Rockbank Capital Group, a small-business funding broker in Cookeville, Tennessee, compares six funding structures by repayment pattern, collateral and typical use: working capital, term loans, lines of credit, inventory financing, equipment financing and merchant cash advances, which are not loans. Approval, price and terms are set by the lending partner on each request.
Six structures, one table
| Structure | How it comes back | Usual purpose |
|---|---|---|
| Working capital | Fixed payments over months | Wages, rent and supplier invoices while cash is short |
| Term loan | Amortized installments over years | Build-outs, expansion, refinancing |
| Line of credit | Interest only on what is out; the room comes back | Uneven costs through the year |
| Inventory financing | Payments as stock sells, or on a schedule | Goods for the shelves before they sell |
| Equipment financing | Monthly payments; the item is collateral | Kitchens, chairs, machines, vehicles for trades |
| Merchant cash advance | Remitted through a holdback on receipts; not a loan | Short needs where card sales are steady |
Lending partners set amounts, rates, terms and collateral case by case, so no figure on this site is a quote.
Uses partners accept for a business loan
Almost any genuine business cost: wages, rent, stock, equipment, a fit-out, a vehicle used in the trade, or an older and more expensive balance. What a partner will not accept is personal spending dressed as a business purpose. The narrower and better documented the purpose, the easier the request is to place.
Rockbank does not arrange mortgages on buildings, SBA loans or grants. SBA-backed lending is a separate route; the SBA's Tennessee District Office at sba.gov/district/tennessee is the place to start.
Secured or unsecured, in practice
A secured structure names an asset the partner can claim if payments stop: the equipment, the inventory, sometimes receivables or a blanket lien on business assets filed as a UCC financing statement. Unsecured structures skip the named asset but usually lean harder on credit history, cash flow and a personal guarantee. Read the collateral section of any agreement before the rate section.
The four broad types, and the two extras
Lending guides tend to list four types: term loans, lines of credit, equipment financing and short-term working capital. Inventory financing is a specialized cousin of the credit line, and a merchant cash advance sits outside the loan family entirely because it is a sale of future receivables.
If a single structure does not fit, two can: a term loan for the fit-out and an equipment agreement for the oven, for example. Separate requests are often easier for a partner to judge.
Five steps to a Tennessee business loan request
- Write down the bill and the date it is due.
- Pull the last several months of business bank statements and the most recent tax return.
- Check that the business is in good standing with the Tennessee Secretary of State (sos.tn.gov/businesses).
- Choose the structure from the table above, then ask partners for offers in that structure only.
- Compare offers by total cost and payment calendar, not by the headline number.
No-cost advice before borrowing
Business plans, projections and loan packaging help is available at no cost from advising organizations in the region. They are listed with their verified web addresses in the Upper Cumberland help directory.
By Rockbank Capital Group ยท Updated