Frostspring Business Loans, a small-business funding broker in Dothan, Alabama, lines up six structures on this page and sorts them by how money goes back: working capital, term loans, lines of credit, inventory financing, equipment financing and merchant cash advances. For each it notes typical uses and what partners check. Partners alone approve requests and set rates and terms.
Six Structures, Four Questions Each
| Structure | Money goes back via | Usually suits | What partners tend to look at |
|---|---|---|---|
| Working capital | Equal installments over a matter of months | Wages and bills due before customers pay | Bank deposits and how regular they are |
| Term loan | Fixed installments over a longer schedule | One defined project: a build-out, a buyout, a second site | Cash flow, time operating, sometimes a plan |
| Line of credit | Payments on what is drawn; repaid room can be reused | Costs that recur unevenly | Deposits, credit history, existing debts |
| Inventory financing | Installments, often tied to the stock it bought | Shelves that must be filled before sales | Sell-through, supplier terms, the stock as collateral |
| Equipment financing | Installments or lease payments | A machine, vehicle or fixture with a useful life | The equipment quote and its resale value |
| Merchant cash advance | Not a loan: a share of future receipts is collected | A brief need backed by steady card takings | Card or bank receipts over recent months |
Every cell describes how these structures commonly work. The actual schedule, price and collateral come from the partner's agreement, never from this page.
Four Types, or Six?
A common question is which four business loan types the lists keep naming. Lists vary, but most name term loans, lines of credit, equipment financing and some form of short-term working capital. Inventory financing is usually a variation on those, and a merchant cash advance sits outside the list entirely because it is a purchase of receivables, not a loan.
Payback Period Versus Purchase Lifespan
Let the repayment period follow the working life of the purchase. Payroll for a slow month should be repaid in months, not stretched over years; a dental chair that works for a decade can carry a longer schedule. When the two are mismatched, owners end up paying for something long after it has stopped earning.
Secured Versus Unsecured
Secured funding names collateral: the equipment, the inventory, or a general lien on business assets. Unsecured funding names none, though partners often still ask for a personal guarantee. Neither is automatically cheaper; read what each agreement lets the partner take if payments stop.
Where the SBA Fits
Alabama owners search often for SBA loans. Frostspring is not an SBA lender, and nothing on this site is an SBA program. Some lending partners may offer loans backed by the SBA; if that route suits you, ask the partner directly how its process works.
For outside help with a plan or a loan application, see free small business help around Dothan, AL. If a partner asks for a plan, the post on business plans for a loan covers what to put in one page.
Uses a Business Loan Can Cover
Almost anything the business genuinely needs: staff, stock, equipment, a lease build-out, a tax bill, a buyout of a partner. What partners care about is whether the use and the repayment source line up. A loan to cover a loss that repeats every month rarely fits any of the six.
By Frostspring Business Loans · Updated
