are made by participating lenders under the agency's programs, and the SBA South Carolina district office page is the starting point for finding them. Many owners apply there and through a broker at the same time; that is your choice to make.
Free one-on-one advice on choosing between these options is available through the offices listed in our Sumter County directory, and first-time owners may want the first business loan walk-through before comparing structures.
By Quarrystone Loans · Updated